This article, by Thomas J. Trebat, first appeared in the Journal of International Affairs, Vol. 66, No. 2 in the Spring of 2013.


This article examines whether increasing global confidence in Brazil is well founded and, if so, what the implications might be for the global community. Landmark political, economic, and social achievements in contemporary Brazil are reviewed as well as the obstacles to raise human welfare to developed country standards within the next decade. The paper concludes that Brazil's growing influence in the global community is based on sound empirical evidence, a diverse economy, and an emerging society; it is not the result of passing good fortune. At the same time, the crushing legacy of past problems in areas that are vital to human welfare, including the education system and deficiencies in innovation and technological advance, continues to weigh heavily. Depending on how well its leader ship deals with the legacy of the past, Brazil could become a more important actor in the international community over the next ten years. Brazil's rising use of "soft power" will contribute to addressing global issues such as clean forms of energy, sustainability, food security, and social inclusion. Even for this possibility alone, Brazil merits much closer attention from a global community not yet fully aware of Brazil's transformation.

Reductions in poverty and a movement toward greater income equality are the most exciting and important developments in Latin America today.[1]This process, which is gradual and subject to reversal, can eventually transform Latin American society and the region's role in global affairs. In many respects, Brazil has been emblematic of the emergence of a new, more inclusive, and more socially mobile Latin America, winning praise for the strength of its vibrant democracy, the consistency of its economic management, and the effectiveness of its social policies.[2]Brazil's vision of itself as the dominant country in Latin America, a leader of the global South, and an important partner for the United States—and the West in general—now seems more within its grasp than at any other moment in its history.

Brazil's peaceful rise might evoke criticism from skeptics who would attributeit to a short-term rise in commodity prices caused by demand from China. How can it be, critics might well ask, that a country so dependent on natural resource wealth like Brazil, and so beset by problems of inequality, infrastructure, and education is experiencing anything other than a blip in the age-old Brazilian pattern of boom and bust? In order to understand where Brazil is today and where it is headed, one first needs to construct a framework based upon the fundamental changes in the economy, society, and politics that have occurred over the last three decades. This essay is an attempt to do so and to draw upon the implications for a global community likely to be puzzled by what to make of this new Brazil.

Economic Transformation

While the economy of Brazil has lagged behind China in terms of economic growth in the last thirty years, Brazil started from a higher base of development than China and has developed an impressive economy (seventh largest in the world) and a much more diverse economic structure than it once had. The most noteworthy structural development is the growth of a competitive agribusiness sector. Spurred by advances in agricultural research, especially soybean production in semi-arid areas, Brazil's center-west region, sparsely inhabited thirty-five years ago, is today the engine room of a global powerhouse in agricultural exports.[3]

The emergence of agriculture complements a more established industrial sector that has become much less protected over the last several decades, more receptive to foreign investment and technology, and more sophisticated technologically.[4]While difficult to quantify, entrepreneurial resources appear to abound in Brazil to a greater extent than in other Latin American economies. These resources seem to have found plenty of outlets in the last thirty years.

Demographic changes help to explain why Brazil seems so different than four decades earlier. The population has more than doubled from 95 million in 1970 to nearly 200 million today.[5]It is also an older society, as population growth has slowed, and fertility rates have plunged.[6]Today, Brazil is in a demographic sweet spot with more young workers entering the workforce than older workers retiring from it, thereby freeing more family and government resources to spend on the education and wellbeing of smaller cohorts of children and youth.

Brazil is now an overwhelmingly urban society; more than 85 percent of its people reside in cities spread throughout the country with particularly rapid urban growth in the heart of the agricultural regions in the south and center-west.[7]This growth in once largely rural areas is beginning to diminish the traditional con centration of population and wealth in the urban corridor of Sao Paulo and Rio de Janeiro, while providing better jobs and social services and enhanced social mobility for the rural poor.

As much as the structure of the Brazilian economy has changed in the last three decades, the most important changes have arguably occurred in economic policy, where advances have recast the institutional underpinnings of the economy. Throughout the 1970s and 1980s, Brazil struggled fiscally in a losing battle to reconcile poor economic growth, balance of payments and external debt constraints, and an unmet social agenda. High rates of inflation and repeated currency debasements appeared as outward signs of the inherent conflicts in policy.[8]Yet the grave difficulties of the 1980s gave way not to despair, but to an era of innovations in economic management in the 1990s that have transformed the Brazilian economy in the last twenty years.

After reforms to open Brazil to freer trade and to reduce external debt in the early 1990s, the truly revolutionary economic reforms came with the launching of the Real Plan in 1994. The brainchild of a cadre of brilliant economists working under the general direction of Fernando Henrique Cardoso, the Plan ended the inflationary era for Brazil and stabilized its currency.[9]With the benefit of hindsight, the true importance of the Real Plan may have been to embolden policymakers to set the stage in the latter half of the 1990s and early 2000s for a series of reforms that went well beyond the original anti-inflation objective that has set the foundation of the modern Brazilian economy.

The mere listing of these policy innovations hints at the breathtaking pace of change in Brazil in the late 1990s and 2000s. Federal, state, and local government finances were reorganized legally and modernized in practice through such measures as the consolidation of public debt procedures and the Law of Fiscal Responsibility. The banking sector, undermined by years of mismanagement and the distortions created by high rates of inflation, was rescued, recapitalized, and more properly regulated through programs such as Program of Incentives for the Restructuring and Strengthening of the National Financial System (PROER).[10]Huge and inefficient government firms in steel, energy, and telecommunications were privatized, and entirely new regulatory bodies were created in each of these sectors to safeguard the public interest in their operations. Toward the end of the 1990s, the Central Bank's mandate was reformed in order to focus the Bank on inflation, implicitly stripping away a responsibility for economic development as such. At about this time, the newly-stabilized Brazilian currency was floated in international markets. Simultaneously, other structural reforms affected the social security provision, the primary education system, social assistance programs, and agrarian reform.

What is even more remarkable is that virtually the entire set of innovations of the Cardoso era survived intact after voters handed power to the leftist government of Luiz Inacio Lula da Silva in 2002. Perhaps reluctantly at first, Lula came to see that the overall set of economic policies put in place by his more elitist predecessor were popular with broad sectors of the population and, not insignificantly, supported strongly by the entrepreneurial class and foreign investors who showered Brazil with capital throughout the 2000s. When global economic conditions improved for Brazil in the 2000s, it was Lula, not Cardoso, who was in a position to garner the political credit. As government resources also increased, Lula was able to expand government expenditures in social programs and extend his hold on power for two terms in office.

In recent decades, Brazil has managed to remove some of its binding constraints on economic growth—the heavy legacy of inflation, the large level of public sector debt, a weak banking sector, and the perennial lack of foreign exchange. In doing so, Brazil placed itself in a position to benefit from the boom in China and the so-called new economic geography set in during the 2000s, which greatly benefited commodity producers and emerging market economies with sound fiscal and monetary positions.[11]

Brazil's strong economic performance in most of the post-2002 period is well known. The surge in exports and the large trade surpluses in the 2000s; the flood tide of foreign direct investment; the increase in reserves which are now in excess of $370 billion; the strong increases in domestic bank credit; record low rates of unemployment across the nation; Brazil's ability to weather the post-2008 global downturn relatively unscathed—all of these favorable outcomes were in some way attributable to policy decisions that were made over the prior two decades.[12]

Brazil has also accomplished a change in mindset in economic terms. Three decades ago underdevelopment, dependency, poverty, and inequality were the dominant themes in Brazil. The new themes revolve around globalization, especially in education and innovation, where the country's gaps with respect to the rest of the world seem to be largest. On paper, achieving developed-country status for Brazil in terms of per capita income now seems within the nation's grasp by the mid-2020s, assuming average annual GDP growth rates of 4 to 5 percent compared to about 3.6 percent over the last decade.[13]This would imply an annual per capita income of approximately $23,000 by 2025 (similar to the per capita income of Portugal in 2012), compared to $12,500 in 2012.

In retrospect, just how much has the Brazilian economy advanced in global competitive terms? What obstacles still stand in the way? The global competitive rankings of the World Economic Forum (WEF) provide a starting point.[14]The WEF economists in 2012 ranked a total of 144 national economies, assigning an overall score and sub-scores in each of twelve development indicators in order to shed light on particular strengths and weaknesses that contribute to the overall competitiveness score.[15]Brazil's overall placement in the 2012 rankings is not impressive at first glance. Brazil is ranked 48th out of 144 in overall competitiveness, yet encouraging trends can be discerned upon closer inspection. Brazil's relative position has improved rapidly in these global rankings—up ten places in three years—and it is closing the gap with the most competitive Latin American economies including Chile (ranked 33rd) and staying ahead of other strong Latin American performers, including Mexico (53rd) and Peru (61st).[16]The gap in competitiveness with less successful Latin American economies is widening. For example, Brazil's competitive edge over neighboring Argentina, ranked 94th, is large and increasing. 

While Brazil's competitiveness measured on a global scale is improving, it falls well short of the leading economies due to performance in the basic requirements for economic growth: trust in government institutions, quality of economic infrastructure, access to finance, and the quality of health and primary education—a particularly glaring weakness.

The comparative assessment with China (ranked 29th in the 2012 survey) is illustrative both of how far Brazil has come and the significant binding constraints in such areas critical to economic growth such as education and innovation. The news is not entirely discouraging. In some respects, the comparisons between Brazil and China in terms of innovation are encouraging. On a relative scale, Brazilian companies invest almost as much in research and development as their Chinese counterparts and have a comparable ability to absorb and adapt new technology. Brazil's research institutes are considered to be roughly on par with those of China, as are the links between its universities and the business community.[17]

In regards to other facets of innovation, Brazil's comparison with China is disconcerting.[18]Innovation is spurred by companies producing efficiently in competitive product markets, and Brazil's sub-score on this indicator, an abysmally low 132, indicates an unhealthy degree of market concentration in many products. The overall quality of Brazil's primary education system—ranked alarmingly low at 127th in a 2010 report—is far poorer than China's rank of 35th and that of most other economies in the world.[19]Finally, Brazil is seriously underperforming with respect to China in terms of the overall quality of its scientific research as well as the quantity of scientists and engineers being trained in domestic universities. This finding is supported by labor market studies in Brazil. A recent survey puts the gap in trained engineering graduates in Brazil at approximately 150,000, demonstrating that fewer than two percent of university graduates pursue studies that are linked to engineering or other applied sciences.[20]

In sum, the binding constraints on economic growth in earlier eras, particularly inflation, have been eradicated. Yet there are new constraints, which are now more apparent. Chief among them is education. Success on the educational front could well be the determinant of whether or not Brazil will continue on the path to developed country status.

Social Transformations

The birth of modern Brazilian democracy in the late 1980s ushered in an concern for the unmet social debt accumulated over many decades.[21]The Brazilian Constitution of 1988 enshrined universal policies in education, health, and security and paved the way for several sector-specific initiatives, including agrarian reform, to address problems of poverty and inequality. Almost a decade passed before political conditions, a stronger economy, and an increase in government resources came together to permit significant progress in Brazil's social agenda. Despite the delayed start and the additional complications caused by large regional differences in standards of living, it is clear that Brazil has accomplished important advances in the last twenty-five years.

While poverty and inequality are multidimensional (the poor in any country are poor in multiple deprivations in addition to low levels of measured income) improvement in social conditions in Brazil can be approximated through the data on income distribution and the number of poor citizens. With a per capita income of $12,600 in 2011, Brazil is a middle-class country in global comparative as most countries have per capita incomes that are lower.[22]Yet, for a middle-class country, Brazil historically has had large numbers of its citizens trapped in poverty and a woeful record with respect to inequality.

These trends have begun to change dramatically. Income and inequality began to show dramatic improvements in Brazil beginning in the 1990s—in line with trends in other Latin American countries—with the positive trends accelerating even more in the 2000s.[23]The number of Brazilians whose incomes place the or below the poverty line was 92 million in 1993; the comparable figure for 2011 was 64 million, or slightly more than 25 percent of the population.[24]The category of the extremely poor (per capita incomes of less than $2.50 per day) also declined and now includes approximately 28 million Brazilians, with a high concentration in the impoverished northeast.[25]

Brazil has also experienced a continuous decline in the Gini coefficient of inequality from the abysmal level of 0.59 in 2001 to 0.53 in 2011—one of the fastest declines in the world (see Chart 1). Brazil is no longer the inequality leader in Latin America; that dubious distinction now falls to Colombia (0.56) with Brazilian inequality levels closer to that of Chile (0.49). However, much more progress is still needed to approach the Organisation of Economic Co-operation and Development (OECD)average of 0.31, but important progress is being made. 

Improvements in inequality occur if the incomes of the poorest deciles of the income distribution are rising faster than those of the wealthiest deciles which is exactly what has been happening in Brazil. From 2001 to 2009, the income of the poorest 10 percent of the income distribution rose by almost 70 percent, while the increase for the wealthiest 10 percentwas a more modest increase of 13 percent (see Chart 2). On an annualized basis, the income of the poor have risen close to 10 percent per year, a rate comparable to annual economic growth in China over the same period.[26]

The incomes of the poorest 20 percent of Brazilian citizens are growing approximately 7 percent annually, while those of the wealthiest 20 percent are growing less than 2 percent.[27]This is in contract to China and Russia where income inequality is increasing. As traditionally excluded groups are clustered in the lowest deciles of the income distribution, it is not surprising that they have benefited most from the recent pattern of economic growth in Brazil. A more disaggregated look at the Brazilian income inequality data in Chart 2 most likely reveals that those benefiting from Brazil's recent prosperity are socially excluded groups (the poorest of the poor) including: Afro-Brazilians, favela residents, residents of the northeast, rural workers, and those with fewer years of education.[28]

In other words, Brazil has managed to balance economic growth to reduce inequality, allowing millions to escape poverty.[29]What is behind these data driven results? Roughly 40 percent of the increase in the incomes of the poor can be attributed to various government income support programs. The icon Bolsa Familia program—a conditional cash transfer (CCT) that now reaches million Brazilian families—is a prime example. Other social programs, such as expanded social security program, and steady increases in the federally determined minimum wage have also positively affected the incomes of the poor.

Yet Brazil's well-known government programs only account for a part of observed improvements in equality. Approximately 40 percent of the improvement derive from factors such as the strong economic recovery post-2002 that created jobs, pushed up wages, and increased the return to education.[30]As the quality of the Brazilian labor force measured in years of schooling has improved, it created a comparative scarcity of bottom-rung workers, such as maids willing to work for the lowest wages for example. The average years of schooling of employed Brazilians has increased from less than seven in the 2000s, to nine.[31]Meanwhile, the number of employed Brazilians who have completed the equivalent of high school is rising steadily, as is the number of those who have completed at least some college.

The conclusion is inescapable: the new Brazil is much more of a middle class society today than three decades ago. More than 55 percent of the population, approximately 105 million people, is neither rich nor poor in the Brazilian context, and this group of consumers accounts for about 47 percent of the purchasing power in Brazilian society, not to mention their voting power.[32]The rise of this middle class has injected Brazilian society with a new sense of optimism. For example, the most recent Gallup Index of Hope and Happiness showed that Brazilians were the third most hopeful people in terms of their future economic prosperity in a survey of more than sixty national groups. Brazilians are now, and have been for some time, much more hopeful than counterpart BRIC countries and the United States.[33]

Political Transformations

It is tempting to think of Brazil as a consolidated democracy, yet thirty-years ago, an entrenched military dictatorship ruled a highly centralized country with an iron fist. The modern Brazilian democracy traces its origins to a so-called Brazil Spring in 1985, when a rising clamor from civil society brought a to twenty-two years of brutal military rule and economic mismanagement. The generation of political leaders who helped to unite Brazilian society around democratic values and a democratic society acted quickly to meet social demands a prevent a return to the abuses of the military regime. The Brazilian constitution of 1988 enshrined individual rights and freedoms, established a framework for regular grievances, determined a separation of powers at the federal level, and made provisions for universal social policies in education, health, and social security.[34]

While the early democratic era was beset by failed presidencies and economic turmoil, in the last twenty years slow progress has been made in delivering on the lofty promises of the constitution.[35]

Brazilian democracy continues to evolve as it deals with the demands of a society. A powerful federal executive office in Brasilia is still the focus of power and decision making, but it is held in check by the significant constitutional powers granted to state and local governments, the constant and complicated process of negotiating legislation through a large and fractious congress with twenty-eight political parties, and by the actions of an increasingly active and efficient judicial branch of government.

A clear example of the functioning of democratic institutions occurred in 2012, as the Supreme Court presided over the mensalao ("big monthly payoff") trials. This scandal, which dates to Lula's first term in office in 2005, ensnared some forty people associated with the Lula government, including key members of Lula's innermost circle of advisors. All were accused of involvement in a scheme to divert public funds in order to purchase the votes of members of congress. Ultimately, convictions for corruption were handed down against most of the accused,

including almost all of the key advisors. This decision was reached by a Supreme Court composed mostly of justices who had been appointed by Lula himself. The mensalao convictions and the lengthy jail sentences handed down to the guilty parties came as a great shock to a Brazilian public accustomed to the impunity of its public officials. Prepared by experience for the exoneration of the accused, the Brazilian public is still coming to grips with the exercise of judicial power, as well as the integrity of the government's investigation of some of the most powerful figures in Brazilian politics.

In conjunction with these democratic advances, an argument can also be made that a new civil society is emerging and changing the face of politics, as evidenced by recent selections of leadership. President Fernando Flenrique Cardoso was a highly successful president during his two terms in office, yet he was clearly seen in Brazil as a member of the elite, and, ultimately, his center-right coalition was turned aside in favor of Lula, a poorly educated union leader and former firebrand, whose roots were in the impoverished northeast.

At the same time, Lula himself and the Workers Party were clearly constrained by the electorate to pursue social policy in a very moderate way—certainly different from the policies of a nationalist, authoritarian left forged by Hugo Chavez in Venezuela and other leaders in Latin America. Lula's two terms in office were generally perceived as strong endorsements of the social democratic values of the Brazilian electorate with a respect for the rule of law, the institutions of government, and for a market-oriented economy in which a strong role exists for the state to rebalance the social outcomes of the market through transfers such as the iconic Bolsa Familia program and labor laws that mandate a large variety of social benefits.

In his recent book, Cardoso speaks of the social democratic culture that is emerging in this new Brazil.[36]According to Cardoso, in this Brazilian worldview, private property exists, but strong pressures arise out of society to correct social inequalities. Cardoso goes on to argue that while inequality and prejudice persist, diversity and tolerance are also embraced, as befits a nation as racially and ethnically mixed as Brazil. Rigid class structures are a relic of the past and social mobility is assumed, as evidenced by the rising numbers and clout of the middle classes.

This social democratic culture will mold an emerging generation of leaders. This new generation, which did not directly experience the repression of the military era, will replace an older generation who rose to prominence in the struggle against the military. The new and younger governors, Aécio Neves of Minas Gérais, Eduardo Campos of Pernambuco, and Mayor Eduardo Paes of Rio de Janeiro, along with others, have capitalized on policies pitched to the rising middle sectors. These politicians have shown skill at navigating the tricky politics of income distribution in the context of a market-oriented economy. They will be among those who will forge foreign policy and a new global footprint for Brazil in the decades to come.

Brazil and the World

The watchword of Brazil's new global footprint will be soft power, achieved by the country's economic size, social achievements, and newfound confidence. The foreign policy priority to advance economic development will still exist, but the traction gained already against entrenched poverty and inequality will shift the emphasis toward a focus on new binding constraints: the educational system and to an equally important extent the poor state of the nation's principle infrastructure, including roads, ports, and energy systems.

The key priority for an older generation of policymakers, in the decades prior to the Cardoso-Lula-Dilma era, was to create space for national industry through an economic development model based on import substitution. This policy of import substitution based on protection of domestic industry was accompanied by a persistent demand that Brazil be taken seriously in the global community, a national aspiration encapsulated by the campaign to win a permanent seat on an expanded UN Security Council. In contrast, new generations in Brazil will be more concerned with spurring innovation, technological change, and education through the use of global best practices. Consumers in Brazil—newly empowered and increasingly aware of their rights—will be demanding higher quality products and services than those produced domestically by long protected producers.

In terms of key global themes, Brazil's international agenda will involve a greater sensitivity to the issues of the environment, the preservation of natural resources, and food production, as befits the steward of the Amazon Basin and a nation with such abundant reserves of water and other agricultural resources.[37]Hosting the 2012 Rio+20 UN Conference on Sustainable Development, Brazil presented itself as one of the leading global facilitators of a new consensus on climate change through reduction in carbon emissions (even though the conference produced little in terms of concrete global plans of action). Brazil's own credibility on climate issues has been enhanced by its success in reducing deforestation in the Amazon region, which has been the result of legal reform to punish perpetrators and improved technology to detect fires.

Brazil has a clear role to play in food security due to its water and natural resources. Brazil holds about 18 percent of the world's supply of fresh water.[38]By 2020, it is expected to provide 10 percent of the world's food exports, including 43 percent of all soybeans in world trade.[39]New agricultural technologies and a more intensive use of existing land will allow for substantial increases in agricultural production, even while 60 percent of Brazil's land mass remains forested.

Energy is another major theme that will engage Brazil with the world in the decades ahead. Its reliance on hydropower, biofuels, and renewables in general to fuel the economy's growth are well known and lend credibility to the nation on green economy issues and low-carbon growth patterns A major unknown in the energy picture is the extent and practical importance of the hydrocarbon reserves found in deep waters off the coast. If the technology is available, and government policies well crafted, Brazil could also emerge over the next ten to fifteen years as a major exporter of fossil fuel to a world still dependent on such resources which could reposition Brazil geostrategically.

Apart from these global themes, Brazil will continue to seek new institutional mechanisms to extend its global influence. Brazil already has one of the most extensive diplomatic networks in Africa with nearly forty embassies in African capitals. Brazil will become more intertwined with the African continent and will play an important role in development assistance, agriculture, and food security. For Brazil, African nations are an increasingly important outlet for exports, including construction and mining services, as well as allies in the UN and other international forays on themes of common interest. 

A newly prosperous Brazil can greatly contribute to the leadership of the global south, a role that Brazil is carefully cultivating. While much of the institutional interaction with the other BRIC nations (Russia, India, and China) is not much more than a photo opportunity for Brazil's leaders, Brazil and China are the two members of this group with broader ambitions to expand trade with, and to offer leadership to, the south. The India-Brazil-South Africa initiative (IBSA) has contributed little in terms of incremental trade and investment, but it points to future directions in foreign policy and trade for Brazil. Relations with China, its largest trading partner, will grow to be an ever-larger priority for Brazil. Given the intensity of the commodity trade and the growth of Brazilian businesses in China, Sao Paulo and Shanghai are connected through a web of commercial and financial relationships, which are likely to intensify.

Brazil's overall relationship with the West—the United States, Japan, and Europe—will also continue to evolve as Brazil's confidence and resources increase in the next decade.[40]The relationship with the United States and the West has not always been a smooth one. Brazil clashed multiple times with the United States over trade policy. Brazil has always sought friendly relations with the West, but it has also been willing to take individual initiative rather than line up behind the United States and its main allies, most recently in the case of Iran's uranium enrichment program. Yet, one can also see Brazil's future relationship with the United States and the rest of the West improving as common interests in trade and the environment, cultural similarities, and core democratic values play a role in encouraging convergence, while long-standing divergences, such as over Cuba, fade into the past.

Finally, the new Brazil will also seek to redefine relations with its regional neighbors to reflect new realities and differential patterns of political and economic growth which are simultaneously taking place in Latin America. Brazil, along with Mexico, will inevitably remain the predominant Latin American power, yet it will exercise this power with great caution and without hegemonic impulses. For all its size and influence, Brazil is not a natural leader of Latin America, not even of its own Southern Common Market (MERCOSUR) network of trading partners. Its use of the Portuguese language alone sets it apart more than is often realized. Its different culture, including important African and other non-Iberian heritages, also creates important differences with the Spanish-speaking nations of Latin America.

Of Brazil's relationships in Latin America, Argentina is certainly one of the most important given the combination of its size, geographical proximity, and historical tensions between the two nations. For now though, Brazil and Argentina seem to be on very different economic and political trajectories, which inhibits trade and cooperation in other arenas and is very damaging to the global influence of each. With respect to more distant Latin American neighbors, Brazil will have much more to gain from closer ties with the faster growing and more globalized Latin American countries—those who seem most similar to Brazil politically and economically. The list would certainly include Mexico, Chile, Colombia, and Peru, each of which seems to be achieving a balance between a strong state and an entrepreneurial sector, an emerging civil society, and an engagement with the rest of the world.

Conclusion

By virtue of its sheer size and the leadership role to which it has long aspired, Brazil presents intriguing opportunities for greater interaction with the global community in trade, environment, and in a variety of other areas. The potential for collaboration creates a need for an increased understanding of Brazil, in turn, requires an appreciation of just how much and how recently Brazil has transformed itself into a democratic nation, an economic force to be reckoned with, and a more equal society. The cumulative impact of these changes within a single generation is huge. The Brazilians themselves are learning how to think about the society they want and their role in the world. In this new, more prosperous Brazil, it is possible to envision a future much different from the past. Developed country status in the next ten to fifteen years is a possibility, and a more inclusive society is within grasp. And yet there are enough reminders in Brazil today of the painful historical legacy of poverty, inefficiency, and low levels of education to think that other, less optimistic outcomes are also possible such as stagnating levels of income and inequality, a turn toward economic populism, and a retreat from global engagement in trade. For now, the people are hopeful, their political leadership enlightened, the priority for improved education broadly shared. For now, maybe that is enough. 


[1]Luis F. Lopez-Calva and Nora Lustig, Declining Inequality in Latin America: A Decade ofProgress?(Washington, DC: Brookings Institution, 2010).

[2]Larry Rohter, Brazil on the Rise: The Story of a Country Transformed(New York: Palgrave-MacMillan, 2010); Albert Fishlow, Starting Over: Brazil Since 1985(Washington, DC: Brookings Institution, 2011);

Fernando Henrique Cardoso, Accidental President of Brazil: A Memoir(New York: Public Affairs, 2006).

[3]For background on Brazil's emergence in agriculture, see Geraldo Barros, "Brazil as an A and Agroenergy Superpower", Brazil as an Economic Superpower?: Understanding Brazil's Chang the Global Economy, ed. Lael Brainard and Martinez-Diaz (Washington, DC: Brookings Ins 2009), 81-102.

[4]Edmund Amman, "Technology, Public Policy, and the Emergence of Brazilian Multinationals," in Brazil as an Economic Superpower?: Understanding Brazil's Changing Role in the Global Economy, ed. Lael Brainard and Martinez-Diaz (2009), 187-220.

[5]CIA World Fact Book on Brazil, https://www.cia.gov/library/publications/the-world-factbook/geos/br.html.

[6]M. Gragnolati et al., "Growing Older in an Old Brazil: Implications of Population Aging on Growth, Poverty, Public Finance, and Service Delivery" (World Bank, Washington, DC: 2011).

[7]For source on population data, see CIA World Fact Book, https://www.cia.gov/library/publications/the-world-factbook/fields/2212.html.

[8]Miriam Leitâo, saga brasileira - a longa luta de um povo por sua moeda (Rio de Janeiro and Sâo Paulo: Editora Record, 2011).

[9]Werner Baer, Tire Brazilian Economy: Growth and Development, Sixth Edition (Boulder: Lynne Rienner Publishers, 2008); Cardoso (2006).

[10]Ο Programa de Estimulo à Reestruturaçâo e ao Fortalecimento do Sistema Financeiro Nacional. This program, in effect from 1995 to about 2000, injected substantial public resources into banks whose problems had been masked by high rates of inflation.

[11]Alejandro Izquierdo and Ernesto Talvi, One Region, Two Speeds? Challenges of the New Global Economic Order for Latin America (Inter-American Development Bank, Washington, DC: 2011).

[12]For data on reserves, see Banco Central Do Brasil, "Economic Indicators," http://www.bcb.gov.br/?indicators, (accessed on 4 March 2013).

[13]For data on the average GDP growth rate in the last decade, see Banco Central Do Brasil, "Economic Indicators," http://www.bcb.gov.br/?indicators, (accessed on 4 March 2013).

[14]Klaus Shwab ed., The Global Competitiveness Report 2010-2011 (World Economic Forum, Geneva: 2010).

[15]Oliver Cann, "Persisting Divides in Global Competitiveness as Switzerland, Singapore and Finland Top Competitiveness Rankings in 2012," World Economic Forum, http://www.weforum.org/news/per sisting-divides-global-competitiveness-switzerland-singapore-and-finland-top-competitiveness.

[16]Shwab (2010); Klaus Shwab ed., The Global Competitiveness Report 2012-2013 (World Economic

Forum, 2012).

[17]Shwab (2010).

[18]Ibid.

[19]Ibid., 108 and 129; other educational data sets, such as the PISA exams administered by the Organisation for Economic Co-operation and Development, also suggest serious learning deficiencies among Brazilian students compared to their global peers.

[20]Censo do Ensino Superior, Ministerio de Educaçâo, as reported in Ο Globo, 22 October 2012.

[21]Albert Fishlow, Starting Over: Brazil Since 1985 (Washington, DC: Brookings Institution, 2011).

[22]The World Bank, "GDP per capita (current US$) 2011," http://data.worldbank.org/indicator/ NY.GDP.PCAP.CD (accessed 26 January 2013).

[23]Felipe Lopez-Calva and Nora Lustig, Declining Inequality in Latin America: A Decade of Progress? (Washington, DC: Brookings Institution, 2010).

[24]Marcelo Neri, A nova classe média: Ο lado brilhante da base da pirâmide, (Centro de Politicas Sociais, FGV, Rio de Janeiro: 2012).

[25]Ibid.

[26]A new publication by the Fundaçâo Getulio Vargas is the source for much of the information in this section, see Neri. Over the last ten years, Chinese GDP has grown at an average annual rate of 10 percent. The comparable figure in Brazil is a much more modest 4 percent. But if one looks at the household income data, Chinese household incomes have been rising at rates close to 8 percent per year; the comparable figure in Brazil is 6 percent, still a significant gap with Brazil, but much less than if the comparison were done purely in terms of GDP

[27]Neri, 25.

[28]Neri, 33.

[29]Paes de Barros et al., "Markets, the State, and the Dynamics of Inequality in Brazil," in Declining Inequality in Latin America: A Decade of Progress? ed. Luis F. Lopez-Calva and Nora Lustig (Washington, DC: Brookings Institution, 2010), 134-174.

[30]Barros, 153.

[31]Instituto Brasileiro de Geografia e Estatistica, "Pesquisa Nacional por Amostra de Domicilios Sintese de Indicadores 2011," http://www.ibge.gov.br/home/estatistica/populacao/trabalhoerendimento/pnad2011/default.shtm.

[32]Neri.

[33]Win-Gallup International Association, Global Barometer of Hope and Happiness, Table A.6.1, http://www.wingia.com/web/files/news/38/file/38.pdf.

[34]Fishlow.

[35]Each of the last three presidents—Cardoso, Lula, and Dilma most of all—suffered personally at the hands of the military during the period of civilian mobilization; Cardoso spent years in exile abroad. Lula was imprisoned for his labor union activism. Dilma was caught up in a guerilla struggle and spent years in prison in the 1970s where she suffered mistreatment.

[36]Cardoso.

[37]Centro Brasileiro de Relaçôes Internacionais (CEBRI), Brasil e os temas globais(Rio de Janeiro: CEBRI, 2006).

[38]National Water Agency (ANA), "Brazil Water: Fact Sheet," (2012), 3, http://www.brasil.gov.br/ para/press/reference-texts/6th-world-water-forum-l.

[39]CEBRI.

[40]Thomas J. Trebat, "Brazil and the Transatlantic Community," in The Brazilian State: Debate and Agenda, ed. Mauricio Font and Laura Randall (Lanham, MD: Lexington Books, 2011).