NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, March 14, 2012

Brazil and India can benefit from each other’s experience for an inclusive development agenda.

Expectations are high for the fourth summit of Brazil, Russia, India, China and South Africa, to be held in New Delhi on March 29. With an economic crisis in the eurozone and signs of another global recession, anticipation is mounting for how the BRICS leaders will address the world economic slowdown and how far they will push to reform the institutions of global governance.

Yet with the spotlight on the economy, a promising and tangible development agenda could be overlooked. At every summit, members have renewed their pledge to strengthen cooperation on social protection, public health, food security and agriculture. But little has been achieved so far. For India — home to a third of the world’s poor — these efforts should be a priority.

The potential benefits of cooperation are especially clear in the case of Brazil. India and Brazil have declared inclusive development an imperative and have engineered creative solutions to meet their developmental challenges. But both also face many obstacles to equitable development — some of which can be overcome through mutual learning and targeted bilateral investment.

‘Zero Hunger’

Brazil’s “Zero Hunger” strategy, for instance, has been successful in reducing poverty, inequality and hunger by developing profitable small farms and delivering cash to poor families through innovative payment systems. As the debate rages in India about how best to reduce poverty, curb growing inequality and boost agricultural production, Brazil’s experience can help.

Brazil’s social schemes are among the world’s best targeted and are transparent. They have demonstrated how to streamline the delivery of services across all levels of government. By collaborating with Brazil, India can improve the reach and efficiency of its own, notoriously leaky schemes, including the Public Distribution System, whose losses are estimated to be around 44 per cent a year. There are of course vast differences between the two countries. India’s poor are twice Brazil’s entire population, for example. But that shouldn’t stop India from borrowing some good ideas. It’s not necessary for India to indiscriminately adopt cash transfers or other Brazilian schemes to benefit from knowledge sharing. India can leverage its private sector skills to scale up programmes.

In turn, Brazil can benefit from India’s innovators, who are finding novel ways to provide the country’s low-income population greater access to products, services and employment that enhance living standards.

India has produced the world’s cheapest car, electronic tablets that cost $50, large, successful retailers who link thousands of rural workers to modern urban markets, and family-sized apartments in cities that sell for $4,200. In the affordable housing sector the long-term opportunities for partnerships with Indian entrepreneurs are particularly significant. Brazilian officials predict a deficit of 23 million homes for low-income families in the next 20 years.