Sunday, August 07, 2011

Brazil: a country of the present

The July 20 cover of the Brazilian news magazine Veja.
A rough translation: "Taxes, currency exchange, the abundance of credit, oligopolies and consumer optimism combine to make Brazil one of the most expensive countries in the world."
Janet and I have been tourists in expensive places before.  Paris, and Scandanavia in 2007 (especially Iceland) come to mind.  Brazil was never like this.  Prices vary.  Electronics (which are made locally) are cheap and I bought a headset for Skype with only 10 reais (about $6.30), but we paid an amount that I am not willing to admit for a book ("War and Peace," in Portuguese. Janet says that Portuguese is much better suited for Tolstoy than English, and she can tell you why).  What mattered the most to us, as tourists, was the cost of eating out, and that was very high.  My credit card statement says that we spent $85 on dinner for two at the Canto do Peixada in Manauas and $118 at the Remanso do Peixe in Belem.  Those are great restaurants, and I recommend that you do the same if you are in those cities.  What grates is spending $40 or even $50 for what is basically cafeteria food (which we also did).

It was no surprise to read in the Economist, on my return, that Brazil is one of the most expensive countries in the world according to their big mac index, and the most expensive if one corrects for per capita GDP.  The story appeared in the July 30 issue and is here.

What might be more surprising to some is that the restaurants I mentioned were crowded.  There are lots of Brazilians with money to spend, and statistics bear this out.  Not only have tens of millions of Brazilians moved into the middle class in the last ten years, resulting in an increase of over 40% increase in that category, but the number of wealthy in Brazil has similarly grown.  Republican policies (most significantly, the Bush tax cuts) in the US have proven that trickle down does not work (it doesn't even happen; CEO pay has now almost fully recovered since the 2008 recession, but that is apparently doing nothing to stimulate the rest of the economy).  Brazil demonstrates the opposite.  Programs such as the "bolsa familia" have put money into the hands of the poor and that has resulted in a gushing upwards of living standards.
We visited Brazil during their school vacation.  The plane that I flew on traveling back to the US was full of students on their way to spend a week at Disney World.  They all had stylish clothes and cell phones and looked a lot like American high school kids on a trip to visit DC (something I see a lot, living here).  Travel within Brazil is booming and tourist sites such as the opera house in Manaus were crowded with Brazilians visiting from elsewhere in the country.
Coming back to DC, I was struck by the contrast.  I arrived as the party of Herbert Hoover was holding the US economy hostage, and all talk of economics has focused on the negative. No one here seems optimistic, and there is no talk of an overheated economy.
A school in the flooded forest of Amazonas, complete with satellite dish for internet.
The cornerstones of democracy (and, indirectly, capitalism) are education and the open exchange of ideas. When we were in Brazil, the television often featured debates about what to do about the overheated economy.  I was struck by the idea that the excessive Brazilian politeness that had always seemed to be artificial, and to slow everything down, might be truly useful.  As speakers acknowledged the value of each other's opinion before offering their own, I got the sense that they were working towards an understanding of the best way forward.  In contrast, here in the US, political debate is all acrimony.  "My way or the highway."

Brazil still has many problems, including corruption and an entrenched poverty, but perhaps the US can learn something from Brazil about democracy and the market economy.

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