Brazil’s lessons

Americans will learn a lot more about Brazil, which won the bid for the 2016 Summer Olympics last week, between now and when those games begin.
It is a nation worth study.
With a growing population of nearly 200 million, it is South America’s largest country in people as well as area. Brazil occupies most of the eastern half of the continent. Portugese is the official language. Spanish and English are both widely spoken. About 75 percent of the population is Roman Catholic, 15 percent Protestant and 7 percent claim no religious affiliation.
Brazil competes with the United States in the soybean and beef markets and is a major exporter of ethanol produced from its sugar cane fields. Ethanol can be made cheaper from sugar cane than from corn, so the U.S. slapped a 55-cent-a-gallon tariff on imported ethanol to protect the subsidized U.S. production.
Brazil may be the only nation which meets a substantial portion of its transportation fuel needs with biofuels.
In addition to its advanced biofuels industry, Brazil announced a major oil find last year in deep waters off its shores.
Due to conservative fiscal policies, Brazil has largely escaped damage from the fiscal meltdown that did so much damage in the U.S., Europe and Asia. Its banks did not use the exotic derivatives, which drove Lehman Bros. into bankruptcy and all but destroyed AIG.
Brazil’s bid for the OIympics included a promise to spend $14.4 billion to prepare Rio de Janeiro for the games. It was the largest budget offered by the four finalists, Chicago, Madrid, Tokyo and Rio, and was made possible because the country had amassed a record $224.2 billion in foreign reserves, thanks to record-high prices for its exports, soybeans, iron ore and steel products.
Brazil’s prudent fiscal management earned the nation an investment grade rating last year.

BRAZIL’S FINANCIAL success doubtless came as a surprise to many who worried when Luiz Inacio Lula da Silva was elected president in 2002 that he would take his country careening to the left. Lula, as he is known, began his working career as a lathe operator and rose to become the country’s most prominent labor union leader. He was elected president on a populist platform.
He never completed elementary school. But was smart enough to drop his populist rhetoric once he became president and to govern as a pragmatist rather than an ideologue.
Lula hasn’t forgotten his roots. In addition to building huge reserves and becoming a world leader in renewable fuels, Brazil also has improved the lot of its working classes. A Business Week report cited that “the minimum wage has increased by 45 percent in real terms over the past seven years and Lula’s social initiatives have helped push 24 million Brazilians above the poverty line. The middle class, those earning from $617 to $2,600 a month, has risen from 38 percent to 50 percent of the population since 2003.”
The Brazilian leader made an impassioned plea to the Olympics committee which proved persuasive:
“I honestly believe it is Brazil’s time,” he told the committee before the vote. “Our rivals today have all hosted the Games in their countries before. For them it will be just one more Olympics. For us, it will be an unparalleled opportunity.”
Brazil’s success will boost all of South America in the eyes of the world. The United States should do all that it can to help its southern neighbors take advantage of their opportunities as 2016 draws nearer. All the nations in this hemisphere will benefit.

— Emerson Lynn, jr.