Fernando Alcoforado*
This article aims to demonstrate the need for the Brazilian people to reject, in the next elections, all candidates for the Presidency of the Republic, the State governments and the state and national parliament who seek to maintain the neoliberal economic model that, since 1990, has been compromising the economic and social development of the country, given that he is the main responsible for leading Brazil to economic bankruptcy and social devastation today. Neoliberal economic globalization began in the 1990s when the neoliberal economic model was imposed on the world and largely benefited big capital, imposed restrictive limits on the action of the national state, sacrificed local production in favor of imported products, privatized assets of the public sector that were sold at degrading prices and decimated labor rights. In Brazil, the neoliberal economic model was adopted as an alternative to the national developmentalist economic model inaugurated with the 1930 Revolution by the Getúlio Vargas government, which came to a melancholy end in the Ernesto Geisel government in 1979 with the bankruptcy of the Brazilian State and the stagnation of the Brazilian economy in the 1980s. The neoliberal economic model implemented in the 1990s further worsened Brazil’s economic and social outlook by contributing to the weakening of the state’s role in the economy and providing greater opening of the national market to foreign capital. The events that took place from 1930 to the present show that the national developmentalist model failed in Brazil because its development process was not sustainable, but the neoliberalism that replaced it failed even more by dismantling the Brazilian economy from 1990 to the present, making it extremely dependent on foreigners capital and contribute to producing the greatest social devastation ever recorded in the country.
From a social point of view, the insertion of Brazil into neoliberal economic globalization since 1990 with the adoption of the neoliberal economic model has been devastating because it has worsened the situation of the socially disadvantaged in the country, that is, the vast majority of the Brazilian population, such as the unemployed who today total 13.5 million Brazilians, the economically underutilized population that totals 32.9 million people, workers without a formal contract corresponding to 40% of the labor market, the poor who earn 35 times less than the rich, the population living in poverty and extreme poverty that corresponds to 52 million inhabitants of which 13.5 million people are in extreme poverty. Other socially disinherited people are also the homeless people in Brazil, which are increasing and there are approximately 221,869 people and those who do not own homes, of which 79% are concentrated in low-income families. Hunger and misery are on the rise in Brazil. The narrative that neoliberal economic globalization would bring global economic and social progress benefiting all countries in the world was not realized, leaving as a legacy the Great Recession that occurred in the United States in 2008, which gave rise to a prolonged crisis and stagnation of the world economy that deepened with the pandemic of the new coronavirus.
From an economic point of view, Brazil’s insertion into neoliberal economic globalization from 1990 onwards with the adoption of the neoliberal economic model increased the country’s vulnerabilities during the Fernando Collor, Itamar Franco, Fernando Henrique Cardoso, Lula da Silva, Dilma Rousseff and Michel Temer administrations, which further deepened more with the Jair Bolsonaro government, which, upon assuming power in 2019, in addition to posing a threat of dismantling democratic institutions with its neo-fascist government policy, contributes to the worsening of the population’s social conditions, jeopardizing the health of the population with its inaction in combating the new Coronavirus and degrading the country’s environment, it is further radicalizing Brazil’s insertion into the neoliberal economic globalization that is leading the Brazilian economy to bankruptcy. Practice has demonstrated the infeasibility of adopting the neoliberal economic model in Brazil from 1990 to the present, because the Brazilian economy has very low GDP growth, growing economic, financial and technological dependence on foreign countries, and is faced with the stagnation that has been aggravated by the pandemic of the new coronavirus. The outlook for the year 2022 is one of stagflation, insolvency of the Union, States and Municipalities, a disproportionate increase in the federal public debt, generalized bankruptcy of companies and, above all, an increase in the social disinherited who do not have the assistance of the Brazilian government.
It is therefore proven that Brazil’s insertion into neoliberal economic globalization from 1990 onwards with the adoption of the neoliberal economic model was extremely negative from an economic point of view. Figure 1 makes it quite clear that Brazil’s insertion into neoliberal economic globalization from 1990 onwards meant a drop in decennial GDP growth compared to the rates achieved from 1930 to 1980 during the Getúlio Vargas, Juscelino Kubitschek and post-1964 military governments, when Brazil adopted the national developmentalist model and presented decennial GDP growth rates between 4.4% and 8.6%. However, Brazil presented very low GDP growth rates of less than 3.7% from 1991 to 2020 with the adoption of the neoliberal economic model.
Figure 1- Decennial growth rates of Brazil’s GDP (%)
The economic development achieved by Brazil during the 1930/1980 period with the national developmentalist model was sustainable due to the high investment rates that occurred as shown in Figure 2, unlike the 1990/2019 period, which declined with the adoption of the neoliberal economic model.
Figure 2- Investment rate in Brazil (%GDP)
Source: https://blogdoibre.fgv.br/posts/taxa-de-invest imentos-no-brasil-menor-nivel-dos-ultimos-50-anos
In the period 1930/1980, with the adoption of the economic national developmentalist model, there were huge investments by the federal government in the expansion of economic infrastructure (energy, transport and communications) and social infrastructure (education, health, housing and basic sanitation) and national and foreigners investments in the expansion of industry, commerce and services. It was these investments that contributed to the high growth of Brazil’s GDP from 1930 to 1980. In the period 1989/2019, with the adoption of the neoliberal economic model, there was a drop in the investment rate in the Brazilian economy, which fell from 27% of GDP in 1989 to 15.5% of GDP in 2019, a fact that explains the drop in GDP growth in the same period and Brazil having been led to economic stagnation and, consequently, to a vertiginous increase in unemployment, a drop in household consumption and widespread bankruptcy of companies in the country. In the period 1989/2019, there was also a process of deindustrialization of the Brazilian economy, as shown in Figure 3.
Figure 3- Industry participation in the formation of Brazil’s GDP (%GDP)
Source: https://valoradicionado.wordpress.com/tag/pib/
The analysis of Figure 3 shows the drop in the participation of industry in the formation of Brazil’s GDP from 1987 to 2019, which fell from 27.3% in 1987 to 11% in 2019, unlike what happened in the period 1947/1987 when its share in GDP of Brazil evolved from 16.5% in 1947 to 27.3% in 1987. This means that neoliberal economic globalization contributed to the deindustrialization of Brazil.
It can be concluded, from the above, that the adoption of the neoliberal economic model by Brazil since 1990 was extremely negative from the social point of view because it was the main responsible for the social devastation that occurred with the mass unemployment of the working population, the decimation of its labor rights and the vertiginous increase in hunger and misery of the majority of the Brazilian population and, also, from the economic point of view because it meant a setback in GDP growth rates and investment rates in relation to the 1930/1980 period, as well as represented the dismantling of the industrialization process that took place during the period 1930/1987, when the national developmental economic model was adopted during the Getúlio Vargas, Juscelino Kubitschek and post-1964 military governments. Given the above facts, it is urgent to abandon the neoliberal economic model imposed in Brazil since 1990. Neoliberalism is synonymous with suffering for the Brazilian people. The economic and social ills caused by the neoliberal economic model in Brazil do not justify its continuity.
The Brazilian people need to repel candidates for the Presidency of the Republic, state governments and state and national parliaments who defend the maintenance of the neoliberal economic model that contributed to the economic and social disaster in which the Brazilian nation is debating. Candidates with neoliberal programs must be vehemently repelled by true Brazilian patriots. The Brazilian people need to elect for the Presidency of the Republic, for the state governments and for the state and national Parliament the candidates who defend, as an alternative to the neoliberal economic model, the adoption of the national developmentalist economic model of selective opening of the Brazilian economy that would allow with Brazil to assume the paths of its destiny, unlike to the current neoliberal economic model that makes the country’s future dictated by the forces of market capitalism, all of them committed to international capital.
The adoption of the national developmentalist economic model of the future would have to avoid the mistakes that led to its failure in the past, such as the belief that the development of Brazil could be achieved even with the country financially and technologically dependent from abroad and with a strong presence of foreigner capital in the domestic market. It is necessary to remember that the national developmental economic model failed in the 1980s in Brazil because the country’s economic growth was dependent on foreign capital, there was excessive external indebtedness and there was dependence of 80% on imported oil. It should be remembered that Brazil went bankrupt in the 1980s because the interest on the foreign debt increased from 8% to 19% per year and the prices of imported oil tripled. Brazil was unable to honor its financial commitments, had to resort to IMF financing and bowed to the dictates of international capital. In order not to repeat the mistakes of the past, the national developmentalist model of the future will only be successful if the Brazilian government follows the path of development, breaking with the economic, financial and technological dependence on foreign countries.
In other words, the national developmentalalist economic model adjusted to the contemporary era to be adopted in Brazil should consider the adoption of strategies that contribute to: 1) immediately execute public infrastructure works to reduce unemployment in the country; 2) tax large fortunes and dividend earnings; 3) lengthen the payment of public debt by renegotiating with creditors to reduce debt payment burdens; 4) raise investment rates in the Brazilian economy with the incentive to increase public and private savings; 5) admit the presence of foreign investments, preferably in export-oriented areas, on condition that they generate surpluses in Brazil’s external accounts; 6) maximize Brazilian exports to expand the country’s foreign exchange earnings, generate jobs and leverage the growth of the national economy; 7) adopt different mechanisms to discipline the inflow and outflow of capital; 8) grant tax incentives to attract private investment in less developed regions of Brazil; 9) encourage and reinforce research and development activities; 10) increase investments in the country’s education and health system; 11) develop a basic income program for needy populations; 12) reduce social inequalities by contemplating the adoption of measures that contribute to meeting the population’s basic needs in terms of food, clothing, housing, health services and employment, and a better quality of life; and, 13) adopt industrial, scientific and technological development and foreign trade policy that meets national interests. This whole set of measures should be put into practice based on the planning of national economic activity on a rational and democratic basis that ensures the participation of the Brazilian population, the productive and infrastructure sectors, the States, the Municipalities, the municipal, state and federal legislative powers and state and national judiciaries powers in the formulation of development plans for each municipality, each state and the country as a whole.
* Fernando Alcoforado, 82, 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), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019) and A humanidade ameaçada e as estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021) .
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