Inclusion and Austerity in Brazil

Human Wrongs Watch By Ladislau Dowbor* Why austerity is not working?

11 April 2021 (Wall Street International)* — Brazil is not a poor country. With a GDP of roughly 1.8 trillion dollars, and a population of 210 million, what we produce amounts to US$2,830 per month per four-member family.

In Brazil, living with the equivalent 15 thousand Real a month would be a dream for most families. In fact, a moderate reduction in inequality would be sufficient to make sure everyone has a dignified and comfortable life.

This simple way of presenting the situation, not in yearly per capita, but in monthly family income, helps bringing us down to earth. Our challenge is not the lack of resources, but the social and political organization gap. To put it more bluntly, we are facing social and political chaos.

This is also true in global terms. Present world GDP is about US$88 trillion, for a population of 7.8 billion, which amounts to 3.8 thousand dollars a month per four-member family. Whatever the economic impact of the pandemic, what the world produces should ensure we all have enough for a decent life.

We are mourning more than two million deaths resulting from Covid-19, but we should put this in perspective. In the world, over 3 million children aged under-five die every year from lack of access to food and clean water. Solving this challenge is simple and cheap, no lockdown is necessary, and the world produces over 1 kilo of grain per person per day, not to speak of other food sources.

In fact, supplying food to the 820 million hungry in the world would rather stimulate than hamper the economy. No wonder so many are furious against politics in general, and voting for any demagogue spreading hate.

In Brazil, which had been taken out of the FAO world hunger map during the Lula governments, we are back to over 16 million people suffering from hunger, in a country which in 2019 produced over 3.5 kilos of grain per person per day. We do not lack food, we lack policies.

With a devalued Real, the traders in food commodities find it more interesting to export than to sell on the local market, leading to inflated prices of such staples as rice and beans, and more poverty. This in a country where the fallow land, used for rent accumulation, barely disguised as “extensive cattle farming,” is equivalent to five times the territory of Italy, 160 million hectares. There is no economic reason for poverty in Brazil.

Ladislau Dowbor is an economist, professor at the Pontifical Catholic University of São Paulo, and international consultant in development planning. His numerous books and technical studies are available free of charge (Creative Commons) at http://dowbor.org.

*Ladislau Dowbor‘s article was published in Wall Street International. Go to Original.