Desigualdade Global - Capítulo 5: Brasil

[GUIDO MANTEGA - former minister of Lula e Dilma] We believe the Brazilian economy is in full recovery mode. [GUIDO MANTEGA - former minister of Lula e Dilma] Pretty it soon it will be able to stand on its own two feet. [FERNANDO HENRIQUE CARDOSO - Former President of Brazil] The most dramatic problem may be income.

Income distribution is very unequal. Now the price of everything will go up, but wages won’t. You’ll be unemployed.

[LULA - Former President of Brazil] Brazil has the chance to overcome its problems. I think life is limited, and what’s it good for? To have the best.

And you live precariously. It’s crazy! One of these days I’ll be shot at home.

Every day is a fight for survival, every day you have to kill a lion [PAULO GUEDES - Bolsonaro Economy Minister] The economic model is bad, it’s run out. [JAIR BOLSONARO - President of Brazil] Brazilians can and should dream of a better life, [JAIR BOLSONARO - President of Brazil] of better conditions to enjoy the fruits of their labour with meritocracy. As far as eating goes, nowadays if you eat once a day you’re very well off [JAIR BOLSONARO - President of Brazil] To say people go hungry in Brazil is a big fat lie.

[MICHEL TEMER - Former president of Brazil] I haven’t the slightest doubt that we’ll come out of the crisis GLOBAL INEQUALITY BRAZIL - COUNTRY OF PRIVILEGES [WALLACE GUIMARÃES - RESIDENT OF MORRO DO VIDIGAL, RIO DE JANEIRO] A while ago I was making big money working with movies, things were going well. I had a future. You would see folks leaving class D and entering class C and you’d think “one day that’ll be me.

I’ll go from class C to class B. ” The tendency was for things to improve. [LUIZA DE MARILLAC - RESIDENT OF POÇO DA DRAGA, FORTALEZA] In 2002 I decided to take a technical nursing course.

After the course I found two jobs and began making good money. I made 3,000 reais. [MARCELO NERI - DIRECTOR OF FGV SOCIAL] Brazil was in a process of inclusive growth.

This went on until 2014. After that we went to the other side. I mean, income fell and inequality grew.

As soon as I began working two jobs, I looked for comfort. And what is comfort? It means having a washing machine, a microwave oven, a sandwich toaster, a food mixer.

. . I had some money put by and I took out around 12 thousand.

I invest in a barber shop. I paid 1,200 for rent, paid somebody to stay there, paid the Wi-Fi and the water bill. And then a year or two later the movie work stopped coming in.

I couldn’t pay for the barbershop. I had to go on paying my daughters’ alimony, their health plan. And I’m not about to take on even more debt.

So I gave up the barbershop and here I am. I lost my work. My husband couldn’t find any more odd jobs.

Things got harder and harder. One salary, only one person working. It’s the cooking gas, the cleaning things, the transport.

My mother used her pension to help pay our food. [HÉLIO HONÓRIO - FORMER BUSINESSMAN, NOW STREET VENDOR IN SÃO PAULO] I set up a handbag factory. It was going well, with 22 employees.

As long as there were no imports we were doing great. I sold 20,000 reais worth a day. I don’t know how I got to this situation, it wasn’t supposed to be like this.

I ask myself “hell, what did I do with the money? ” [FERNANDO BURGOS - PROFESSOR AT FGV-SP] The idea is we had a middle class that was doing well these last few years and maybe had “gone through the turnstile”, as some experts say. I would use instead the image of “went through the revolving door of a hotel”.

He can see what’s inside, he can see there’s a world there that is very different from the one he was in outside, but the door goes on turning and suddenly he’s outside again, looking back. I lived here for two years, 2008 to 2010. A three bedroom flat.

With two parking spaces. I had two cars here, both bought new. I had this, I made enough for this, I could afford it.

I lived easy, you know? Poverty increased greatly in Brazil. It had fallen 75 per cent from 1990 to 2014 but rose 40 per cent during this crisis period.

[VALMIR DOS SANTOS - COMMUNITY LEADER OF SOL NASCENTE, FEDERAL DISTRICT] People are desperate. Imagine what it’s like having everyone at home unemployed. In a situation in which at other times you might have found some way out, but now it’s impossible.

So how are we going to survive? [ARMÍNIO FRAGA - FOLHA COLUMNIST AND FORMER CENTRAL BANK GOVERNOR] People need to feel they are part of a project. But it’s very hard to understand that this isn’t a zero sum game when you have aberrations such as the famous Businessperson Benefit in this country.

So this idea of “right, but I defend Brazil, our national businesses. . .

” It might even make sense with some strategies, but in most cases it does not. Bus fares go up the whole time, the price of cooking gas goes up constantly, but salaries don’t increase. And you feel really afraid, as I am now.

[NAERCIO MENEZES - ECONOMIST AT INSPER] The cycle we had during the Lula administration and the first half of Dilma’s administration involved low-skilled sectors. But what about the most dynamic sectors of society? What about advanced industry, new technologies?

There’s nothing. And there hasn’t been anything for about 30 years in Brazil. [MARCOS LISBOA - FOLHA COLUMNIST AND PRESIDENT OF INSPER] In the 1950s, 60s and 70s Brazil opted for policies seen as pro-development, concentrated state resources on subsidies and protections and on university education for the elite.

And we neglected education for the majority. [MARCÍLIO SALES - RESIDENT OF SOL NASCENTE] Sol Nascente received the title of the biggest favela in Latin America. Our HDI is extremely low.

In this area there was a state school that served half of the children. [LÍLIA M. SCHWARCZ - HISTORIAN] Education never was democratic and for all.

Brazil is the country with the second largest population of African origin, but even so we have a very strong race marker regarding education – black men are the ones with least access to education. Education is an example of how social policies have been neglected in Brazil. And now that intelligence and knowledge are so important to economic growth, we have generations and generations that haven’t had the access to education that other countries have.

My eldest daughter studied at Prouni and managed to graduate in Law. My second daughter took Physical Therapy thanks to Fies. My third daughter graduated in secretarial studies through Sisu.

My fourth son isn’t going to college. Not if we have to pay, we can’t afford it any more And quotas greatly increased the presence of black students, poor ones and students coming from state schools. So, although a lot was spent on them, these universities bring returns to society.

Because these young people will triple their monthly salary for the rest of their lives. Well, they’ll triple their salaries if they can find jobs. I think that’s the big question, isn’t it?

[MARCÍLIO SALES - RESIDENT OF SOL NASCENTE] I live here in Sol Nascente. You see this place: where are the jobs? There aren’t any.

I’ve been unemployed for over two years. And I feel the circle closing around me. Things are going against us, the weaker side.

It’s a contradictory thing. For instance, in Brasília, close by, you have high-level civil servants who are paid high salaries, even compared to other states. [CLAUDIO HAMILTON DOS SANTOS - ECONOMIST] Brazilian civil servants earn on average almost twice what is paid in the private sector.

And the Federal District civil servants earn almost twice as the civil servants in the rest of Brazil. So they receive practically four times what an average worker in the private sector is paid. This clearly shows a certain disconnect.

I believe today over 50 per cent of the population is either unemployed or underemployed or doing anything they can to survive. As a matter of fact people thank God when they’re able to eat. Several elements in Brazilian history offer clues to understanding inequality.

We stopped being a colony in 1822, but became a monarchy surrounded by republics. Brazil was also the country that received the greatest number of slaves, and this caused the language of slavery to take root among us. And with great consequences, as it makes inequality a natural thing.

Another thing is that Brazil was an exploitation colony. Due to this we are a country of large agricultural estates, also of great dominations and of great land concentration in a few hands. There’s so much money, while we have nothing, you know?

We survive on just the minimum wage. And when you become unemployed. .

. you choke up. Comes the morning and your child wants to eat.

It’s very sad. I’m really sorry to have to tell you about this stuff. Inequality was falling as incomes were increasing with the commodities boom, etc, but now both things are falling.

We may have some small recovery in the economy, but average incomes haven’t improved. It’s very slight. In my case I was fortunate to have found work with movies, because living in the slum you have no expectations.

You have no access to schools, no access to information, what are you going to do? What’s closest to your reality is selling candy on trains, selling juice or collecting tin cans on the beach, or stealing or whatever. The place where you are born, the family you’re born in are very important to who you will become in future.

If you’re born in a poor family you will face hardship your whole life. What’s lacking in Brazil is the prospect of mobility. [GILSON FERNANDES - ASSOCIATION OF RESIDENTS AND SHOP-OWNERS OF PARAISÓPOLIS, SÃO PAULO ] I realized that Paraisópolis was different from its surroundings when my aunts had to say they lived in Morumbi to have some chance of finding a job or a course, or even of enrolling us in school.

People would look at you and could tell you weren’t “somebody who lives in Morumbi”, but if you said you were from Paraisópolis they wouldn’t even give you a chance. [Reporter] Why have you never brought your daughters here? Because I’m ashamed.

I’m ashamed of not having anything better to offer them. I’d rather not bring them here. I’ll never bring them here!

Not my daughters or anyone else! We got a little money together here, a little money there, and bought this house. We bought this place for R$10,000 at the time.

My mother also had a little house in Belford Roxo, that also has . . .

(shots ringing out) Lock, lock. It's shooting, a lot of shooting. Sometimes I think of bringing my daughters here.

But imagine if they were here now. [REPORTER] there’s a guy out there building something. Yeah, he’s got his shovel out.

That’s for you to see that this has become routine. There’s a guy building. I wouldn’t do it.

I have my kids to bring up, I don’t even go out on the rooftop. Just imagine if I’m taken for somebody else. This has become normal for the guy, it’s just a day like any other.

[MOTHER ON THE PHONE] are you at home? [WALLACE] I am, Mum, I’m at home. [MOTHER] Take care of yourself for God’s sake.

[WALLACE] Ok Mum, calm down. It’s 10:39, May 13. Shots being heard on Vidigal.

Be careful on Niemyyer (avenue). Be careful on Vidigal, dammit! Careful on Niemeyer, haha.

Just think. “Careful, you bourgeois folk walking along Niemeyer! ” Rising inequality tends to worsen economic growth in various ways.

One of these ways is the increase in violence, which destructures productive activities, besides the direct costs of violence. From up here on Vidigal you can see Leblon, the most expensive square meters in Rio. Over here, the lights just go out for no reason.

Bang! While over there in Leblon everything is lighted up, the light can’t stop. Here it can.

The post doesn’t arrive here. But armoured police cars do. PRETO ZEZÉ - PRESIDENT OF CENTRAL ÚNICA DAS FAVELAS] We’re not a priority.

If our focus is fighting inequality, let’s improve these territories that are completely excluded from public budgets. If we don’t have a real and concrete policy for sharing opportunities and wealth, unfortunately we are going to share the tragedies caused by this concentration. [RICARDO PAES DE BARROS - CHIEF ECONOMIST, INSTITUTO AYRTON SENNA] We have been spending a large percentage of GDP on our social policies.

But we allocate badly, we are spending a large part of our resources for the social area on transferences and much less on equalizing opportunities. Bolsa Família is a fantastic “first benefit program”, but it’s not enough for people to leave that very low income level behind. They need to go a lot beyond that.

We need to start allocating, to start building bridges between the programs. I mean, when somebody leaves Bolsa Família, what’s the next step? Do they get a salary bonus or microcredit for opening a small business?

In Brazil we have essentially built a state that is a machine for transferring money from one group to another in a very confusing and messy way. But at the end of the day our policies aimed at the majority of the population are sacrificed due to this tangled web of transfers. Inequality is so great that things become dysfunctional.

This is food for populism, which in its turn is a force that is totally harmful to building good public policies. [Speech during demonstration in favor of Bolsonaro] Don't let anyone talk bad about what is being done in Brazil. Economies, Brazil is positioning itself to be one of the best countries in the world.

[WILTON LIMA - BOLSONARO VOTER] - I was 7 years old when Lula was elected, in 2002, and as far as I remember he did the right thing. I won’t say he only did bad stuff, he did good things too. Food prices went down, things got better.

Home appliances too. But you know what the problem was? He lowered prices at the time, but soon after we got the bill to pay, you know?

And the PT guys, were they stealing? They were, but they helped poor people out a little, you know? So folks are still getting Bolsa Família today.

When you have a series of programs with which a leader in Brasília, at the push of a button, injects money into the veins of half the population, through pensions and other programs, including Bolsa Família, this also creates a certain lack of political mediation which involves risks. I think we can’t ignore this. It’s pure populism, saying what the people want to hear.

As for Bolsonaro, I don’t think he was the best choice, but he was the only option we had. Because PT did what it did during all those years. So I said: I’ve seen his positions (Bolsonaro’s), his proposals, and I said “cool”.

We try to console ourselves looking at the global picture. There’s Trump, there’s Brexit and there’s what happened in Brazil. This turnabout is part of the same big picture.

It’s not that Brazil had the lowest level of approval of political leaders in 2018, therefore before the elections, in the world. It’s the worst of the historical season. Over ten years of data, over more than 700 cases, no other country in the world had such a high level of disapproval.

I think this was reflected in some way in the election. If I had to design a country that would have very great inequality, extreme inequality, and you would not be able to change this easily, you couldn’t think of a better example than Brazil. I think we have failed to take care of how the state intervenes in the economy and in society.

We have litte patience to try and understand causes, evaluate how other countries do things and shape our public policies. Our policies frequently are a kind of guerrilla warfare, they are very authoritarian and violent. The rules of the game can be changed very easily.

So everybody feels threatened. I fear the results of this process. I don’t see much attention paid to issues of inequality.

On the contrary. And this is very serious. People ask: “Will people in other countries be shocked by this?

” Yes, but what’s much worse is how this affects people right here. At times of crisis we have dismantled some fundamental gains. For instance, gains in institutional strengthening, which is necessary.

In other words, the country will only build a strong democracy if its institutions are strong. Why aren’t they strong? Because every time a crisis arrives we go back to our patrimonialist mindset.

I think we have lost that goal, that objective. We had a goal of fighting inequality, and I think Brazil has left that “middle way”. But if we don’t take very decisive action to fight poverty, if we focus only on growth.

. . in 15 years’ time we’ll be back where we were when the crisis began.