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Wednesday
Jan052011

An impressive legacy

On the 1st of January President Lula of Brazil completed his second term as President of Brazil, leaving office as the most popular President in Brazilian history, in fact the most popular world leader today (despite what rubbish Berlusconi has to offer).

Unlike a few other world leaders I could name, President Lula deserves that popularity. He has defied the right-wing predictions of the Economist and their ilk, by delivering long-term stability and economic growth - giving a decade of 5%+/year GDP growth, low inflation and increasing exports. But this is not how President Lula earned his popularity. From the 1950s to the 1970s Brazil averaged 5%+/year GDP growth (albiet, without the low inflation and in an easier economic context), but the poor had little to celebrate while watching the rich get richer.

No, the economic boom that President Lula has presided over is a left-wing economic boom, where the profits fueled the Bolsa Familia program. This program gives direct cash grants to the 50 million poorest Brazilians, doubling the income of the very poorest. What has been the result of this, and other pro-welfare policies of the Worker's Party?

  1. The percentage of Brazilian children not going to school has dropped from 15% in 1995 to less than 1% today
  2. 50 million people living in poverty have real increases in their standard of living, with 20 million people climbing out of absolute poverty
  3. Poverty has fallen from 22% to 7%
  4. The income of poor Brazilians has grown seven times as much as the income of rich Brazilians

And that is how you run good left-wing policy. While in Europe the working class is expected to pay of the debt of the financieers, and the USA is shovelling its future down the drain as fast as it can, Brazil is simultaneously combining high economic growth with decreasing income inequality. It is smart policy, as poor people spend their money on basic necessities, stimulating the economy, and the next generation to hit the workforce will be healthier, smarter and better educated. Most of all, it is ethical policy - I'd rather see poverty half while GDP stagnates than poverty stagnate while GDP rises, since it is people that matter, not the gross domestic product. Of course, Lula managed both, which is even better.

Oh, and President Lula also finally broke the link between Brazilian economic growth and Amazon deforestation, reducing deforestation by 70% over his term in office. President Rousseff, you have quite a legacy to live up to. Try to remember your socialist roots and don't let that economics training overcome your common sense.