After a decade of fast growth and rising incomes,
Brazil has hit a rough patch that is testing its government’s ability to manage
the economy and satisfy the growing aspirations of its people. President Dilma
Rousseff, who faces elections next year, needs to push through policy reforms
and public investment projects to revive growth and bring inflation under
control.
Last year, Brazil’s economy grew only 0.9 percent because private investment
slowed down. Analysts expect the growth rate to recover to 2.5 percent this
year, but that is still far slower than the 7.5 percent the country achieved in
2010.
In June, tens of thousands of people joined street
protests that were prompted by an increase in public-transit fares but quickly
became a way for Brazilians to air broader grievances about the rising cost of living, weak infrastructure,
political corruption and government spending on big sporting events like the
2014 World Cup. In response to the protests, Ms. Rousseff said she would push
for political reforms and investments in infrastructure, but her government has
not yet delivered on those promises.
Brazil has made impressive gains under Ms. Rousseff
and her predecessor, Luiz Inácio Lula da Silva. Programs like Bolsa Familia,
which provides cash to families if they immunize their children and send them
to school, have bolstered incomes of the poor and improved their health. About
8 percent of Brazilians lived on less than $2 a day last year, down from 20 percent 10 years earlier. Infant
mortality has fallen by nearly 50 percent.
But while the incomes of the country’s poorest
citizens have grown faster than those of its richest in recent years, income
inequality remains high. And inflation, which erodes rising incomes, is taking
a big toll on the poorest Brazilians. The country’s inflation rate was 6.09
percent in August, according to the central bank, which has raised interest
rates several times this year.
People living in cities like São Paulo pay more for
food, housing and other basic goods than people in other comparable countries.
A big reason for the high prices is that the government has not built enough
roads, railways, ports and other infrastructure to keep up with the economy’s
growth. Brazil also imposes high import duties and taxes that inflate the price
of many goods and services.
The country also needs to reform its education system,
which does a poor job preparing young people for skilled jobs in the
manufacturing and the service sector. In an international test of the reading,
math and science skills of 15-year-olds, Brazilian students scored lower than their counterparts in other Latin
American countries like Uruguay, Mexico and Colombia.
Brazil has such chronic shortages of skilled
professionals that the government is planning to import doctors from other countries. That might be a
fine temporary solution, but the government needs to build more universities
and improve teaching in primary and secondary schools to make sure more
students can pursue higher education.
The nation has seen social advancements in a short
time, and now its citizens expect more from their leaders.
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