I want help to understand this article. How it deals with the sources of economic growth and evaluation of how Brazil has been performing over the las ten years in improving the ability of its citizens to achieve a better life for themselves and their families. How Brazil's rankings have changed on the United Nations Human Development Index.

Brazil Essay cline, a diminished international profile and fierce political conflict exemplified by Missing the samba beat an ill-tempered presidential contest. The campaign will culminate in a run-off on October 30th between Mr Bolsonaro, a hard-right populist, and Luiz Inacio Lula withagre culthe da Silva of the leftist Workers' Party (PT). When de-industrialisation began in the RIO DE JANEIRO AND SAO PAULO The next president will face a big, tricky in-tray 1990s, it coincided with the opening and modernisation of the economy. Some of ITEMMED IN BY houses on one side and facturing now accounts for just 10% of the the factories that shut had been protected 1 the Anchieta highway to the coast on country's GDP, down from 15% in 2004 and by tariffs and import prohibitions, and the other, the Mercedes Benz factory in Sao 26% in 1993. In contrast, revenues from were inefficient. The Real Plan of 1993, Bernardo, a suburb of Sao Paulo, is the agribusiness, broadly defined, now repre- which involved a new currency and fiscal company's biggest assembly plant for sent 28% of the economy, according to cal- reform, ended four decades of high infla- trucks outside Germany. Founded in 1956, culations by the University of Sao Paulo. tion, the consequence of the distortions it is being modernised. As a result, it plans That is a success story. Brazil has become accumulated under "national develop- to almost halve its workforce of 7,400, the world's third-biggest exporter of agri- mentalism", the ugly jargon for a policy of mainly by outsourcing parts of its opera- cultural products, behind the United States state-promoted industrialisation. It gave a tions. For Mercedes, this is part of a global and the European Union, with shipments renewed boost to the economy. Poverty be- strategy. For Sao Bernardo, the heartland of worth $125bn last year. Productivity in Bra- gan to fall and income gaps to narrow. Brazil's car industry, it is a body blow. zilian agribusiness is growing at 3% a year, Fernando Henrique Cardoso, the presi- In 2019 Ford shut its factory, next door compared with 0.5% for services and zero dent from 1995 to 2003, liked to say that to Mercedes, with the loss of 2,700 jobs. for manufacturing, says Marcos Jank of In- Brazil had found "a sense of direction" Toyota has gone too. A decade ago the sper, a business school. again. That progress continued under Lula, metalworkers union based in Sao Bernardo This structural shift has political, cul- who governed from 2003 to 2011. By zou1 the represented 108,000 members. Now that tural and foreign-policy implications. But country boasted the world's sixth-largest figure is 70,000, says Moises Selerges, its it is taking place in a context of overall de- economy. He promoted Brazil on the world president. "This government doesn't have stage, symbolised by the country's playing a policy for industry," he laments of Jair Bolsonaro, Brazil's president. "Its policy is Also in this section host to the 2014 World Cup and the 2016 Olympics in Rio de Janeiro. to cut down trees and plant soyabeans." 28 Haiti's worsening condition Some critics say the turning-point The union's woes illustrate one side of a dramatic shift in Brazil's economy. Manu- Bello is away came in Lula's second term, when he gave up on reforming the economy and the pub-> lic administration, preferring to expand himself convicted of corruption, and spent the state and surf a commodity boom 19 months in jail, before his sentence was which included big, new offshore-oil dis- annulled by the Supreme Court in 2019. coveries. Others put their finger on the There are signs that Lula knows that election of 2014, when Dilma Rousseff, Lu- there can be no return to "national devel- la's chosen successor and a more dogmatic opmentalism". Ms Rousseff's attempt to re- leftist, spent her way to a second term, only vive it, by raising tariffs and coddling priv- for the economy to slump a year later. Over ate-sector "national champions", merely the past ten years economic growth in Bra- accelerated de-industrialisation. Lula has zil has averaged just 0.3% a year, less than_ opposed privatisations. But he would not half the rate of population growth. (see reverse them. He "is not talking about chart1). Poverty is rising and income distri- making the state bigger but improving its bution is getting more uneven in an econ- quality", says Gabriel Galipolo, an econo- omy that is now just twelfth-biggest in the mist who is advising him. A Lula govern- world. The rest of the economy is not pro- ment would promote private investment viding alternatives for those well-paid jobs in infrastructure, says Mr Galipolo. being lost in industry. Brazil is "big enough to have every- Brazil seems to have lost its way. Mr Bol- thing, including manufacturing, argues sonaro is both a consequence and a further Arminio Fraga, who ran the Central Bank cause of all these changes. A core source of under Mr Cardoso. But getting back on a his support is in agribusiness. In the elec- track of faster growth with a changed eco- tion's first round, he swept the centre-west nomic structure requires reforms, Three and the states of Sao Paulo and Parana, the things stand out: education and training, heartlands of commercial farming. His reform of the state and the budget, and bet- culture war against the left is a symptom of ter environmental policy. a country divided against itself. Sertanejo, For the first 160 years or so of its life as or Brazilian country music beloved of con- an independent country Brazil neglected servatives, is booming. Farmers have education. In 1980 the average worker had bought radio stations in Sao Paulo state less than four years of schooling. That per- and samba artists are now rarely aired, iod had more than doubled, to 9.3 years, by notes Miguel Lago, a political scientist. 2018, according to the statistics institute. Mr Bolsonaro and his economy minis- But quality remains a problem. In the PISA ter, Paulo Guedes, claim to want to boost standardised international tests in 2018 the economy by shrinking the state. But Brazil ranked 66th out of 77 countries. Bra- they did relatively little of this beyond zilian 15-year-olds lagged behind on read- partly privatising electricity generation ing, science and especially maths. Im- and allowing private investment in water provement seems to have stopped in 2009. and sewerage. Their manifesto for a second Mr Bolsonaro handed the education term includes more privatisation, an at- ministry over to people linked to evangeli- tack on bureaucracy and pledging invest- cal Protestant churches, another core part ment to digitise public administration. of his support base. They have been more Lula in some ways represents the older, interested in incorporating conservative industrial Brazil. He first came to promi- values in the curriculum than in improv- nence during a military government in the ing quality, and have cut budgets. The pres- late-1970s as a strike leader of the Sao Ber- ident also scorns science, as his denial of nardo union. But he, too, has become a di- the gravity of covid-19 and of climate visive figure, adored by poorer Brazilians change have highlighted. Similarly, voca- as a symbol of social justice and abhorred tional training has been neglected. There is by others for the large-scale corruption a shortage of places, and courses tend to be that flourished under the PT's rule. He was geared to an industrial economy. precitu A more diverse economy needs a more Don't belies agile government. "The Brazilian state is Falling behind profoundly incompetent," notes Andre La- GDP, % change on a year earlier ra Resende, an economist who previously 9 served in Mr Cardoso's government. Ad- ministrative reform has been a pending as- Brazil 6 signment since those days. So, too, is tax reform. Mr Selerges, the union president, World 3 complains that manufacturing is more heavily taxed than are services. 0 The state's problems are partly fiscal. Public spending is close to 40% of GDP. That is a similar share to that in many rich countries, but Brazilians get far poorer ser- -6 vices and overall the state does little for the 1990 95 2000 05 10 15 22* poor. Almost 80% of spending goes on pay- Source: IMF *Forecast roll and pensions, compared with less than 60% in most countries, notes Mr Fraga.and spent tence was Trading places 12019. Brazil, soyabean exports, by destination ows that % of total al devel- 100 mpt to re- lling priv- Rest of world 80 , merely Lula has 60 would not EU27 ng about 40 roving its China 20 in econo- a govern- 0 vestment 1996 2000 05 10 15 21 O. Source: UN Comtrade ve every- g, argues tral Bank Public investment is just 2% of GDP. In 2016 back on a Michel Temer, an interim president, intro- nged eco- duced a rigid cap on spending. Both Lula ns. Three and Mr Bolsonaro want to scrap it (indeed, training, in practice, the president already has). In- t, and bet- vestors will expect the new government to come up with a new fiscal rule to replace it. its life as Mr Bolsonaro yielded control over much neglected discretionary spending to Congress. Claw- orker had ing back government control over the bud- That per- get will involve a tough political fight. 3 years, by institute. Breadbasket blues n the PISA Under Mr Bolsonaro, Brazil has attracted is in 2018 international obloquy because of his glee- tries. Bra- ful destruction of the Amazon rainforest. d on read- Ricardo Salles, his environment minister aths. Im- until last year, dismantled the agencies re- d in 2009. sponsible for enforcing the laws against education deforestation. Lula has said he would rein- evangeli- state his environmental policy, under r core part which deforestation slowed. been more Even Mr Bolsonaro, and his new minis- nservative ter, now seem to accept the need for more n improv- control. So do many in agribusiness. Be- . The pres- cause of China's growing appetite for soya, s denial of the European Union takes only 16% of Bra- of climate zil's farm exports, compared with 41% in arly, voca- 2000 (see chart 2). "The big incentive for d. There is better environmental policy isn't trade. It tend to be is reputation and the attraction of invest- ment," says Mr Jank. eds a more Brazil still has great strengths. Its abun- an state is dant food and energy are wanted by the Andre La- world. Its government mainly borrows previously from local investors, and not in foreign ment. Ad- currency. Its fiscal situation is less dire ending as- than Argentina's, for example. "Under eve- too, is tax ry government for the past 25 years we have president, taken at least one step in the right direc- is more tion," says Carlos Simonsen Leal, the presi- dent of Fundacao Getulio Vargas, a univer- rtly fiscal. sity. But there have been false steps as well. % of GDP. If Mr Bolsonaro wins and continues to many rich practise the politics of confrontation, Bra- poorer ser- zil will continue to drift. Lula has a rare ittle for the chance for personal redemption. The ques- es on pay- tion is whether he would use it to carry out h less than the reforms Brazil needs to become a suc- Mr Fraga. cessful 21st-century economy