TOPICS > Economy

Brazil’s Economic Boom Marred by Social Inequalities

June 9, 2008 at 6:30 PM EST
Loading the player...
Brazil is on track to become an economic powerhouse in the 21st century, but gaping social inequalities still plague this country of 187 million. Simon Marks offers the first in a series of reports from Brazil on the country's economic and political scene.
LISTEN SEE PODCASTS

TRANSCRIPT

JUDY WOODRUFF: Brazil. Tonight, we begin a three-part series about that country’s booming economy and rising place on the global stage. NewsHour special correspondent Simon Marks reports on Brazil’s domestic challenges.

SIMON MARKS, NewsHour Special Correspondent: In Brazil today, the path out of poverty can begin with a wash and blow dry. In Pavaleras (ph), one of the poorest communities on the outskirts of Sao Paulo, a hole-in-the-wall beauty parlor represents opportunity for a mother and daughter.

The mother is 32-year-old Deise Duarte da Silva, and her life changed the day her daughter, 17-year-old Sylvia (ph), won a government-funded competition. The prize: a free visit to the dentist.

DEISE DUARTE DA SILVA, Hairdresser (through translator): When we got there, they were also offering a hair dressing course for free, so we registered for it. We did the course. And while we were finishing it, I was working as a house cleaner. Then I said, “Right, it’s time for me and my daughter to build our own beauty salon.” So that’s how this great opportunity started.

SIMON MARKS: The salon opened last December. After completing the training course, the da Silvas were given money by the government to purchase the equipment they needed to turn a vacant garage into what has now become something of a local social center.

DEISE DUARTE DE SILVA (through translator): At first, I started the business in my house, but then I rented the garage, and soon I hope to invest a little built more. Who knows? In a short time, we might have yet another person working with us.

Aiming to alleviate poverty

Debora Ribeiro
Store Clerk
I remember, when I was little, we had many problems. Now we don't. I know the economy has grown. My mother is better off, and poverty isn't as widespread as it used to be.

SIMON MARKS: For the past six years, alleviating poverty in the favelas, the shanty towns that exist on the lip of Brazil's major cities, has been the primary focus of the government of President Inacio Lula da Silva, himself a former shoe-shine boy with no formal education.

A government program called the Bolsa Familia puts government cash directly into the hands of 11 million of Brazil's poorest residents, provided their children remain enrolled in school. That is the only qualification for receiving the handout.

Brazilians can decide for themselves how they spend the money they receive from the government. And some make less good use of the cash than others.

Nevertheless, the government says the Bolsa Familia program and others like it are giving Brazil's poorest citizens a chance to raise themselves out of poverty.

ROBERTO MANGABEIRA UNGER, Minister of Strategic Affairs, Brazil: The country doesn't want charity; the country wants opportunity.

SIMON MARKS: Roberto Unger, a philosopher who teaches at Harvard, is the country's minister for strategic affairs.

ROBERTO MANGABEIRA UNGER: The most important social fact about Brazil in the last half-century is that we now have a new middle class coming from below of mixed race, dark skin, a people who struggle to build small businesses.

The great Brazilian revolution today would be for the government to give these people instruments and opportunities and to allow the majority to follow the example of this vanguard of emergent self-help entrepreneurs.

SIMON MARKS: It is undeniable that millions of people in this vast country, which occupies almost half the landmass of South America, are emerging from poverty.

Statistics show the economy is growing at its fastest rate for 20 years, thanks in large measure to the world's voracious appetite for Brazilian commodities. That is swelling the ranks of Brazil's middle-income earners, and fewer than 1.5 million people in this country of 186 million now earn less than $3,000 U.S. a year.

You can see the results at places like the Rio Sul Shopping Mall in Rio de Janeiro. It was the first of its kind when it opened back in 1981 and then was the preserve of the city's wealthy elites. Today, a wide range of Brazilians shop and work here, including some who travel into the city from the favelas on its outskirts.

DEBORA RIBEIRO, STORE CLERK (through translator): I remember, when I was little, we had many problems. Now we don't. I know the economy has grown. My mother is better off, and poverty isn't as widespread as it used to be.

Bureaucracy stifles businesses

Roberto Mangabeira Unger
Minister of Strategic Affairs, Brazil
What the nation now wants is a model of development based on a broadening of economic and educational opportunity. That requires us to do something that we have never learned to do: to re-imagine and to reconstruct our institutions.

SIMON MARKS: And yet the economic picture in Brazil is not entirely idyllic. Just yards from the beaches of Ipanema and Leblon in Rio, it's easy to find examples of Brazilians who remain frustrated by the country's pace of change.

CARLOS TAVARES, Surf Store Owner: I have one. I have 11 boards, 11 boards.

SIMON MARKS: Carlos Tavares is one of them. He runs a small surf shop, selling boards, the wax to polish them, waterproof clothing to wear on them, and all the other accessories used by the surfing fraternity. Going into business, he says, was a big decision.

CARLOS TAVARES (through translator): I did it because I wanted to. I thought it was the right moment to change my life and my parents' life.

SIMON MARKS: And just starting the business took months of patience. Bureaucracy in Brazil is so overwhelming, taxes so overbearing that Brazilian entrepreneurs speak of the cushdodo Brazil, the unique costs of doing business here that many say are an enormous drag on personal economic freedoms.

CARLOS TAVARES (through translator): It took a while, because I had to change the license from a bar to a surf shop. There's a huge bureaucracy here, so that alone took three months.

And then you have to register the business using your Social Security number. You go there every day in person. If you don't, nothing happens. So you show up, but there's always a detail missing.

I know many people who wanted to open businesses thinking it would be Disneyland, but they couldn't continue because they didn't know how hard it was going to be.

SIMON MARKS: In the mega city of Sao Paulo, Brazil's commercial capital, the skyline is dominated by skyscrapers, symbolizing the country's rise as one of the world's leading developing nations.

But there's also a clock that keeps a running tally of the government's tax take, an opposition-inspired reminder to the country's captains of industry that payroll taxes now run as high as 60 percent in a country where the average firm spends more than 100 days a year just processing its tax returns.

Government ministers acknowledge there's an enormous amount of work still to be done.

ROBERTO MANGABEIRA UNGER: What the nation now wants is a model of development based on a broadening of economic and educational opportunity. That requires us to do something that we have never learned to do: to re-imagine and to reconstruct our institutions.

Education, urban violence

Luis Silva
Director of Social Development, Embraer
We think that by creating a model which will serve these type of students -- I mean, the top echelon in terms of talent -- we are helping the public system to be renewed, to be reinvigorated, and to change.

SIMON MARKS: In some areas, the private sector is not waiting for government action. This school, about 50 miles south of Sao Paulo, is funded by the Brazilian aviation manufacturer Embraer.

The company says the public education system is in such disarray that it has enormous difficulty finding qualified graduates to hire, so it's gone into the education business, where 600 kids, aged between 15 and 18, come from the area's lower-income families and passed a rigorous test to win a place here.

LUIS SILVA, Director of Social Development, Embraer: We know very well that, by having 600 students in this school, we're not going to solve the education problems in Brazil.

SIMON MARKS: But, says Luis Silva, Embraer's director of social development, the private sector is trying to nudge the government into reforming the public school system.

LUIS SILVA: Six hundred is nothing. Brazil has 60 million students, OK?

But we think that by creating a model which will serve these type of students -- I mean, the top echelon in terms of talent -- we are helping the public system to be renewed, to be reinvigorated, and to change. It's a very grave, very serious problem we have in education in this country, and we won't solve the problem in 5 or 10 years, so it's a long-term thing.

SIMON MARKS: Also long-term, the task of combating Brazil's other major social problem: urban violence that has convulsed the country's largest cities.

Today, the Brazilian police are able to patrol Jadim Renieri (ph), home to around 50,000 people on the hard-scrabble outskirts of Sao Paulo, but it wasn't always like this.

Until eight years ago, this community in southern Sao Paulo was not just one of the most violent places in Brazil. With a murder rate of 100 deaths for every 100,000 people, it was one of the most violent places in the world.

After being afraid to walk the streets for two decades, community leaders decided enough was enough and, for the first time, they found support from the local police.

Backed by the region's authorities, a community police substation was opened in the heart of an area gripped by drug-related gang violence. Today, a neighborhood that was once a no-go area for police is routinely patrolled by them.

Officers are empowered to stop anyone on the streets whom they consider to be acting suspiciously. There's no warrant needed for a full-body search that includes scrutiny for gang-related tattoos.

Captain Gilberto da Silva heads the community policing effort and says the homicide rate here has dropped by 80 percent since the local police station opened.

CAPT. GILBERTO DA SILVA, Sao Paulo Police Department (through translator): The concept of community policing was first introduced to Sao Paulo 10 years ago, and now it takes place all over the state, and the crime rate falls everywhere that it's tried, not only here. Because of the coordination between community police, operational police, and tactical forces, fortunately, the crime rate is falling.

Changing political conversation

Capt. Gilberto da Silva
Sao Paolo Police Department
Before, this area was comparable with countries that were in the midst of a civil war. You could see in people's eyes how scared they were. Nowadays, it's different. People can go out at night.

SIMON MARKS: But that reference to tactical forces worries some in Brazil who argue that human rights are being trampled by a police force with a reputation for brutality and corruption.

"The Elite Squad" was one of the most popular movies in Brazil last year. It depicts a semi-fictional account of police life in Rio. The hero of the film, Captain Nascimento, commits violent acts of brutality in the city's favelas and goes unpunished for them.

His character has become something of a national hero among those in Brazil who simply want gang violence to end, whatever the civil liberties costs. And real police captains on the beat say the force is doing its best to help create stability in a rapidly developing country.

CAPT. GILBERTO DA SILVA (through translator): I would say that policing has a repressive aspect all over the world. But if the police, the government, the media, and corporations can all work together, you can have a very positive result.

Before, this area was comparable with countries that were in the midst of a civil war. You could see in people's eyes how scared they were. Nowadays, it's different. People can go out at night.

SIMON MARKS: Brazil's social and economic problems were once considered an indelible hallmark in a country still recovering from three decades of military rule.

But the government's decision to grapple with them has won it enormous popularity and has also forever changed the political conversation here. Opposition leaders say it is no longer possible to run for office in Brazil without a clear strategy for defeating poverty.

And so, in Sao Paulo, today's shoe-shiners celebrate a president who was once one of them.

We stopped to talk with Andre Roberto (ph). He's been shining shoes here for 43 years and now gives voice to street poetry celebrating the country's development.

"I am a Brazilian worker," he says, "working for the progress of the nation. Brazil is a beautiful country, like a flower growing in the garden. The stars are bright tonight. The sky is blue."

JUDY WOODRUFF: We'll have more from Simon tomorrow when he reports on Brazil's attempt to compete internationally.