ECONOMY-BRAZIL: Going Up in the World

  • by Mario Osava (rio de janeiro)
  • Inter Press Service

Spain's El País newspaper and Le Monde in France both chose President Luiz Inácio Lula da Silva as 'personality of the year.'

And Rio de Janeiro has been selected to organise the 2016 Olympic Games, two years after the country is to host the football World Cup.

The discovery of vast oil deposits deep under the Atlantic ocean in Brazilian waters seems to confirm a brilliant future for this South American country of 192 million people.

Lula's phenomenal popularity rating of 80 percent underlines the population's enthusiasm and confidence in a government that has reaped the fruits of its own labours and those it inherited from others.

Accusations of a 'personality cult' have arisen in the wake of the film 'Lula, Son of Brazil', directed by Fabio Barreto, which portrays the president's life, especially his childhood. Special screenings have already taken place in Brasilia and other cities, but its commercial release is due Friday, the first day of 2010.

Lula owes much of his popularity to social programmes like Bolsa Familia (Family Grant), which provides a small monthly payment to 11 million poor families and was a decisive factor in Brazil's economic growth and the creation of 7.7 million jobs between 2003 and 2008, Lula's first six years in office.

The global financial crisis had a heavy impact on some sectors during the last quarter of 2008. In December last year alone, Brazil lost nearly 655,000 formal sector jobs, according to the Labour Ministry.

Recession, formally defined as a decline in GDP for at least two consecutive quarters, lasted just the two-quarter period in Brazil. But recovery has been slow, and as 2009 comes to a close, the economy is stagnant.

However, close to one million new jobs were created in the formal sector this year, most of them in areas related to the domestic market, like construction and retailing, which more than make up for the sharp fall in exports.

The least optimistic forecasts for 2010 indicate GDP growth of at least five percent. Brazil has entered a long cycle of expansion, according to economic experts, and foreign investors are pouring money into the country through every possible channel.

The rate of investment slackened shortly after the government slapped a two percent tax on the entry of foreign capital in October, a measure designed to curb the over-valuation of the local currency against the dollar and to prevent speculative bubbles, especially on the stock exchange.

As one of the first large countries to come out the other side of the crisis, Brazil's standing as one of the foremost emerging nations has been consolidated on the international scene, enhancing its power and influence on virtually all aspects of the global agenda, from the economy to security and the issue of climate change.

Brazil's prestige was already in the ascendant because of its democratic and economic stability, intense diplomatic action by Lula and his foreign ministry, and the country's importance in areas like food production and environmental conservation.

Making a rapid exit from the financial crisis, although not with a growth rate anything like China's or India's, has narrowed the economic gap with the rich countries. Lula and The Economist have both said Brazil may become the world's fifth largest economy in 2014, overtaking the U.K. and France.

However, Brazil's international prominence is not only due to its economy, but to the variety of ways in which the country has made its mark.

One example was the speech Lula gave in Copenhagen Dec. 18, condemning the lack of an effective agreement to mitigate global warming and offering a contribution to the climate fund that was originally intended to be financed by donations from industrialised countries exclusively.

Brazil is destined to lead the transition from the oil era to a 'biomass-based civilisation,' according to Ignacy Sachs, an 'ecosocioeconomist' and the head of the Research Centre on Contemporary Brazil at L'Ecole del Hautes Études en Sciences Sociales (School of Advanced Social Science Studies) in Paris.

Brazil is also a melting-pot, with close historical ties to Africa, Europe and the rest of Latin America, and large immigration currents from the Arab and Asian worlds. Its widespread international relations are multidimensional and include ethnic, cultural, environmental and trade links.

The country's influence extends to innovative fields such as social technology, which aims at finding collective and participative solutions to the age-old problems of poverty and inequality. Another area of leadership is the wide-ranging knowledge about tropical agriculture it has developed over the past few decades.

Brazil's economic growth rate is far behind China's, but it has the distinction of being directed toward cooperation, rather than the intensive exploitation of natural resources in foreign lands, which was typical of colonialism.

© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service