Fernando Alcoforado*
This article aims to demonstrate the imperative need to halt the economic and social regression in Brazil, which has been accentuated since 1980 and which has worsened since then and which has had a negative impact on Brazilian society. The Doctor in demography and professor of the master’s and doctorate in Population, Territory and Public Statistics at the National School of Statistical Sciences – ENCE/IBGE, José Eustáquio Diniz Alves, demonstrated in his article Brasil submergente vive o pior docênio (2011-2022) dos 200 anos da Independência (Submerged Brazil is experiencing the worst docennium (2011-2022) of the 200 years of Independence) that Brazil’s economic expansion from 1822 to 1980 was followed by economic regression from 1980 to 2022. This article was published on the website <https://www.ihu.unisinos.br/categorias/188-noticias-2018/578167-brasil-submergente-vive-o-pior-docenio-2011-2022-dos-200-anos-da-independencia>. José Eustáquio Diniz Alves reached this conclusion by relating the GDP (Gross Domestic Product) of Brazil to the world GDP. Figure 1 shows that the share of Brazil’s GDP in world GDP grew from the country’s independence in 1822 to 1980 and that, from 1980 onwards, there was a sharp drop until 2022. This means that Brazil has shown an economic regression in the last 42 years years old.
Figure 1- Share of Brazil’s GDP in world GDP from 1822 to 2022
José Eustáquio Diniz Alves states that “for almost 180 years, since Independence (in 1822), Brazil was an emerging nation on the international scene and presented great population growth (it went from 4.7 million inhabitants in 1822 to 121 million in 1980 and more than 200 million today), as well as great growth in the Gross Domestic Product (GDP). The share of Brazilian GDP in world GDP rose from 0.43% in 1822 to 3.2% in 1980, but may remain at 1.9% of world GDP in 2022, as shown in the Figure 1 above. After Independence, with rare moments of setbacks, Brazil began to grow more than the average of the world economy. However, it was in the period between 1930 and 1980 that the country took a leap in demoeconomic growth, as the population grew 3.3 times (from 37 million inhabitants in 1930 to 121 million in 1980) and the GDP grew 18.2 times. In the same period, the world population grew 2.2 times (from 2.1 billion inhabitants in 1930 to 4.6 billion in 1980) and the world GDP grew 5.4 times. In the fifty years in question, the average annual GDP growth rate was 6% in Brazil and 3.4% in the world. Growing at a faster pace, Brazil has become one of the ten largest economies in the world”.
José Eustáquio Diniz Alves states that “the so-called ’30 golden years’ took place right after the Second World War, between 1950 and 1980, when the Brazilian population grew by 2.8% a year, the economy grew by 7% a year and per capita income grew by 4.2% per year. However, the situation has reversed in the last four decades and the Brazilian GDP has grown less than the world average since 1981”. Considering the poor performance of the Brazilian economy from 1980 to 2022, Brazil grew less than the world average, as shown in Figure 1. José Eustáquio Diniz Alves states that the Brazilian economy has lost pace in relation to the global average and the Brazilian people are poorer in relative terms which is demonstrated by the drop in Brazil’s per capita income compared to other countries. José Eustáquio Diniz Alves states in the article A renda per capita brasileira patina diante dos países do leste asiático (Brazilian per capita income is lower than that of East Asian countries), published on the website <https://www.ecodebate.com.br/2015/12/02/a-renda-per-capita-brasileira-patina-diante-dos-paises-do-leste-asiatico-artigo-de-jose-eustaquio-diniz-alves/#:~:text=Em%201980%2C%20o%20Brasil%20tinha,maior%20do%20que%20a%20chinesa>, that “in 1980, Brazil had a per capita income (in ppp) of 4.8 thousand dollars. On the same date, incomes were 3,200 in Malaysia, 2,200 in South Korea, 1,600 in Thailand and just 302 Chinese dollars. Brazilian per capita income was 16 times higher than that of China. However, per capita income in China grew 57 times between 1980 and 2018, 19.2 times in South Korea, 9.1 times in Malaysia, 11.6 times in Thailand and only 3.5 times in Brazil” and that “ the improvement in per capita income in East Asian countries was accompanied by an increase in life expectancy, levels of education and housing conditions, creating more efficient and more productive production systems”.
Many would ask what were the causes of the economic and social regression that befell Brazil and how to stop this process? The causes of this economic and social regression are related to the fact that, from 1990 onwards, Brazilian governments adopted the neoliberal economic model that is largely responsible for leading Brazil to economic bankruptcy and social devastation today. The neoliberal model of development has the following basic principles: 1) minimal State participation in the direction of the national economy; 2) privatization policy of state-owned companies; 3) little government intervention in the labor market; 4) free movement of international capital and emphasis on globalization; 5) opening up the economy to the entry of multinationals; 6) adoption of measures against economic protectionism; 7) de-bureaucratization of the State with the adoption of laws and more simplified economic rules to facilitate the functioning of the economy; 8) decreasing the size of the State to make it more efficient; 9) non-interference by the State in the prices of products and services that must be determined by the market based on the law of supply and demand; 10) control of inflation by the State through monetary policies based on inflation targets; 11) adoption by the State of a floating exchange rate policy; and, 12) obtaining a fiscal surplus to pay the public debt service. It was this neoliberal prescription implemented in 1990 that led the Brazilian economy to bankruptcy.
The practice has demonstrated 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 current economic recession, the accentuated deindustrialization of the country, the insolvency of the Union, States and Municipalities, the disproportionate increase in the federal public debt, the generalized bankruptcy of companies and mass unemployment demonstrate the infeasibility of the neoliberal model implemented in Brazil. 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 and social point of view. Not only Figure 1, but also Figure 2 make it quite clear that Brazil’s insertion into neoliberal economic globalization from 1990 onwards meant a drop in GDP growth compared to the rates achieved from 1930 to 1980 during the Getúlio Vargas, Juscelino Kubitschek and the military governments after 1964, when Brazil adopted the national developmentalist model and presented ten-year 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 2- 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 rates of public and private investment that occurred as shown in Figure 3, unlike the 1990/2019 period, which showed a decline with the adoption of the economic model neoliberal.
Figure 3- Investment rate in Brazil (%GDP)
Source: https://blogdoibre.fgv.br/posts/taxa-de-investimentos-no-brasil-menor-nivel-dos-ultimos-50-anos
In the period 1930/1980, with the adoption of the national developmentalist economic 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 private investments and foreigners 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 rate of public and private investment in the Brazilian economy, which fell from 27% of the 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 the vertiginous increase in unemployment, the fall in household consumption and to the 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 4.
Figure 4- Industry participation in the formation of Brazil’s GDP (%GDP)
Source: https://valoradicionado.wordpress.com/tag/pib/
The analysis of Figure 4 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 also 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 developmentalist economic model was adopted during the Getúlio Vargas, Juscelino Kubitschek and post-1964 military governments. How to stop the process of economic and social regression in Brazil in the face of the exposed facts? To halt the process of economic and social regression in Brazil, it is urgent to abandon the neoliberal economic model imposed in Brazil since 1990, given that 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 economic history of Brazil shows that, whenever it achieved significant economic development, the national state was the main protagonist of the development process, as occurred with the national developmentalism of the Vargas Era and during the governments of Juscelino Kubitschek and the military governments after 1964. When it comes to productive investments, private economic agents do not seem to be excited about the periods in which the hegemony in economic policy is neoliberal, as is currently the case, as these moments (as occurred in the 1990s and are happening today) are marked by very low levels of private investment. Among the biggest disasters in the investment cuts that neoliberal politicians usually make, when they have political hegemony in Brazil, are those in the area of Science and Technology. Here, historically, technological innovations occur when public institutions are involved. The fact is that at no time have we achieved technological innovation in Brazil without significant public investments. Once again, neoliberalism condemns us to backwardness.
In view of the above facts, it is urgent to adopt the national developmentalist economic model of selective opening of the Brazilian economy that would allow Brazil to assume the directions of its destiny, contrary to the neoliberal model that makes the country’s future dictated by the forces of the market, all of them committed to international capital. The failure of neoliberalism in Brazil and in the world does not recommend the election of a candidate for the Presidency of the Republic who insists on maintaining the neoliberal economic model, as is the case of Bolsonaro, who contributed to aggravating the economic and social disaster in which the Brazilian nation has been debating since 1980 with its government adopting neoliberal economic policies. Bolsonaro candidate with his neoliberal programs must be repelled by true Brazilian patriots because the future of Brazil will be deeply compromised if he is re-elected. As for the candidate Lula, there is an expectation that he will make the Brazilian government become a protagonist in the process of resuming the country’s development by adopting national developmental policies despite the immense difficulties he will face with the opposition of the National Congress and considerable portion of the social classes economically dominant. I hope and wish that the Brazilian people elect Lula as President of the Republic to stop Brazil’s economic and social regression.
* Fernando Alcoforado, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, of the SBPC- Brazilian Society for the Progress of Science and of IPB- Polytechnic Institute of Bahia, engineer and doctor in Territorial Planning and Regional Development from the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning, urban planning and energy systems, was Advisor to the Vice President of Engineering and Technology at LIGHT S.A. Electric power distribution company from Rio de Janeiro, Strategic Planning Coordinator of CEPED- Bahia Research and Development Center, Undersecretary of Energy of the State of Bahia, Secretary of Planning of Salvador, is the 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), A humanidade ameaçada e as estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021), A escalada da ciência e da tecnologia e sua contribuição ao progresso e à sobrevivência da humanidade (Editora CRV, Curitiba, 2022) and a chapter in the book Flood Handbook (CRC Press, Boca Raton, Florida, United States, 2022).
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