CHANGING CULTURES IN LATIN AMERICA WELLINGTON, NEW ZEALAND SEPTEMBER 26, 2008

Transcription

1 CHANGING CULTURES IN LATIN AMERICA WELLINGTON, NEW ZEALAND SEPTEMBER 26, 2008

2 GOVERNING BRAZIL LESSONS AND CHALLENGES JOÃO PAULO M. PEIXOTO PROFESSOR OF GOVERNMENT UNIVERSITY OF BRASILIA

3 BRAZIL IN THE WORLD

4 B R A Z I L

5 BRAZIL IN NUMBERS an introduction

6 BRAZIL IN NUMBERS Population: mil (+half of SA) Size: sq km (n/half of SA) GDP (PPP): $1.836 trillion (+half of SA) GDP (PPP): per capita $9,700 GDP Growth Rate: 5.4% (est.) Exports: $160,6 billion (f.o.b.) Imports: $120,6 billion (f.o.b.) Budget: $244 billion

7 BRAZIL IN NUMBERS PUBLIC DEBT: 45.1% GDP CURRENCY: BRL$1,8 to $1,00 INFLATION RATE: 3.6% (est.) THREE MAIN EXPORT PARTNERS U.S.: 14.4% CHINA: 9.2% ARGENTINA: 8.3%

8 BRAZIL IN NUMBERS Labor force: million (2007 est.) Labor force - by occupation: agriculture: 20% industry: 14% services: 66% (2003 est.) Unemployment rate: 9.3% (2007 est.) Population below poverty line: 31% (2005)

9 BRAZIL IN NUMBERS IMPORT COMMODITIES MACHINERY, ELETRICAL AND TRANSPORT EQUIPMENTS, CHEMICAL PRODUCTS, OIL, AUTOMOTIVE PARTS AND ELETROCNICS

10 BRAZIL IN NUMBERS THREE MAIN IMPORT PARTNERS: U.S.: 20% CHINA: 8.9% ARGENTINA:8.1% RESERVES OF EXCHANGE AND GOLD: $200 BILLIONS (2007)

11 BRAZIL IN NUMBERS EXPORT COMMODITIES, TRANSPORT EQUIPMENTS,IRON ORE, SOYBEANS,FOOTWEAR,COFFEE, AIRPLANES AND AUTOS

12 CULTURAL, ETHNIC, BACKGROUND LANGUAGE PORTUGUESE ETHNIC GROUPS WHITE: 53.7% MULLATO (mixed white and black): 38.5% BLACK: 6.2% OTHERS (include Japanese, Arab, Ameridian): 0.9%

13 BRAZIL POLITICAL GOVERNMENT TYPE FEDERAL REPUBLIC PRESIDENTIAL ADMINISTRATIVE DIVISIONS 26 STATES AND 1 FEDERAL DISTRICT CAPITAL BRASILIA

14 LEGISLATIVE BRANCH BICAMERAL NATIONAL CONGRESS FEDERAL SENATE 81 Senators 3 members from each state and Federal District elected to serve eight-years term. One third and two thirds elected every for years

15 LEGISLATIVE BRANCH CHAMBER OF DEPUTIES 513 seats MEMBERS ELECTED TO SERVE FOUR YEARS 4 MAJOR POLITICAL PARTIES PMDB,PT,PSDB,DEMOCRATS

16 JUDICIAL BRANCH SUPREME FEDERAL TRIBUNAL 11 MINISTERS APPOINTED BY THE PRESIDENT OF THE REPUBLIC HIGHER TRIBUNAL OF JUSTICE REGIONAL, FEDERAL, TRIBUNALS

17 POLITICAL EVOLUTION 1500 DISCOVERED BY THE PORTUGUESE 1500 to 1822 PORTUGUESE COLONY 1822 INDEPENDENCE 1822 to 1889 EMPIRE (UNIQUE IN L.A.) 1889 REPUBLIC 1930 MODERN BRAZIL

18 MAIN PHASES OF THE BRAZILIAN STATE (since 1930) The golden years: from the keynesianism of 30 s to the quasiliberalism of the 90 s. Vargas Era Military Regime Collor and the Washington Consensus FHC Era Lula s Administration

19 EVOLUTION OF THE BRAZILIAN STATE (from 1822 to 1945) Brazilian State From 1822 to 1889 From 1889 to 1937 From 1937 to 1945 Government Strucure Monarchy Republic Republic State Structure Unitary Federal Unitary in practice, Federal in theory Synthesis elaborated by the author Political Regime Type of Constitution Government System Limited Democracy Pre-constitutional 1822 to 1824 and Constitutional 1824 to 1889 Limited Parliamentary Limited Democracy Provisory Government 1889 to 1891 and Constitutional 1891 to 1930 Provisory Government 1930 to 1934 and Constitutional 1934 to 1937 Dictatorship 1937 to 1945 Presidential Dictatorship Dictatorship Presidential

20 EVOLUTION OF THE BRAZILIAN STATE (from 1946 to 2008) Brazilian State From 1946 to 1964 From 1964 to 1985 From 1985 until today Government Strucure Republic Republic Republic State Structure Federal Federal Federal Synthesis elaborated by the author Political Regime Type of Constitution Government System Liberal Democracy Constitutional Presidential 1946 to 1961 Parliamentary 1961 to 1963 Presidential since 1963 Authoritarian Constitutional Presidential Democracy Constitutional Presidential

21 POLITICAL AND ECONOMIC FEATURES OF CONTEMPORARY BRAZIL: Period Administration Features Getúlio Vargas Industrialization, Public Sector Modernization, State Intervention in the Economy Gaspar Dutra Economic Liberalization, Redemocratization, Currency Crises Getúlio Vargas Nationalism, Populism, Statism Synthesis elaborated by the author Juscelino Kubitschek Development with Inflation, Plano de Metas, New Capital Jânio Quadros João Goulart Castelo Branco, Costa e Silva, Emílio Médici, Ernesto Geisel, João Batista Figueiredo Right and Left Wing Populism, Structural Reforms, Parliamentary System, Planning Nationalism, Structural Reforms, Economic and Administrative Modernization, Ideology of National Security and Development, External Debt

22 POLITICAL AND ECONOMICAL FEATURES OF CONTEMPORARY BRAZIL : Synthesis elaborated by the author Period Administration Features José Sarney New Republic, Constitution of 1988, Economic Nationalism, High Inflation, Plano Cruzado Fernando Collor Economic Reforms, Neoliberalism, Public Sector Reform, Impeachment, Privatizations Itamar Franco Plano Real, Statism Fernando Henrique Cardoso Plano Real, Economic Stabilization, Structural Reforms, State Modernization, Privatization, Re-election Luiz Inácio Lula da Silva Economic Stability, Populism, Statism and Democratic Left

23 SEVEN CONSTITUTIONS OF BRAZIL Length 1824 to 1891 Observations Empire, the one that lasted more Lasted for 67 years 1891 to 1934 First Republican Constitution 43 years 1934 to 1937 The one that lasted less 3 years Synthesis elaborated by the author 1937 to 1945 New State 8 years 1946 to 1967 Liberal 21 years 1967 to on The Constitution of the Military Regime Constitution of the New Republic, emphasis at Economic Nationalism, Pro - State and Progressive on Social issues 21 years

24 THE VARGAS ERA Institution Building Reforms Administrative Labor Trade Unions Fiscal/Tax Political Objectives Public Sector Modernization, DASP, Careers, Merit System, Scientific Administration Weber First Legislation Labor Code and Courts Pluralism and Autonomy Flexibility Electoral Code and Court Industrialization Economic Nationalism (CSN BNDES PETROBRAS)

25 JOÃO GOULART ADMINISTRATION REFORMAS DE BASE ( ) REFORMS Agrarian Reform Urban Reform BankingReform Electoral Reform Foreign Capital Reform Educational and University Reform Tax Reform OBJECTIVES Redistribution of land, creating numerous classes of small owners. Planning and regulations for city development. Creation of a financial system dedicated to attend national needs. Allow the iliterate to vote (about half the adult population) as well as the military. Regulation and control of foreign investment and profit/capital flow. Teaching and research alligned with national interests and social needs. Emphasis on collecting direct taxes, such as the progressive income tax.

26 MILITARY REGIME ( ) Conservative Modernization REFORMS Agrarian Reform Education Reform Tax/Fiscal Reform OBJECTIVES Land Statute, rural settling and colonization. Structural and educational reforms in the three levels of the system. Modernizing the tax/fiscal systems, creation of new taxes, and redistribution of the income tax. Administrative Reform Public Sector modernization, deburocratization, administrative reorganization. Economic Reform Judiciary Reform Political Reform Economic stabilization, business liberalization, financial system reform. Modernization of the Judiciary system. Two party system and indirect elections.

27 REFORMS IN THE COLLOR ADMINISTRATION ( ) Globalization and Neoliberalism REFORMS Economic Reforms Tax/Fiscal Reform Public Sector Reform Higher Education Reform Union and Labour Reform Agrarian Reform Social Security Reform OBJECTIVES Economic modernization, privatization and business liberalization Simplification and consolidation of indirect taxes, modernize and simplification of the collection and the auditing by the Revenue Service (RF), tax/fiscal system reform. Review of the stability of public servants, careers structure, rationalize the public expenditures and salaries, de-regulation and administrative reorganization. Review of Higher Education and regulation of the university s autonomy. End State tutelage, flex the labor laws. Review of the ITR, encourage rural settling. Pension reform, revenue system.

28 FHC ADMINISTRATION ( ) Quase-Liberalism REFORMS Economic Reform State Reform Agrarian Reform Tax/Fiscal Reform Social security Reform Political Reform Judiciary Reform OBJECTIVES End of State monopolies, economic stability, fiscal adjustment, privatization, public service concessions. Regulatory agencies, administrative reform and reorganization, fiscal responsability law (New Zealand). Rural settling. Review of the tax system. Review of the public sector s pension system. Electoral system, reelection, party system. Modernization of the Judiciary.

29 FHC ADMINISTRATION LEGACY Structural Reforms International Presence Presidential Diplomacy Economic Stability

30 LULA ADMINISTRATION CHALLENGES Govern Efficiently at the Federal Level - Control the PT and its Ideology - Maintain Economic Stability - Implement the Social Agenda - Promote Sustainable Development - Carry on the Reform Agenda

31 Lula Administration An Administration of Programmes NOT An Administration of Reforms

32 Unfinished Reforms ACTION Social Security Reform OBJECTIVE Reduce social security deficit Fiscal and Tax Reform Labor Reform Reduce the costs on production and wages. Simplify the system by creating a IVA Tax charged from the final consumer, instead of the great amount of taxes that exists today. Flexibility on the labor relations and reduction of labor costs for the companies. Bureaucratic Simplification Improve business environment and citizenship Poltical Reform Strengthen the parties trough party loyalty, public financing of the campaigns, discussions over the improvement of politicians links to their constituencies (districts) and party list system.

33 State versus Market Market State

34 TENDENCY FOR MARKET SERVICES FOR THE RICH (MIDDLE CLASS) PUBLIC SERVICES FOR THE POOR (LOWER CLASSES)

35 Some obstacles for Growth Public Services Infrastructure Unefficient public services as health, education, public safety and justice. Precariousness of infrastructure in transportation, energy, ports and sanitation.

36 THE BACKWARDNESS EQUATION The reasons for small growth in Brazil - % of the GNP The government raises taxes , , spends more to sustain the administrative apparatus , , , , , ,8...and invests less and less , , , , , ,5 Source: Ministério do Planejamento e Fazenda, IBGE, Banco Central. Elaboração Raul Velloso

37 Perceptions of Obstacles to Growth Brazil Source: World Bank, Investment Climate Survey, 2003

38 Labor Regulations as an Obstacle for Growth Source: World Bank, Investment Climate Survey

39 International Comparison of Days Needed to Start a Business Source: Doing Business 2004

40 Topics for the Future Strengthen citizenship Improve the quality of essential public services (education; health and public safety) Reduce bureaucracy Implement necessary reforms More Society, less State

41 B R A Z I L What must be done is common sense The failure remains at the implementation level

42 THANK YOU AKU MIHI NUI KI A KOE JPMP@UNB.BR

43 BRAZIL: HISTORICAL DATES