Brazil Rises. It Could Rise Some More

The last time I was in Brazil, there was a corruption scandal all over the TV.  I don’t remember the exact circumstances, just that it was a very senior politician, a state governor I think, and a very striking visual. In a hidden camera sting, this servant of the people was filmed taking a huge bribe, and then stuffing the illicit cash into his socks.

Fast forward to this recent stay and the unprecedented popular protests on the streets here. The numerous complaints about corruption brought the madly grinning, criminal sock-stuffer back to mind. When I asked a friend about this, the answer was telling; the question, “Did he go to prison?” caused her to laugh long and hard. No, don’t be silly, was the implication, no senior Brazilian politician would ever see the inside of a jail cell for corruption, even if filmed with his hand in the till — or down his socks.

And of course this is the problem, corruption is endemic, and the notion of big government is as well. Everyone knows that to get a big project done would mean making “informal payments” of some kind. Why on earth would a series of soccer stadiums cost three times as much in Brazil as in South Africa? And why is it that one of the BRICs fails so spectacularly to modernize its seaports to accommodate a multiplication of trade?

Now, what I fear could happen here is that I slip into a typical gringo-in-Brazil rant. This is not good because, of course, it upsets Brazilians. Like it or not, our place of birth makes up at least some of our identity, and criticism of it can sting. So, let me be clear; I love Brazil. I love it so much that I am linked to its people by marriage. I love it so much I return here for at the very least two months of every year. I travel here, I socialize here, I would like to move here, I love Brazil. (I would probably love the rest of Latin America as well, given the chance.)

Brazilians aren’t born with red-tape for umbilical cords, they enter this world as honest and straightforward as anyone else. I don’t view the burearruption here as being caused by the character of Brazilians, anymore than I view Britain’s soggy weather as being caused by Brits. Yes, it affects character, yes it affects how we live, but it’s just part of the environment. Fortunately for Brazil, the “technology” to change that environment is close to hand; the United Kingdom won’t be so lucky.

We could make some guesses as to how this place came to be this way. Maybe it was Brazil’s role as a source of commodities for the Portuguese empire. The imposed bureaucracy created a system to be manipulated and avoided, whilst the exploitative nature of imperialism fostered a zero sum attitude. We could also point to the imposition of a property owning elite. But the historical reasons are somewhat academic; this is the situation we have; this is what there is to work with.

Dilma Rousseff, Brazil’s president, appeared on TV last night. Considering a mob had come close to over-running the congress building just a few days before, it was hardly a speech to cause a mass change of mood. Demonstrating was good, she said, but if there was more violence great force would be used to quell it.

All petro-money, presumably from the vast new, but yet to be exploited, “pre-salt” oil fields, would be used for education. But everyone knows this is yet another charter for corruption. Yes indeed, the oil money would go into the government, how much would actually end up in schools is another matter. There was a proposal to import doctors from overseas. But everyone knows that means a cozy arrangement with the Cuban government to allow more doctors just from that country. Then there was some waffle about how soccer brings people together, the World Cup was a good thing and, besides, Brazil had won it five times.

My privilege was to sit with three generations of Brazilians and get their take on it. For the eighty-year-old it barely raised an interest; governments come, governments go. Some come by an election, some come by force. Either way it doesn’t matter, governments do what they like, and don’t do what they say they will. For the sixty-year-old there was disgust and much eye rolling. Yes, she may consider her vote, she may try find a political party to support, but, still, really, what difference would it make?

For my Brazilian wife, though, it was different. There was the same disgust, there was the same head shaking, but this time there was hope as well. Because my wife knows there is a real and realistic solution.

To make bread rise during baking you need to add a tiny bit of yeast. The yeast won’t cost much, and it will not take much space in the pan, but adding it completely alters the growth, texture, and quality of the bread. But your bread won’t rise if you cover the pan before adding the yeast.

A few years ago, China added yeast to their economy. They created Special Economic Zones that had different, more business friendly rules than the rest of China. These zones grew themselves, but also served as examples and as beneficial disruptions to the old order in the rest of China.

It probably wouldn’t be practically possible for a Brazilian politician to make meaningful change within the present system, even if they wanted to. Even if a courageous and principled person were to fight their way to the top ranks, once there they would be fighting entrenched special interests every day of their career. Then, when his or her career would end, someone else would come along to undo all the good work.

So this is why Startup Cities or Model Cities (PDF) would be of huge benefit to Brazil. These areas, unpopulated land at first, which would be tiny when compared to the vast size of the country, would have autonomy over some or all of the rules they create. These rules would particularly favour the creation of wealth through entrepreneurship and innovation. They would have their own institutions, such as courts for civil law.

All this would mean that the residents of these zones would still be Brazilians within Brazil, but all of the bureaucracy and institutions that are locked in cycles of corruption are stopped at the zones’ border’s.

Brazil is ideally placed to host such zones. Its vast size and low population density means that these zones could be created in multiple locations. That would allow them to compete for residents and businesses, both with each other and with the wider nation of Brazil. That pressure to compete will then drive improvements in how Brazil is governed.

In the recent protests a banner was seen that said “If they are going to import Cuban doctors to improve health, I want Swedish politicians to end corruption in Brazil.” That concept, of parachuting better governance in, could never happen in all of Brazil all at once. But it could happen in a few small parts of Brazil right now. And that would be the pinch of yeast that let’s Brazil grow to be the nation it always should have been.

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