Saturday, December 5, 2015

Robin Hood is not Brazilian


Robin Hood is a folk hero who stole from the rich to give the poor. With the laudable goal of lessening inequality between their citizens, many Latin American populist governments have institutionalized Robin Hood’s deeds with uneven levels of success. Brazil for its part has taken the opposite tracks: it steals from the poor to give to the rich. Culturally speaking, Brazil is closer to Ali Baba and his 40 thieves than to Robin Hood and his Merry Men! However, many in Brazil wish that there were only 40 thieves!

The thieves are a diverse but incestuous lot: senior public servants, “new money” oligarch families, bankers and above all politicians from every hue. They spend an inordinate part of their time devising ways to milk the state and loot state-owned companies, setting in motion a plundering process which becomes an end in itself. The high jacking of state institutions by special interest groups deprives the state of its capacity to improve the quality of life of its citizens, particularly the most vulnerable of them. Colluding corporate and political corruption is squeezing the poor at both ends. Brazilian fat cats live off the poor.

During the last decade, Brazil has been touting that thanks to its welfare programs, it has pulled 20 million people out of poverty. This is true, but its pervasive looting culture prevented many more from being raised, and now with the Brazilian economy in the doldrums (self-inflicted), many people are falling back into poverty. Education, healthcare, housing and infrastructure are the four most critical sectors for poverty reduction but they are the most affected by looting. What is not stolen is wasted by mismanagement. Because corruption increases the cost of the government’s programs, quality falters and their numbers are consequently reduced.

Brazil’s education budget is a bottomless pit: the country spends about 23 percent of it tax income well above the developed countries’ average for very meager results. Most students attend classes part-time, results are abysmal, the drop-out rate remains vexingly high and poorly paid teachers are not very dedicated. Educational failure does not seem to be high among the country’s concerns. Not surprisingly Lula da Silva, the former president, proudly claimed that he never read a book in his life before becoming president!

The multi-layered public health sector is dysfunctional as well. It is the largest public system in the world. Last year, a survey[1] indicated that 93 percent of the respondents found this sector mediocre or bad. To compensate for the shortage of doctors, the state had to import thousands of Cuban doctors to care for the population in the far flung parts of the country. The health system repeatedly failed to contain mosquito-borne cyclical epidemics like dengue and more recently the Zica fever which are both transmitted by the Aedes eagypti mosquito. Zica is an African virus which causes birth defect in babies, principally micro-encephalitis. Many regions in the poor north-east of Brazil are in a state of emergency and the virus has now spread to 13 states. While the government is desperately trying to contain the disease, one health official advised women not to get pregnant!

Social and low income housing is in worse shape still. Even Dilma’s government (Dilma Rousseff, the current president) admits to gross mismanagement, an official understatement for corruption practices. Government watchdog institutions have disclosed that building costs are grossly inflated in order to provide political kickbacks to local politicians and public servants. As a result, the housing policy meets neither basic demand nor people expectation. Shoddy buildings collapse before completion, stay vacant or are used for unintended purposes.

                   minha casa

                       Social Housing, current Brazilian standards

Not only do the poor have to do with bad schools, mediocre healthcare and lousy housing, they see their jobs disappearing. Some 1.5 million jobs were lost in 13 months as a result of the political and economic crisis[2]. To top it all, the 10% annual inflation rate eats into their meagre income. The crisis has been exacerbated by Dilma’s macro-economic mismanagement to gain re-election in October 2014 and the meltdown of the state-controlled oil giant Petrobras triggered by the disclosure of a mega bribery scandal[3]!

The covert financing of the re-election campaigns of national and local political bosses (i.e. vote buying) is the main reason for diverting public funds. The second is for feather bedding and pocket lining at a family scale. Corrupt politicians and oligarchs are joined at the hip, the first follow the instruction of the second, all paid by tax payer money. In such a state of affairs, money and favors are the key political drivers, elections are meaningless, and people are frustrated and disenfranchised. This pernicious system has allowed the tycoons of large construction companies to make tons of money and set up illicit cartels to rig contracts. Not surprisingly, the productivity of many Brazilian companies remains poor even by Latin American standards!

                              lula alibaba

    Ex-president Lula (da Silva) as many Brazilians would like to see him.

The Petrobras bribery scandal and its upstream and downstream developments have become an entertaining political soap opera with dozens of industry big-wigs and politicians in jail or under investigation. To save their skin, many defendants, businessmen and Petrobras executives have signed plea bargains with prosecutors, and their singing has been cacophonic. One tune led to another and more people are getting booked by the police. Recently, irked by the arrogance of the political class, the Supreme Court got involved and ordered jail terms for a leading politician of Lula and Dilma’s Worker’s Party and his alleged partner in crime, a famous investment banker. And the show goes on.

Thirteen years ago, the Worker’s Party won the heart and mind of low-income people by trumpeting its Robin Hood mantra and promising more socio-economic equality and integrity. Robin Hood must be rolling over in his grave.

[1] By the Federal Medical Council.

[2] November 2015 data.

[3] The management of Petrobras has put a price tag on this corruption, writing off US$ 2 billion. The total loss was estimated at US$ 7.2 billion in 2014.