Foto: Bernardo Rebello

“Brazil is still one of the world’s most unequal countries. Its murder rate rivals Mexico’s. Public health care is a lottery. Fewer thanhalf its pupils leave school fully literate. But it is no longer Belíndia. In the past quarter-century a better labour market and a basic social safety net have cut poverty by two-thirds. In the past decade the income of the poorest 10% of Brazilians has almost doubled in real terms, whereas that of the richest 10% has grown by less than a fifth. Brazil’s Gini coefficient, a measure that expresses income inequality, is at a 50-year low. But “there is a sense in which Brazil is still Belíndia,” says Marcelo Neri, the president of IPEA, a government-funded think-tank: ‘A rich country that’s growing like Belgium—that is, slowly—and a poor one that’s growing fast, like India.’” (The Economist, September 28th 2013)

It is often said that Brazil is a country of paradoxes. Economically speaking, the pace of development has never been equal in all Brazilian regions, and there are many states where modernity and extreme poverty coexist side by side. In fact, Brazil was once labeled as “Belíndia”, a place where both the wealth of Belgium and the poverty of India can be found. According to the Brazilian economist Edmar Bacha, who created the word Belíndia in the 1970s, this concept refers primarily to income inequality. More recently, other types of Belíndia have been identified in Brazil as well. One of them is that of Marcelo Neri, the president of IPEA, a government-funded think-tank. In his view, there are two speeds of growth in the present Brazilian economy, one as slow as Belgium’s and a second as fast as India’s. Although the two Belíndias seem to concern different topics, the picture described by Neri only became possible because Brazil has been tackling the problems previously denounced by Bacha.

Despite dating back to the 1970s, Bacha’s Belíndia is a concept that remains accurate to describe two sorts of challenges currently facing Brazil. First, society is still very unequal, as those at the top of the income scale are still a tiny minority. Taking into consideration that Brazil is the sixth most populous country in the world, the metaphor of a small Belgium and a huge India is still representative of the country’s inequality. Second, Brazil’s infrastructure problems are quite similar to those existing in India, but the elites who pretend to live as though they were in Belgium simply do not seem aware of that. For instance, they do not take crowded buses every morning, their sewage systems work well and the private hospitals they go to increasingly look like elegant shopping centers.

However, it is important to underscore that other aspects of Bacha’s concept do not apply to Brazil’s context any longer. For instance, public policies concerning income distribution have changed dramatically in recent decades, resulting in a completely different situation than that of the 1970s. During Brazil’s military dictatorship (1964-1985), economic growth depended heavily on income concentration, as fast industrialization required businessmen rich enough to partner with the State in costly enterprises. In the 21st century, a whole new paradigm for economic development has appeared. Income distribution is now playing a key part in bolstering Brazil’s domestic market, a policy whose benefits became evident in 2010, when the country rapidly recovered from the world economic crisis.

Even so, for a country as complex as Brazil, economic progress may never be a straightforward march. Four years after announcing that the country was “taking off”, The Economist newspaper modified its view with another headline, which asks the following: “has Brazil blown it?”. The article correctly points out that such pressing problems as excessive public spending, high taxes, precarious infrastructure and corruption are among the main
reasons why Brazil’s growth has slowed. Although not disagreeing entirely with the text,Marcelo Neri has creatively retorted that the idea of Belíndia remains valid to explain Brazil’ssluggish growth. In his words, Brazil is both a “rich country that’s growing like Belgium—thatis, slowly—and a poor one that’s growing fast, like India”. By adapting Bacha’s catchy word to a new context, Neri wants to underscore/ highlight the dynamism of Brazil’s domestic market, especially the part of it depending on consumption by the middle class.

Thanks the 21st-century policies of income distribution and despite the structural economic problems that the country still faces, Brazil is no longer Bacha’s Belíndia. Yet, it is not a rapidly-growing emerging economy of the Asian type either. In order to achieve a more sustainable pace of development in the near future, Neri’s point must not be missed: the decrease in inequality has given birth to a new middle class, the size of which is metaphorically comparable to India. Hopefully and with the appropriate incentives, this may be the first sign of a more innovative and entrepreneurial private sector for Brazil.