Brazil’s Success

May 28, 2009 Editorial

The current dispute over whether the Takutu Bridge to Brazil is officially open or not seems to symbolise the relationship with our huge neighbour to the south. To anyone looking at Guyana’s location on a globe it would be the most natural assumption to make that our relations are seamlessly integrated on account of the extensive border we share between identical rolling savannahs.

We can blame it on history – we were ruled by Britain and relations were directed northwards – or on demographics – our population resides overwhelmingly on the Atlantic Ocean – but the fact of the matter is that we have never really connected either as states or as peoples.

And this is really a shame given our histories and our needs. Brazil is the only one of our continental neighbours that does not have any claim to our territories: our borders were demarcated during colonial times and Brazil has never raised a squeak about them. The indigenous Amerindians that populate the contiguous savannahs have been allowed to cross-unhindered so that family ties can be maintained.
And last but not least there has been the development of Brazil into a budding global power over the last few decades that offer us a great opportunity to cooperate for our mutual future development.

And we do not have just the economic opportunities in mind: Brazil shares a very similar political past with us and it should be of interest to our leaders how they have moved on to create a quite vibrant democracy as well as economy. From the mid-sixties to the mid- eighties Brazil and Guyana both suffered under very authoritarian state structures, which were only ended by citizen mobilization that demanded a return to democracy. The new democratic governments (in Guyana after 1992) both attempted to stabilize their economies and even though both were leftist (from 2002 in Brazil) they retained neo-liberal structures even as they broadened social services to assist their poor.

But Brazil has come out of its authoritarian past as one of the stellar “emerging economies” – that are expected to pull the world out of the current economic depression – even though it has conceded that its GDP growth for this year may only be between 0 and two per cent. It has built a very healthy fiscal surplus that has translated into just as healthy foreign reserves that lend confidence to investors that Guyana can more than ride out the tide.

As a member of the BRIC quartet (Brazil, Russia, India and China) it has taken the leading role to reorient world trade towards a greater South-South direction in an effort to break the old neo-colonial patterns.
Taking a much more pragmatic course of action than other leftist leaders in the region, Brazil’s President Lula has cooperated with the US in the foreign policy arena even while challenging that country on matters of trade policy. Brazil has made it clear that it intends to get its economic house in order as a matter of overriding policy.

In so doing, it has been able to expend a much smaller portion of its GDP on defence and allowed it to continue with its deep social programmes. President Lula has consequently emerged with much greater credibility than President Chavez of Venezuela who seems determined to challenge the US strategic premises in this hemisphere – and elsewhere. But if in most of its policies our government has marched in step with Brazil why have we not had the success that the latter has secured in economic growth? What gives? It is our considered opinion that the best lesson we can take from Brazil is the refusal of Brazil’s democratic leaders (even those that preceded the leftist Lula) to completely abandon the role of the state in taking a direct role to foster development.

The government, for instance, continued with state-owned banks that offered cheaper funds for targeted sectors of the economy as well as giving the poor a stake by offering them a higher than commercial return in an investment pool.