Brazil: Boom, Bubble or Doom

Brazil: Boom, Bubble or Doom?
15 October 2011, M. Zammit

In recent years Brazil's role in the world stage as a potential economic and
political superpower has been the subject of much discussion.
In fact, ever since the sensational acronym "BRIC" was coined by Goldman
Sachs to denote the economic potential of Brazil, Russia, India and China,
academics and analysts, as well as businessmen and government officials,
have had their eyes on all four emerging markets, and several have placed
their bets on Brazil. As a result, foreign investment has poured into the
country in an unprecedented fashion; world leaders have passed glowing
accolades and paid honour to their "new global partner"; and every nation and
organisation has endeavored to re-enforce its relations with Brazil in
anticipation to its rising economic and political clout.

Unfounded Euphoria
The question yet remains whether the euphoria around the speculations and
predictions for Brazil matches reality. Many skeptics have argued that the
hype is unwarranted. Undeniably, there are problems in Brazil that are woven
into the economic, political and social fabric of the country.
Poverty, crime and education
With 16,2 million people living in extreme poverty (IBGE 2011 est.), and more
struggling to get by, it is not surprising that crime has also soared to epidemic
levels. The homicide rate alone is as high as 22.7 homicides per 100,000
inhabitants (UNODC 2011 est.), the third highest in South America. Trapped
in a vicious circle that is hard to break, poverty and crime are often fuelled by
the shortcomings of a welfare system that is under increasing pressure to
offer good-quality primary education. Brazil well-known "Bolsa Família" (family
allowance), which operates under the "Fome Zero" (Zero Hunger) network,
opeartes by giving financial aid to poor families on condition that their children
attend school. But schools remain underfunded and the quality of education
remains poor....