Fernando Alcoforado*
Brazil faces two major obstacles to its development: 1) the neoliberalism that has been devastating the country since 1990; and 2) the process of ruining the world economy. The neoliberal economic model implemented in 1990 is largely responsible for leading Brazil to economic bankruptcy and the gigantic social crisis today. The practice has been demonstrating the unfeasibility of the neoliberal economic model in Brazil inaugurated by President Fernando Collor in 1990 and maintained by Presidents Itamar Franco, Fernando Henrique Cardoso, Lula, Dilma Roussef, Michel Temer and Jair Bolsonaro. The ruin of the world economy is manifested in the collapse of the global financial system with the inevitable collapse of the dollar and the end of the world capitalist system in the mid-21st century.
The main problem of the country today is the stagnation of the economy with its consequences related to the closure of industries and commercial and services activities and, above all, the mass unemployment of 13 million workers and the underutilization of 28 million workers. Bolsonaro and his ministers demonstrate that they are not effective managers because they do not spend their time working on what really matters to Brazil at the moment which is the reactivation of the economy and the fight against unemployment, they do not drive their efforts to the desired results by the Brazilian people which is the resumption of national development, do not start with what needs to be done (reactivating the economy and fighting unemployment) and do not focus on the few large areas where superior execution will produce excellent results for the country.
Before reactivating the Brazilian economy, the Bolsonaro government should abandon the neoliberal economic model implemented in 1990 from which the federal government abdicated national economic planning. The neoliberal model, responsible for Brazil’s economic debacle, should be immediately replaced by the national developmentalist model with active state participation in economic planning, as occurred in the 1930-1980 period when Brazil reached its greatest economic and social development. The analysis of Brazil’s 10-year GDP growth rates from 1901 to 2010, projected from 2011 to 2020, undoubtedly shows that the best performance of the Brazilian economy with the highest growth rates occurred between 1930 and 1980, thanks to the active participation of the Brazilian state in promoting its development.
From 1990, the federal government abdicated from planning the national economy influenced by the neoliberal theses that considered that it was market responsibility to promote the expansion of the economy. From 1990 to 2014, Brazil had very low GDP growth rates. Between 2011 and 2020, the Brazilian economy should advance on average 0.9% per year, according to FGV. This rate is lower than the 1.6% of the so-called “lost decade” in the 1980s. In 2015 and 2016, for example, GDP grew negatively by 3.5% and 3.3%, respectively. It was a negative milestone for the country’s economic history. Brazil had not had two consecutive years of recession since 1930 and 1931 when the world was affected by the effects of the 1929 economic crisis and the New York Stock Exchange crashed. Now Brazil is experiencing 5 years of recession with no prospect of a short-term solution. In the last two years, GDP has grown by only 1.1%. These numbers demonstrate the failure of neoliberalism from 1990 to the present time in Brazil.
The developmentalist experience in Brazil from 1930 to 1980 had in the federal government its main agent and as its main support the industrialization process. The economic history of many countries shows that active state participation as a driver of development has been the solution to overcome economic backwardness. This was the case of Japan in the 1970s, South Korea in the 1980s, and China from the 1990s to the present. The economic progress achieved by these countries was mainly due to the role played by the state in promoting development. Most likely the economic performance of these countries would be lower if their economies came under the free play of the market. The role of the state is decisive for the development of the conditions to increase technical progress and enable the process of capital accumulation in peripheral countries of the capitalist system, as demonstrated also in Brazil from 1930 to 1980. The state can act by planning the economy and supporting national companies in the country’s development process.
It is urgent that the Brazilian State take the reins of the national economy by abandoning the failed neoliberal economic model to reactivate the Brazilian economy and full employment. The Brazilian government should consider as a number one priority to reactivate the economy with the immediate execution of a broad program of public infrastructure works (energy, transportation, housing, sanitation, etc.) with the participation of the private sector to combat the current mass unemployment by raising household employment and income levels and income of corporate, thereby promoting the expansion of household and corporate consumption resulting, respectively, from the increase in household wage bill and corporate income from investments in public works to make Brazil grow back economically. In addition to the public works program, the Brazilian government should develop a broad program of exports, especially in agribusiness and the mineral sector, drastically reducing bank interest rates to encourage household consumption and corporate investment, reducing the tax burden with the freezing of high wages in the public sector, cutting stewardships and public administration organs, and the fall in interest and amortization charges on public debt to be renegotiated with public debt creditors for the government to dispose of resources for investment in economic and social infrastructure. Without the adoption of this strategy, Brazil will inevitably lead to economic ruin and political and social upheaval.
In the article The Solutions to deal with the Global Economy ruin we state that the solutions to problems related to the ruin of the world economy in the mid-21st century consist primarily of: 1) the establishment of a stable international financial system not subordinated to finance capital; 2) the implementation of social democracy in all countries along the lines of Scandinavian countries (Sweden, Denmark, Norway, Finland and Iceland) in place of capitalism because it is the most successful model of society ever implemented in the world; and 3) the constitution of a world government to avoid the empire of a most powerful country and the anarchy of all countries aiming not only at economic ordering on a world scale, but above all to create the conditions to face the great challenges of humanity in the XXI century (ALCOFORADO, Fernando. The Solutions to deal with the Global Economy ruin. Available on the website <https://www.academia.edu/40038496/SOLUTIONS_TO_DEAL_WITH_THE_GLOBAL_ECONOMY_RUIN>). This means that Brazil should strive to achieve these goals by the middle of the 21st century simultaneously with solving the country’s internal problems.
The implementation of social democracy in Brazil in the Scandinavian molds in substitution of capitalism should occur after the maturation of the national developmentalist model to be adopted to solve the country’s internal economic problems. In order not to suffer the consequences resulting from the end of capitalism and bankruptcy of the system In the mid-21st century, Brazil should immediately adopt a strategy that minimizes the impact of the global crisis on its society by selectively inserting itself into the global economy and emphasizing the development of the internal market. At the same time, it should start structuring a new society that replaces the national developmentalist model, which would replace current neoliberalism, with another economic model that would be a hybrid of capitalism and socialism along the lines of the social democracy of Scandinavian countries (Sweden, Denmark, Norway, Finland and Iceland), characterized by the combination of a broad welfare state with rigid mechanisms of market forces regulation with the ability to put the economy on a dynamic trajectory.
Brazil should fight in international fora for the establishment of a stable international financial system not subordinated to financial capital and the establishment of a democratic world government that, in addition to promoting economic ordering on a world scale, should create the conditions to meet the great challenges of the humanity in the 21st Century which consist of: 1) Chain economic and financial crises; 2) Social revolutions and counterrevolutions across the globe; 3) Cascade wars; 4) World overpopulation; 5) Deadly pandemic; 6) Extreme climate change; 7) Organized crime; and, 8) Threats from space whose global actions to counteract them are impossible to be carried forward by individual national states and current international institutions.
Very hardly, the Bolsonaro government will adopt the above measures because it is submissive to the interests of the US government and international capital, and is dominated by neoliberal blindness.
* Fernando Alcoforado, 79, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional Development by the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning and planning of energy systems, is author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018, em co-autoria) and Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019).
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