Inclusive economic growth and Brazil’s protests

Monday, June 24, 2013

Brazil’s weeklong protests, which have brought hundreds of thousands of people into the streets across the country, have scored their first victory: Officials in the major cities of Sao Paolo and Rio de Janeiro have agreed to rescind the 20 cent bus fare hike that sparked the protests in the first place. But this conciliatory move, far from placating the crowds, seems to have energized their demands. Large marches are planned for the coming days with demands now focused on better education and health care and greater efforts to tackle corruption.

So far, Brazil’s rising middle class has been the backbone of this protest movement: as their economic prospects have improved, their expectations for better public services have grown. Between 1999 and 2009, Brazil’s middle class expanded by 31 million, and successive governments have done a laudable job in tackling poverty. The country’s Bolsa Familia program a conditional cash transfer program that disburses cash to poor families in exchange for good behaviors such as sending one’s children to school — has achieved significant success and now covers more than 12 million families. As the Financial Times notes in an article about Bolsa Familia: “In the ten years to 2011, the proportion of the population in extreme poverty fell from 14 per cent to 4.2 per cent. The income of the poorest 20 per cent rose seven times faster than the richest during the same period.” How many countries can claim that? Indeed, the opposite dynamic has been the case in theUnited States.

Despite these real gains, this week’s demonstrations attest to the fact that Brazil’s government can’t rest on its laurels. In a new Council on Foreign Relations book that I co-authored, “Pathways to Freedom: Political and Economic Lessons From Democratic Transitions,” one clear takeaway is that “the trajectory of emerging democracies depends fundamentally on whether political democratization can also deliver shared opportunity and inclusive growth to materially improve people’s lives.” In the book’s chapter on Brazil, author Carlos Pio makes the case that increased government spending on education has certainly improved primary school enrollment and raised literacy rates, but real problems with educational quality remain. Brazil’s 15-year-olds score in the bottom quintile of the OECD’s PISA (Program for International Student Assessment) tests. Brazilian parents recognize that their schools are falling behind in educating their children.

Source: Devex (link opens in a new window)