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Frustrating Brazilian economic growth in 2019: less than half the forecast at the start of the year

Thursday, March 5th 2020 - 08:46 UTC
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Brazil’s economy expanded by 1.1% in 2019, marking a third straight year of frustrating activity following a massive recession, according to data released on Wednesday. Read full article

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  • DemonTree

    JB
    Re your comment on “Chile's main rock festival...”

    “TV Globo, concluded, after analysing 5,870 messages on the internet, that 90% were fake news”

    Yikes, that's even worse than I expected. And Youtube's algorithm seems to promote stupid conspiracies like the flat earth, because they keep people watching longer.

    I get the impression that ordinary people have mostly given up on holding the politicians to account. It's hard to keep that level of pressure up for long, besides that people are probably a lot more divided now.

    I don't think you can entirely blame the governments for Brazil's problems, though. There's lots of factors, internal and external, that make it hard for countries to develop. That's why I asked about the neighbours; they're mostly not doing any better, several have much worse problems. How many countries have managed to join the first world in the last 50 years? Very few.

    The changes in Brazil made a real difference to many people, they weren't just cosmetic. It's hard for me to know how much things have gone backwards, though. GDP per capita has dropped a lot but it's still well above 2003 levels, Poverty has increased but most measures are still a lot lower than in 2003. Unemployment I think is worse, though. 2003 is a long time ago, it's hard to remember what things were like back then. Now the PT has been out of power for nearly four years, and things are still pretty bad. Temer's government, at least, did not do much better at getting Brazil out of recession.

    Unlike the sex of angels (weird coincidence; I just read an essay saying common ideas and images of angels are based on eunuchs in Byzantium), political systems can be changed by the people who live in them. If America switched to PR, that would probably allow for more parties. And if Brazil required a minimum size/vote share to get funding, that would probably reduce the number there.

    Re the Amazon, how was the 'day turned to night' when the smoke from forest fires blew over SP?

    Mar 06th, 2020 - 09:47 pm - Link - Report abuse 0
  • Jack Bauer

    DT
    “get impression ordinary people have given up holding politicians to account”…when one realizes the Law is ineffective to get rid of them, most give up. I’d say most people are confused, while the parties are just focused on furthering their power, for personal gain.

    If Brazil had been colonized by the British it could be similar to the USA, but it was the Portuguese.

    When many in govt are only interested in becoming rich quickly, 'n there’s no easy way to prevent them, you get Brazil.

    To cut a long story short, imo, the gap btwn LatAm & first world is the exclusive fault of the people - i.e., govts & populations - and their cultures.
    Latin American countries may go through temporary economic booms, giving the impression they're going in the right direction (=> first world), but the underlying mentality eventually screws things up.

    “The changes in Brazil made a real difference to many people, ...weren't just cosmetic” ...over which period ? and they are ?

    I’m guessing that GDP per capita alone doesn't tell the whole story - if the richer get richer, the poor get poorer, the ‘per capita’, only as a cold nbr, may ‘seem’ to improve.
    Current unemployment levels today are thanks to the PT...proof that their “way of running things” (corruption, populism) failed.
    PT's been out of power for 3 ½ years, but the problems it caused were enormous, unprecedented. How long did it take the US to recover from 2008, even considering they were far better prepared to deal with it ?
    Temer, at best, was a welcome buffer btwn the PT ‘n 2019.

    “political systems can be changed by the people who live in them”…yes, provided they are smart enough and united (against the ruling ‘elites’).

    The Nat'l Institute of Meterology explained the phenomenon as an atypical combination : 18th Aug (pm), a cold front arrived from the coast, temperature dropped 13C in 24 hours. Low lying black clouds, heavy with rain, plus 'some' smoke from the AMZ, & Bolivia, contributed to the darkness.

    Mar 08th, 2020 - 06:36 pm - Link - Report abuse 0
  • DemonTree

    “If Brazil had been colonized by the British it could be similar to the USA”

    Definitely the North East would not be, because the economic system was similar to the Caribbean Islands (and to British Guyana, which is not at all like the US): big sugar cane plantations with the work done by slaves. That's no basis for a successful country; there's no chance for industrialisation and no consumers to provide demand for products. The southern US had a similar economy although not so exclusively, and is still the poorest part of America today. Perhaps the south of Brazil and Argentina might have fared better? Argentina got a lot of investment from Britain anyway, though. The political instability and fall in GDP rankings seem to date from about when the US became more powerful than the British Empire...

    “the gap btwn LatAm & first world is the exclusive fault of the people - i.e., govts & populations - and their cultures.”

    I'm not so sure. For comparison, 30 years after the fall of communism, there's still a significant economic gap between the former East and West Germany:

    https://www.pewresearch.org/fact-tank/2019/11/06/east-germany-has-narrowed-economic-gap-with-west-germany-since-fall-of-communism-but-still-lags/

    Two parts of the same country, separated and then reunited. How long will it take for them to equalise, if they ever do? And over that time West Germany has spent at least €2 trillion on modernising and subsidising East Germany. No one's been pouring money into Brazil or other Lat Am countries. Developing a country just isn't as easy as it looks. Once you get behind, it's hard to catch up.

    Changes in Brazil - lower poverty, higher incomes, more people in formal employment, many joining the middle class. All now gone backwards to a greater or lesser extent. Agree GDP per capita does not tell the full story. Brazil has one of the highest levels of inequality in the world, but until 2016 it was falling:

    tradingeconomics.com/brazil/gini-index-wb-data.html

    Mar 08th, 2020 - 11:19 pm - Link - Report abuse 0
  • Jack Bauer

    DT
    If the British had colonized Brazil in the 1500s / established an economic model similar to that of their N. America colony, why would the NE be different ? The ideals of those who left ENG, to go to N. Am, could well be repeated in BZL…to start a new life away from oppression, 'n not based on plunder. Had the mentality of the Portuguese settlers ('n obviously, the Portuguese Crown) been similar to those of the settlers /their descendants in N. America, is why I said “it COULD be similar to the USA” (‘n very likely different to current day Brazil).
    The fact the economy in N. Am developed as it did (the north differently to the south) has no bearing on how the different regions in Brazil, could have. I’m talking of colonial times (1500-1800), ‘n don’t forget that the NE of Brazil developed differently to, and was initially far richer that the SE.
    I’m simply expressing my opinion that if the British, I/O the Portuguese, had colonized Brazil, today we’d be better off, as is the south of Brazil, due to those who settled there.

    Re E x W. Germany, takes more than one generation to change people’s values /equalize things. East G was subjected to communism after the war…if it hadn’t been, it’d be identical to W. Germany...that says it all.

    “Brazil one of the highest levels of inequality in the world, but until 2016 was falling”….don’t kid yourself. Until 2016, lots of lies were spread (one was “joining the middle class”), by the PT ‘n a press just too willing to please…until the shit hit the fan…so I ask again, what happened during the PT era which truly improved the life of millions, in a “sustainable” fashion and didn’t crumble at the first sign of recession ?
    Don’t confuse temporary improvement (based on fragile policies) – which all but disappeared in 2013/15 - with sustained, solid improvement, and there’s no empirical evidence that Brazil progressed any differently under the PT, if compared to other BRICS countries, or the other 5 main S.Am economies.

    Mar 10th, 2020 - 07:26 pm - Link - Report abuse 0
  • DemonTree

    The economic model each colony adopted depended on what is suitable for the climate, geography etc, not just on who colonised it. Sugar cane was extremely profitable, so much so that after losing the 7 Years' War France choose to cede all their colonies in Canada to Britain in exchange for keeping Guadalupe and Martinique in the Caribbean. With so much money to be made, those regions were never going to be settled by small farmers and ordinary people from the mother countries the way the 13 colonies in North America and French Canada were. Plus such settlers would prefer a climate more similar to those they were used to and that their usual crops could grow in.

    That's why I think the NE would not be hugely different whoever colonised it, whereas the cooler, originally poorer parts of Brazil might be. How much transfer of culture is there going to be when a large proportion of the population are slaves who are allowed no education at all? Probably makes more of a difference where in Africa they were originally from, there was a wide range between organised, developed kingdoms and nomadic tribes, but I don't know if that differed between Portuguese and British slave traders.

    AIUI, when the Portuguese originally came to Brazil they were seeking to make money and then go home, not settle there and build a new life. I think that makes a big difference and creates a very different sort of colony, which is probably part of what you mean? Later, people did come to settle in the south and SE and those are now the most developed regions, so if that had happened more in colonial times maybe Brazil would be better off today.

    Run out of space... where's that stubborn idiot Terry when you need him?

    Mar 10th, 2020 - 09:41 pm - Link - Report abuse 0
  • Jack Bauer

    DT
    Agree that climate determines the type of agriculture, and can influence the economic model, but my point is that driving force behind those who settled in N. America is what made it into what it is today, and the Portuguese monarchic system is what took Brazil in a different direction, creating a political culture in Brazil, mainly in the NE, which remains until today/ is the main obstacle to joining the first world.

    The Portuguese first arrived in the NE, and soon after (1534) Brazil was divided into 14 “capitanias” (sliced Brazil into 14 horizontal slivers) which were distributed amongst the King’s friends ; one of the few that prospered was Pernambuco (due to sugar cane, and was the one which later caused big headaches for independence and D. Pedro I).

    These feudal lords lost their power when slavery ended /mass immigration from Europe started, mainly the to the S ‘n SE (which soon became industrialized).
    And just fyi, sugar cane grows everywhere in Brazil.
    So, in a way, the economic model was a result of the political system, very different in N. America. Had Brazil been colonized by the British, they probably wouldn’t have instituted the “capitania” system, so the fact the NE was the first to prosper because that’s where sugar cane was first planted, is because of the political/economic system the Portuguese implemented.

    Back then Brazil had no poorer parts, just unexplored parts.

    Slavery played a similar role in the US, however it didn’t prevent the US from progressing after it ended.
    Where the slaves came from in Africa made no significant difference after they became slaves.

    “when Portuguese originally came they were seeking to make money/then go home, not settle….think that makes big difference/creates a very different sort of colony, which is probably part of what you mean” ? EXACTLY.....what I’ve been saying all along.

    Re the idiot, be careful what you wish for…..

    Mar 11th, 2020 - 07:09 pm - Link - Report abuse 0
  • DemonTree

    Sounds like we mostly agree, but I don't think the British colonies in the Caribbean had anything like the 'capitanias', and they still ended up with a very feudal sort of system. Also I believe several colonies in tropical regions failed due to disease, which could also be a consideration in parts of Brazil.

    If sugar cane grows all over Brazil, why isn't it grown everywhere? Not economical in all regions? Or other crops provide better value? I heard São Paulo got rich growing coffee and Minas Gerais was famous for it's dairy industry.

    Re the slave owners, at least Brazil didn't have to fight a civil war in order to abolish slavery, but they obviously caused a lot of problems. It would be interesting to view an alternate universe where the Confederacy survived, to see how well or badly it progressed after splitting from the US. The Northern states were already far more industrialised at that point.

    Were the S and SE of Brazil less explored than the NE when the mass immigration began? Or why did the immigrants mostly go to those states?

    From before:

    “if it hadn’t been, it’d be identical to W. Germany”

    Or at least a lot more similar. Do you really think values are much different there today, though? The UK has rich and poor regions, does Devon have a GRP per capita of £22,200 and Berkshire of £51,100 because of cultural differences? No, it's because businesses cluster in already developed areas and it's very hard to change that later unless there is a big shift in the nature of business, like the change from heavy industry concentrated in the north of England to services concentrated in and around London.

    The GINI index I linked above shows inequality was falling in Brazil, but is rising again since the PT lost power. And people know whether they are better off or not; if the press was so good at convincing people of lies then Dilma's popularity wouldn't have plunged to single figures after the recession started to bite.

    Mar 11th, 2020 - 11:53 pm - Link - Report abuse 0
  • Jack Bauer

    DT
    Note, I’m comparing the colonies of N.Am ‘n Brazil upto/soon after independence ; the US became successful, while Brazil, under Portugal’s influence/culture (monarchic, ‘friends of the king’ etc), relatively speaking, failed.
    You’re right, there’re many reasons why colonies fared better or worse, but my point was/is, Brazil would be better off if colonized by Brits.
    Sugar cane : Mainly SP (60%), north Paraná, 'n NE ; RJ, MG, MT, ES, to a lesser extent. “Or other crops provide better value?” Exactly.
    Coffee’s big in (mainly) SP (‘n PR, ES) ‘n dairy products, MG.
    With the abolition of slavery in the US, ‘n Britain repressing the slave trade into Brazil, slave-owners had no choice. The NE/ sugar cane dominated Brazil economically until roughly 1800, but when SP became an important coffee producer (circa 1800, growing exponentially until 1900) the 2nd immigration wave began, to replace slave labor.
    100s of thousands of Italians (‘n dozens of 1000s of Germans /other Europeans) arrived (mainly SP) in the 1870s, ‘n many went south (better working conditions), continuing down to Argentina/Uruguay. I’d say the mid 1800s was the turning point, when the S & SE became more powerful.
    In 1908, dozens of 1000s of Japanese farmers arrived. So looks like immigration was instrumental in consolidating the economy in the SE.
    The GINI index (nearer to zero, the better) indicates BZL was closer to “perfect equality” in 2010 ‘n 2014/16 (?), but I maintain that most of the ‘improvement’, or so called ‘perfect equality’ was only temporary, and false, as built on very fragile foundation (B.Fam).
    The BF carries on the same now, but will never lift people from poverty (or equalize incomes), ‘n after the crisis, even many families, which were doing relatively ok, are now having a tough time - which obviously impacts the index negatively.
    People always rush to believe good news, fake or not, 'n the press defended Dilma ‘n her lies, until they could no more, without looking stupid.

    Mar 13th, 2020 - 04:13 pm - Link - Report abuse 0
  • DemonTree

    “I’m comparing the colonies of N.Am ‘n Brazil upto/soon after independence”

    Don't know all the details of what either was like right before independence. I've heard the average colonist in America was a lot better off than ordinary people in Britain, though.

    Also, a random though: did Portugal ever send convicts to Brazil like Britain did to America and later Australia? That turned out surprisingly better than you might imagine.

    If sugar cane is widely grown in SP today, how come it didn't get rich early on like the NE? Did they just not bother trying until much later?

    Even after falling, Brazil has a very high Gini index; it's probably one of the things making it harder to develop. Don't know how much influence the BF had on the fall though, and how much was better jobs/higher wages. For rich countries taking account of taxes and benefits reduces Gini index by 15 to 30%, which is pretty significant.

    I saw Congress had just decided to increase benefits, overruling Guedes' plans, and the Real has reached 5 to the dollar already. TBF a lot of countries are increasing spending due to the Corona virus, though. We have just been told to work from home if possible and to self isolate for 7 days if we had any symptoms. We were supposed to have some friends round today and had to cancel because two of them have colds. At the office we had two colleagues visiting from US and they have flown back early in case Trump decides to bring in more bans. How's it going in Brazil?

    Mar 13th, 2020 - 10:48 pm - Link - Report abuse 0
  • Jack Bauer

    DT
    “Don't know all details”; Neither do I, but have good idea, especially here.
    Despite great differences btwn lives of those who went ‘west’, ‘n those who remained in the East, US grew / transformed itself, driven by people with ideals, ‘n (if true), not surprising “average colonist in America was better off than ordinary people in Britain”; Wasn’t that why they left Britain in the first place ?
    During the 16 /17th C, Portugal exiled those persecuted by the Catholic church for heresy, to Brazil. Soon realized was a good way to get rid of undesirables, convicted for small offences, but no mass transfer of criminals.
    The fact sugar cane's now concentrated in SP, has little to do with the NE’s economic decadence. Other reasons led to that :-
    Coffee was introduced to Brazil (Pará), 1720/30, ‘n initially only attended locals. Must’ve come to SP late 1700s, because the coffee cycle in the SE started 1800, ‘n by 1850 was Brazil’s main export.
    After Columbus took the first sugar cane to (what’s today) the Dominican Republic (1493), it was first planted in the NE in 1532 (PB & BA), where it dominated until 1800. During that time, the Brits ‘n the French, seeing the profit to be made with sugar, took it to their Caribbean possessions, ‘n competition eventually reduced its importance in the NE, which coincided with the coffee cycle.
    Plus the facts, that cheap labor (slavery) was on the way out, ‘n mass immigration began, screwed the NE.

    Re GINI index : right from the start (let’s say after independence in 1822 ?), the gap between the lower / higher classes was enormous, and with a quickly growing population - amongst mainly the lower classes (with ex-slaves) – to reduce inequality is a tremendous task, not helped by the unwritten govt policy of just “pretending” they were doing “all they could”.
    Congress is just interested in its own belly button, but the extra $ 20 Bi/year (BPC) has just been overturned by the TCU.
    Govt’s doing a good job to contain the virus.

    Mar 14th, 2020 - 07:22 pm - Link - Report abuse 0

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