Brazil: from economics lab to world power
Brazil is one of the world's largest emerging economies, but more is needed if it is to use this economic power for all parts of Brazilian society. This will be the subject of Professor of Brazilian Studies Edmund Amann's inaugural lecture on 20 November.
‘Economic power of Brazil back to scratch,' was a heading in Dutch national newspaper Trouw in July. The Latin American country has suffered a serious economic recession. Reducing prices of raw materials, serious corruption scandals and high inflation have all taken their toll on the economy. Like Russia, India and China, Brazil was previously ranked as a strongly developing economy, but the confidence of international investors in the country has waned.'
‘Moderately positive’
Even so, Edmund Amann, Professor of Brazilian Studies is 'moderately positive' about the economic future of this Latin American country. 'Since the Second World War Brazil has made enormous progress. In the current crisis, it is all too easy to forget all that progress.’ Brazil has a very capable government that is able to manage these complex infrastructure projects; they've been very successful in setting up their own steel industry, for example. In particular the liberalisation of the Brazilian economy in the 90s proved to be an excellent starting position for a prominent place on the economic world stage.
Vulnerable
Amann has himself published on the Brazilian macro-economy and the diversification of the country's industry. 'Unfortunately, the Brazilian economy is particularly vulnerable. Periods of prosperity alternate with periods of recession. We experience the same phenomenon in the West, too, but Brazil seems to have it less under control. The country had to contend with economic setbacks in the 80s, at the end of the 90s and in recent years again.'
Extremes
Amann ascribes this vulnerability in part to the volatility of Brazilian politics. Whereas Dutch politicians and employers and employees organisations have steered a middle way through life in recent decades, the Brazilians have tended to be more extreme. 'Advocates of a larger state role and proponents of a free market have alternated with one another on the government stage. As a result Brazil has been thrown back and forth between two completely different economic theories. It has been something of an economics lab for idealists.'
Political problems
As a result, the country's economy is vulnerable and there is huge inequality between poor and rich. If anything lasting is to be done about the situation, Amann believes that serious measures have to be taken. In his inaugural lecture he calls for a resolution to be found to the political problems, as well as for investments to be made in education and infrastructure. The financing of political parties could also do with a complete overhaul. Amann: ‘They are often financed by large companies who expect something in return in the form of lucrative contracts. Making party financing transparent or funding it from the state koffers would put an end to this kind of corruption.'