Colonial Consequences

The history of Brazil's economic demise.

by Karen Correa

      With vast resources and a low people to land ratio, Brazil has the necessary ingredients for a prosperous country. Instead, Brazil has exported most of its vast and valuable resources and has had to import what it could have produced from other countries at great cost and detriment to its people. As if that weren't enough to cripple an economy, Brazil is also saddled with a lack of capital, extreme stratification of the classes and the slow-in-coming, hardly active middle class. All of these problems have been present in Brazil since its origins, yet elected officials and the masses alike are virtually unable to effect change. The conquest of the land by the Portuguese in 1500 set a precedent of outside control and impeded the creation of a strong national identity. Indeed, if it were not for Pelé, Brazilian identity would still be virtually unidentifiable. With the recent elections and economic worry on both domestic and international levels, the economy's history is a good lens through which to gauge the likelihood of future progress
     Pedro Alvares Cabral claimed Brazil for Portugal in 1500. The Portuguese set up camp and stayed until the end of the 1700's, subjugating the natives and acting with the usual conquistadorial aplomb. During the late 1700's, dissenters met to complain about the Portuguese and discuss various ways of overthrowing their oppressors. Never having made it past the initial venting stage, they were arrested for conspiracy in 1792. One member, the infamous Tiradentes (the Toothpuller), was sentenced to death, becoming a national martyr, despite the fact that his only action was complaining. Unfortunately for the Portuguese, their economic complaints did not end; the economy had already slipped into the slump that would last until the present day.
     The early leaders organized agricultural production around a system of monoculture. That is, they designated one farmer to cultivate the total yearly output of a crop, thus cutting off competition and any other means of internal production. Likewise, farmers were not allowed to choose which crops to grow.
     As if monoculture didn't depress the means of production enough, the virtual worthlessness of exports and high cost of imports created little incentive for further production. Brazilians paid high prices for necessities bought from foreign markets instead of manufacturing and consuming products made in the country with their own raw materials. The slow but steady degradation of economic potential prohibited communication and transportation advances, as well as an expansion of the educational system.
     Around 1800 Napoleon invaded Portugal, forcing the royal family to flee to Brazil. Joao VI, prince regent, moved to Rio de Janeiro, ending the restrictions and monopolies that had seemed swell while ruling from thousands of miles away, but hard to justify when living in the country. Ports were finally opened and the hope of economic independence grew strong. He also allowed the country to begin manufacturing, where previously it had only been plundered for raw materials. Thanks to Napoleon's unwitting intervention, Brazil was finally allowed to behave like a country rather than a gigantic natural resource surplus for Portugal. Despite his many failings, Joao did establish useful institutions during this time. Brazil was raised to the status of a kingdom in 1815 and Joao ruled a dual monarchy when he ascended the Portuguese throne the next year. The end of the Napoleanic wars however, demanded his return to Portugal, so he left young Prince Pedro to take the reigns when he came of age.
     Jose Bonifacio, a Brazilian, began severing the ties to Portugal once Joao was gone. When little Pedro was able, he declared independence on September 7th, 1822. Despite this well applauded move by Pedro (now Emperor Pedro) he was not doing well with the assembly: the legislature and executive branches rarely agreed on any course of action. Rather than deal with any kind of compromise, Pedro disbanded the assembly. This sort of democratic maneuvering and ability to work well with others can still be observed in Brazilian politics today. Although Portugal finally came around to recognizing Brazil in 1825, Pedro was unable to take the stress and promptly abdicated. He hopped the first boat to Europe, leaving behind a short letter and his 5-year-old son, also Pedro, to deal with the mess. Brazil was finally left to the Brazilians­since it appeared that nobody else wanted to deal with it.
     In 1840, fourteen-year-old Pedro was proclaimed of age and set to rule, Brazil was seething with riots. People had begun to think seriously about how the country had ended up in such an economic mess and were worried about its ever-increasing problems. Namely, the lack of a place for the emerging middle classes, large landholdings that wasted land and did not produce to their potential, and the subsequent lack of agricultural growth. One progressive Brazilian, the Viscount of Maua, tried to establish credit banking, but the idea was too radical for the time and failed miserably. Independent projects were almost unheard of, since the government provided everything and obtaining grants was very difficult.
     In 1889 Deodoro Fonesca united the army and the Republicans, who were looking to end monarchical rule. Together, they occupied the government and ended the reign of the Empire. Pedro II promptly left for Europe. Soon, the production of coffee and rubber took off. Things looked good, despite the constant class struggles. But with such a fragile economic structure- national credit, debt and the value of the currency constantly shifting- it couldn't last. The Brazilian reliance on monoculture, continues today and means that they still import the majority of their manufactured goods.
     A revolution in 1930 carried Getulio Vargas to power and created the Estado Novo. For a short time at least, industrialism increased and nationalism was on the rise. In 1954 he committed suicide. In 1961 Janio Quadros was elected president and like his many predecessors relinquished the reigns of power eight months later. This merry-go-round of helmsmen continued for years, with inept, overly militaristic, and corrupt leaders all taking a hand in the continual degradation of the Brazilian economy and political situation. The military dictatorship ended in 1985.
     Currently, the politicians take strides to seem legitimate while at the same time attempting to reach the fun-oriented and politically wary Brazilian populace. It is not uncommon to see street corners infested with flag-waving devotees, or a political candidate's double-decker bus bearing campaign slogans such as "A Vote For Liberty" on the side while drag queens dance to Led Zeppelin on top. If past history is any indication of future performance however, we can't really be surprised. If one of these flag waving, Led Zeppelin-loving representatives is able to effect economic change in a country with a history like Brazil's, it will be a welcome miracle.
     President Henrique Cardoso was re-elected in the current elections and is now expected to carry out his promised economic measures. After $30 billion in foreign reserves recently left the country for more stable economies, the bailout package from the International Monetary Fund will only be offered if there is evidence of Cardoso's proposed changes. Among other problems that Cardoso and his economic reform face, there is a 40 percent drop in the Sao Paulo stock market this year the a government that has been unable to reign in spending, thereby crippling the new currency. Unemployment is currently the highest it has been in 15 years. All of this is happening in a nation of 160 million people, of whom nearly 70 percent have less than an elementary school education and 35 percent are barely literate. In addition, Brazil's income distribution is the most unequal in the world, with the richest 10 percent of the population hoarding 50 percent of the wealth. These statistics are frightening, but not unexpected in view of Brazil's complicated economic and governmental history. It is hard to tell if Cardoso will be able to accomplish what he has promised and what Brazil desperately needs. At any rate, if the economy never actually recovers from the past four centuries of damage, the Brazilians will at least be well entertained and not unused to the disappointment.

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