Protests in Brazil Result from Progress
In his latest column in Business Day, Tony Leon reluctantly gnaws on a slice of humble pie regarding the progress made by Brazil during the past two decades. He posits that the riots currently taking place throughout the country reveal that enthusiastic interpretations about the country's development were too optimistic. Essentially, he argues that we were wrong about Brazil.
Contrary to Leon's argument that the current riots are a reflection of insufficient progress, I would like to posit that the unrest is taking place precisely because Brazil has made such spectacular progress.
Instead of asserting that the overwhelming mountain of data about Brazil's development is somehow wrong, let us start with the assumption that the evidence which Leon himself cites is correct. Most important amongst this is the fact that Brazil's mixture of prudent macroeconomic policies and progressive social policies has reduced the poverty rate from 35% in 2001 to 21% by 2009.
During the same period, the Gini measure of inequality fell from 59 to 54, while Brazil currently has an unemployment rate of only 5.7%. This is one of the lowest figures in the world; lower indeed than in the United States, Canada and almost all of Europe. Leon perhaps somewhat underestimates the scale of overall poverty reduction, as the latest figures indicate that more than 40 million Brazilians have escaped from poverty during the past decade.
The result of all of this has been an exponential increase in the size of the middle class in Brazil. Indeed, for the first time in the country's history, a majority of Brazilians are now officially considered to be part of the middle class. Accompanying the rapid ascent of 40 million people into the middle class has been an increase in something else: their expectations. And it is the government's failure to reach these heightened expectations which are the root cause of the current protests.