(Published in Daedalus, Spring 2000, pp. 29-56).
A bad reputation
The social transition
The poverty agenda
The social democracy or welfare agenda
The economic agendas: national development and international
The emerging agendas
Social policies: the scope for action
A bad reputation
When it comes to social issues, Brazil has a terrible reputation. The official
statistics are bad enough, and the images conveyed by the international
press are arresting children wandering and being killed in the streets or
working in sweatshops; urban dwellers crowded in shanty towns, landless
peasants clamoring for agrarian reform; Indians decimated by loggers, gold
seekers, and ruthless land lords; dozens killed every day in the cities
by armed gangs or the police; and high income inequality, dramatized by
portraits of elegant apartments in Ipanema facing the favelas in the hills.
None of these images is false, but their meaning and interpretation are
not obvious. The press and television portray extremes, giving no sense
of the whole. Improperly used, statistics can lead to wrong interpretations,
hiding important differences, contrasts, and trends. As an example, the
1995 Brazilian national household survey found about five hundred thousand
children between the ages of five and nine years working, most of them without
payment. The easy interpretation, which created headlines, was the existence
of widespread child slavery, driving the prices of Brazilian products down
and effecting the prompt and indignant reaction of well-meaning consumers
in civilized countries. The reality was very different: most of these children
helped their parents in family-based agricultural activities as part of
their normal lives. At age nine, 82 percent of these children were in school,
as compared with 93 percent of those who did not work. Lack of study at
this early age has less to do with child labor than with general poverty
and school scarcity in some rural areas. The number of children working
regularly increases with age. By ten, 7 percent of children do some work,
and 5 percent are out of school; by sixteen, 36 percent work, and 26 percent
are out of school; by eighteen, 50 percent work, and 50 percent are out
of school (data from 1997). The inference might be that the reason children
do not study is that they have to work. However, the correlation is small:
among eighteen-year-olds, 58 percent of those who work are out of school,
compared with 40 percent of those who do not work. Child labor, in short,
is mostly associated with rural poverty, and, by itself, it is not an important
cause of lack of education. Abusive and exploitive child labor exists and
has to be curtailed, but this is not the pattern.
In another example, the high levels of income inequality found in Brazilian
statistics are due more to the existence of an extended upper middle class
in the urban areas, benefitting from the large wage differentials that exist
between the more and the less educated, than to the contrasts between the
few very rich and the millions of poor, portrayed sometimes in the mass
media (see figure 1). What is striking is not the income of the richest
group (a monthly median of a little above 3,000 reais, or U.S. $3,000 in
1997), but the large difference between the top and the bottom, and especially
the way income level multiplies as education, measured by years of schooling,
grows. The conventional vision is that poverty could be reduced by taking
money from the rich and giving it to the poor. The data, however, show that
the rich are not so many, and that the best policy for poverty reduction
is to invest in education, to provide more skills to the population and
reduce the premium on higher levels of education.
Brazil's bad reputation led to the idea that the country's social conditions
are worsening, for reasons that vary, for different commentators, from the
adoption of neoliberal and market-oriented policies by the Brazilian government
to the lack of a true commitment to the values of rationalization, privatization,
and international competitiveness. In reality, while some conditions have
worsened in recent years, especially those related to the quality of life
in large metropolitan areas, most of the basic social indicators, such as
education, life expectancy, housing conditions, and sanitation, have shown
steady increase and improvement. Modernization and social change.
are long-term trends that move forward despite short-term variations in
economic trends and policies. For instance, the number of households with
access to tap water in Brazil went from 52 to 85 percent between 1970 and
1991; access to standard household appliances such as refrigerators, color
televisions, freezers, and telephones is increasing steadily as the prices
of these items go down; infant mortality saw a dramatic drop in the 1970s,
kept decreasing throughout the "lost de cade" of the 1980s, and continues
to decline today (see figure 2).
These examples are not given to suggest that Brazilian social problems are
not serious or that they can take care of them selves. Brazil is going through
a profound social transition that is changing the shape of the country and
raising a new set of social and economic issues that were not on the agenda
just a few years ago. The new agenda is a reflection not only of existing
problems but also of the perspectives, values, and interests of different
social groups. The question of who sets the agenda has important consequences
for the issues tackled, their priority, and the likelihood of their failure
The social transition
The most evident feature of the social transition is that Brazil is now
a predominantly urban, not rural, society. Cities like Salvador, Recife,
Rio de Janeiro, and São Paulo have always been important as seats of the
colonial and later national and regional administrations and poles of attraction
for immigrants, but most of Brazil's population lived outside the cities
until recently. In 1940, 70 percent of the population still lived in rural
areas; in 1997, only 20 percent did (see figure 3).
Rural jobs are fast disappearing. Five hundred thousand rural posts were
1992 and 1995, while 4.7 million new jobs were created in urban areas. Between
1995 and 1997, 1.8 million jobs disappeared in the countryside, and a similar
number was created in the towns.
The main reason for this shift is the gradual disappearance of small, traditional
rural properties and their replacement by agribusiness and a new, prosperous but
small rural middle class in the Southern region. The allure of city life and access
to jobs and education for the young, as well as the availability of small pensions
for the elderly, also explain the movement away from the hardship and uncertainties
of rural poverty.
The other important transition is the dramatic drop in population growth.
Between 1991 and 1996, the yearly growth rate was 1.38 percent, down from
about 2.99 in the 1950-1960 period. The rates are close to 1 percent both
in developed regions, such as Rio Grande do Sul and Rio de Janeiro, and
in poor areas, such as Bahia and Pernambuco. This growth rate corresponds
to a fecundity rate of about 2.1, below which the population starts to shrink.
The Brazilian population is still young and is expected to keep growing
for a few decades more, but will stabilize and start to shrink before the
middle of the century. This demographic change is not a consequence of an
intentional policy of population control, but an outcome of rural migration,
the entrance of women into the labor market, and the spread of health information
and services. This population trend is already having some positive effects,
such as the reduction of migration flows from country to town and de creased
demand for schools. Smaller families can therefore invest more in the education
of their children. These facts help to explain how Brazil was able, in a
few years, to achieve almost 100 percent of school enrollment for its children.
In a few decades, however, as the population gets older, a new set of problems
will arise, related to health, pension costs, and the social placement of
Because of these transitions, the number of people able to change their
social status in Brazil is one of the highest in the world. In 1996, 60 percent of the children of rural workers and
two thirds of the children of urban, non-qualified workers were in a better
social position than their parents. It is in light of these changes that
the social problems in Brazil, and the agendas for their solutions, should
The poverty agenda
Poverty eradication is now a top priority in the agendas of international
institutions such as the World Bank, the Inter American Development Bank,
the United Nations, and the Catholic Church, and it has great visibility
in the mass media. In Brazil, the issue has been driven by social movements
such as the Citizenship Movement against Hunger (headed by the late Herbert
José de Souza, or Betinho, as he was commonly known), the Movement of the
Landless (Movimento dos Sem Terra), many smaller movements and nongovernmental
organizations, and the federal government itself, through the Program of
Communal Solidarity (Programa da Comunidade Solidária). Together, they shattered
the centuries-old tradition of accepting poverty as natural and unavoidable
and placed the goal of poverty eradication at the forefront of Brazil's
political and social agenda.
The poverty agenda is very different from the traditional stand of the old
Left, which fought for the improvement of the living conditions of workers
through better deals in their relations with the capitalists and the establishment
of compensatory social policies. In the past, industrialization, the development
of science and technology, and the spread of education led to the belief
that the problems of poverty, ignorance, and deprivation were about to disappear,
through the expansion of private entrepreneurship, through the purposeful
and rational action of governments and international organizations, or through
some combination of both. Malthus's pessimism was eclipsed by the image
of "unbound Prometheus," an endless expansion of wealth and well-being driven
by man's rationality and innovativeness. This image was prevalent in both
capitalist and socialist countries and adopted by developing countries in
the Southern Hemisphere in their drive for political independence and socioeconomic
The assumption that economic development alone would give everybody an adequate
job, however, is now being questioned in industrialized countries and never
really existed in developing and underdeveloped societies, where most of
the population still remains without access to essential goods and services.
The new poverty agenda is marked by the strong moral tone of its proponents
and the belief in the redeeming power of political will and community mobilization.
In the countryside, most of the poverty agenda is carried out by the Catholic
Church and the Movement of the Landless, which denounces the immorality
of land concentration and raises the flag of family agriculture. In the cities, campaigns are promoted to mobilize the middle
classes and to bring food and clothing to the poor. "Market capitalism"
is criticized for its lack of concern for human predicaments, and government
is criticized whenever social expenditures are reduced.
Indeed, Brazilians could do much more charitable work. A permanent stress
on social equity and well-being is important for focusing public-policy
priorities, and the growing concern of international agencies and nongovernmental
organizations with issues of social deprivation is a welcome change. The
poverty agenda, even when it does not lead to specific proposals and solutions,
is a powerful and welcome instrument for change. It is fair to say, however,
that these efforts to mobilize society to help the poor have been less effective
The problems of poverty and social deprivation in Brazil have two very distinct
faces, requiring different policies and approaches: the population of the
modern, urban periphery of the large metropolitan areas and mid-size towns;
and the poor population in the gradually shrinking rural areas, mostly in
the Northeast region. Intense poverty in Brazil has always been associated
with rural populations, deprived of education or social services, working
the land with very little productivity, no protection from the vagaries
of rain and drought, and very high fecundity rates. Brazilian rural dwellers are not descendants of old, pre-Colombian
civilizations, as in Mexico and some Andean countries, nor of traditional
peasant societies, as in Europe. They are, mostly, descendants of Portuguese
and African or Brazilian indigenous slaves, leftovers from plantation economies
and cattle-raising farms ruined by lost markets and impoverished soil, lacking
the technical traditions and culture that could help them to extract more
benefits from their surroundings.
The combination of intense poverty, decadent local oligarchies, and depleted
soil makes rural poverty very difficult to change. Since the nineteenth
century, cyclical droughts have raised the specter of famine in the Brazilian
Northeast, leading the federal government to pour money into the construction
of water reservoirs. Most of the money, however, remains in the hands of
local bosses, who do little to improve the lot of the poor. Modern agriculture
grew mostly in regions populated by European immigrants in the South and
in large plantations in the frontier states of the West, and it is now expanding
at a very fast pace in the frontier regions of the central highlands. When
it comes to the Northeast (as, for instance, with new irrigation projects
and the cultivation of high-quality table fruits), it is brought mostly
by immigrants from the traditional small-farms economy of the South.
"Agrarian reform," the division of large rural properties into family plots
is high on the agenda of antipoverty movements in the rural areas and is
dramatized by periodic episodes of force ful occupation of large farms by
landless families. The government has been responding by taking hold of
little-used or contested rural properties and transferring them to the peasants;
by raising taxes on unproductive land; and by devising credit instruments
for rural dwellers. These policies can improve conditions for several segments
of the population, but are unlikely to have a larger impact on the poverty
issue. Brazil does not have a culture and tradition of small, family-based
agriculture except in the Southern areas of Japanese and European immigration.
Today, family-based agriculture is shrinking everywhere, or coming together
in large cooperative or business networks for the production of milk, poultry,
fruit, and other products for the urban markets and for export. As productivity
rises, the prospects of creating more rural jobs, even in areas of modern
and efficient agriculture, are not bright.
If rural poverty is not improving, it is at least getting smaller. As people
move to towns, they also improve their lot, even when they remain poor and
have difficulty finding jobs. According to Sonia Rocha's calculations, the
proportion of those living in poverty in Brazil went down from 68 to 35
percent of the population between 1970 and 1990. Part of this change was
due to economic growth, but most of it was a consequence of urban migration.
In towns, people can find a cheap place to live in a shanty town or in the
outskirts of the big cities, can have access to electricity and treated
water, can go to a medical post to get some kind of medical care, can send
their children to school, and can have a greater chance of finding a job
or earnings of some kind.
The social democracy or welfare agenda
This agenda can be described as the quest for public benefits and social
protection for the population, in a context of economic growth and industrialization.
It is very European in inspiration and is associated with issues like job
stability, the reduction of working hours, medical care, retirement, and
housing. It includes also the organization of workers in unions, the development
and strengthening of professional associations, and the growth of the public
sector as an efficient and fully professionalized administrative core.
This agenda appeared in Brazil in the 1920s and 1930s and gained importance
after World War Il. A complex and generous set of social benefits was created,
limiting the number of hours worked and mandating yearly vacations, minimum
wage, an additional salary at Christmas, maternity leave, job security,
retirement benefits, pensions, health insurance, and health care.
This generous social legislation, however, was limited to persons with regular
jobs in urban centers. Even among them, benefits were not evenly distributed.
Until the l960s, different professional segments had separate medical and
pension funds, and there was no system of social security for rural dwellers.
Today, retirement benefits for civil servants and the military are still
much better, and public resources for medical care go mostly to persons
living in the richer urban areas. People do not complain much about these
inequities, perhaps because of the expectation that the benefits granted
initially to some would be later extended to others. So industrial unions
do not protest against the privileges of civil servants; students in private
institutions do not complain about the free education for those in public
universities; and diploma holders in new, less prestigious professional
areas do not question the market privileges held by traditional professions
such as law, medicine, and engineering. This assumption of increasing benefits
from the social democratic agenda has enjoyed widespread support, and grew
in ambition in periods of increased political participation and democracy:
after 1945, and again with the Constitution of 1988, at the end of the military
These benefits were financed, at first, by taxes on export activities; later,
in the 1960s and 1970s, by an increase in the government s ability to collect
taxes; and since then by inflation. The crisis of the Brazilian welfare
state is similar to the one affecting Western Europe and the United States.
As benefits increased, the cost of health and education grew; as the population
got older, the welfare bill skyrocketed and was not followed by equivalent
increases in economic growth and productivity. Brazil spent, in 1994, about
14 percent of its gross national product (GNP) in social benefits (approximately
51.5 billion reais, or dollars), 65 percent of which went to social security
(two-thirds for the general population, one-third to military and civil-service
retirees), 18.4 percent to education, 16.5 percent to health, 9.3 percent
to education and culture, and 7.1 percent to housing. Only a small part of these re sources reached the bottom
The crisis of the social democratic agenda in Brazil is that it reached
its peak when most of the population was still far from benefitting from
it and when productivity was still much lower than that of the countries
that were its model. The expectation that the benefits acquired by some
will eventually be extended to all is becoming very difficult to sustain.
The economic agendas: national development and international
Until the 1950s, Brazilians still debated whether the country should remain
mostly an agricultural economy or move force fully toward industrialization.
This discussion was settled, in practice, by the "targets program" (Programa
de Metas) of President Juscelino Kubitschek in the late 4950s, which started
the Brazilian car industry, linked the country with paved roads, and started
ambitious programs of energy production and industrial development. The
key components of the early agenda of economic development were the role
of national government as the main promoter of economic growth and the protection
of local industry against foreign competition through high tariffs and regulations.
This was not, in essence, a nationalistic agenda; the car industry, for
instance, was owned by large multinational manufacturers, Volkswagen, Ford,
General Motors, and later Fiat, which kept the Brazilian market for themselves,
and foreign investors were well received throughout. Nevertheless, Brazilian-owned
industrial and financial groups and interest also flourished and received
the benefits of large public con tracts and partnerships with foreign groups.
This "import substitution model" reached its climax in the 1970s, with the
ambitious projects of forced industrialization led by the Ernesto Geisel
In the previous years, a large influx of foreign capital led to unprecedented
levels of economic growth - the so-called Brazilian Miracle of the 1970s.
During these years, it was possible to argue that no specific social agenda
for poverty reduction or increased social benefits was needed, since the
benefits of economic growth would eventually spread out to the population
as a whole. In fact,
economic growth led to improvements in income for all social sectors, but
income inequality also increased, lending credence to the mistaken notion
that economic development is based on increased exploitation of the working
In the 1980s, a combination of high public spending and unexpected increases
in international interest rates led to mounting inflation and economic stagnation.
The military started their ordered withdrawal from public life, and the
civilian government that took over in 1985 did not have the nerve or the
conditions to bring the country's economy under control. The economic agenda
of the 1990s is based on the quest for economic stability and international
competitiveness, characterized by less reliance on the importance and relevance
of a Brazilian-owned industrial sector, a reduced role of the state as entrepreneur,
and a renewed appreciation of agriculture as a source of economic growth.
International competitiveness requires either cheap prices or better products,
or both. It also requires a sound economy, able to inspire confidence in
foreign investors and predictability in economic transactions. This agenda
has been tried by the Cardoso government in a very difficult situation,
given the need to stop and control inflation, balance the budgets of the
federal government and the states, reach an equilibrium in the balance of
payments, and open the economy to the international market, all simultaneously.
At first, economic stabilization, achieved with the introduction of the
real in 1995, was more effective in spreading social benefits and improving
the living conditions of the poor than any other conceivable social policy.
Inflation control is estimated to have increased the true income for those
at the lower strata by' about 30 percent, raising the consumption of staple
products and household durable goods. Inflation remained at the level of
about 1 percent a month since the introduction of the real, and the traditional
mechanisms of salary indexing were abolished. N4ost price increases occurred
in the services sector and were particularly damaging to middle sectors.
Most of these effects occurred immediately after stabilization in early
1995. By 1998-1999, with the economy growing slowly and unemployment on
the rise, and especially after the currency devaluation of early 1999, there
were signs of a worsening situation, reflected in a drop of real mean income
for all social groups. Brazil entered the year 2000 with a stable and growing
economy, but it is a slow growth with no direct impact on unemployment,
the quality of the job market, or income in equality.
The social effects of international competition are less clear. This process
did not start with the Cardoso administration, but was kept as an important
part of its agenda. As the economy reorganizes and gears up for international
competition, formal employment and job stability shrink while opportunities
for self-employment and work in an expanding services sector increase in
a new environment where educational and professional skills make all the
difference in terms of opportunities and expected income. Data on unemployment,
collected by the Brazilian Institute for Geography and Statistics (IBGE),
showed a consistent pattern of about 5 percent of the active population
in a condition of open unemployment (without work and actively looking for
it), compared with figures close to 20 percent in Argentina. With economic recession in 1998-1999, it rose another two
or three percentage points. A closer look at the employment data shows an
increasing number of self-employed and people in the so-called informal
economy and a decreasing number of industrial workers. Many layoffs can
be explained by the increased efficiency of firms, some by downsizing and
outsourcing, and some by the relocation of industrial firms from the periphery
of São Paulo, Porto Alegre, and Recife to other towns and regions (especially
to the São Paulo hinterland) that are not covered by the employment statistics.
So, an important part of what seems like a historical decrease in working
opportunities reflects in fact an important process of economic re structuring
and geographical displacement. Nevertheless, the number of people unable
to find jobs or earn a living is on the rise, particularly in large metropolitan
areas, among the less educated young, and for those displaced by industrial
From the perspective of this agenda, the complex system of social protection
built in Brazil in the 1930s appears insufficient, economically unbearable,
and perverse. It is insufficient because most services remain limited to
those who live near the places where they are provided, usually in the more
developed stares and regions. It is economically unbearable because the
population is getting old, requiring more health care and ex tended retirement
payments, and needs better education. It is perverse because there is a
clear, positive correlation between income and benefits received - if you
are middle class or higher, your chances of having free higher education,
good free medical care, and early retirement with generous benefits are
much better than if you are poor and live in a backward region.
This combination of moral and practical evils should be enough to convince
anyone that the system of social welfare in Brazil is in need of deep reform.
This is difficult to explain, however, to those who are losing benefits
or imagine that they are close to getting them. At heart, the social agenda
of international competitiveness is a negative one. The assumption is that
the economy should be allowed to grow unhindered, and, with increased productivity
and higher income, people would be able to take care of their own needs
of health, education, and retirement, with as little help from governments
as possible. This assumption, however, is doubtful: it is possible to conceive
of a scenario in which the Brazilian state becomes very efficient and the
economy very competitive, while maintaining, simultaneously, high levels
of income inequality and large pockets of poverty. The poverty agenda has
to be faced at once, without waiting for the benefits of international competitiveness.
The emerging agendas
Beyond these broad agendas, there are others related to specific issues
or groups, which remain, at least for the moment, in a secondary position.
An incomplete list would include the themes of race, gender, and environment,
which I shall address below, as well as education and urban violence.
The ethnic or racial agenda has not been very salient, al though
about half of the Brazilian population is either black or of mixed blood,
with large groups of descendants of Italians, Japanese, Germans, and other
European immigrants. Most of the non-Portuguese European and Japanese immigrants
came to Brazil at the turn of the century, and today the second and third
generations speak Portuguese as their mothers’ language and retain little
of their original culture. We can still identify areas characterized by
strong German, Italian, and Japanese groups, and the Japanese, particularly,
have shown a strong tendency toward endogamy. But there are not conflicts
and demands associated with linguistic and ethnic issues, and questions
about the rights of or discrimination against foreigners are not part of
the Brazilian social agenda.
The situation regarding the African slaves and their descendants is much
more complex. The Brazilian statistical office, IBGE, asks systematically
about the "color" of Brazilians in their censuses and national surveys.
They find that about 10 percent of the population define themselves as "black"
(preto), 40 percent as "brown" or "gray" (the word used in Portuguese is
“pardo”), and about 50 percent as white, with a small percent age being
classified either as "oriental" (mostly of Japanese origin) or indigenous.
To be preto or pardo is associated, statistically, with being poorer, less
educated, and less likely to hold a prestigious occupation, and the correlation
between "color" and income persists even for those with similar education.
This association between "color" and income suggests the existence of barriers
against the social mobility of the nonwhite population, or the existence
of specific cultural and value pat terns associated with education and social
mobility in specific groups. However, the demarcation lines between different ethnic or racial
groups are blurred, and it is relatively easy to “pass" from one category
to another. Most of the population refuses the color classification used
by the census office, particularly the terms preto and pardo, preferring
to call themselves “moreno” or to use a myriad of alternative terms. This means that, although the race boundaries are indistinct,
there is strong awareness of racial differences.
Brazil never had apartheid institutions like South Africa or the United
States and has strong legislation forbidding any kind of racial discrimination.
Racial prejudice, however, seems wide spread, and to have dark skin can
affect the self-perception and life opportunities of millions. The answer
of several black organizations and intellectuals to this situation has been
to embrace their racial identity and to press for an agenda of affirmative
action in social policies. The main difference from the United States, however,
is the lack of clear boundaries between racial groups and the refusal of
most of the population to accept racial labels.
The situation of the Brazilian native populations, known as "Indians" since
the times of the early European exploration of the Americas, is different. The estimate is that the Indian population, when the Portuguese
arrived in Brazil in 1500, was about five million. The 1991 Brazilian census
registered about 162 thousand persons who were still classified as Indians,
while specialists estimate the actual number to be around 270 thousand.
More have lost most or all of their Indian identity. Their physical traits,
however, can be seen in the faces in the streets, mostly in the North and
the Northeast, and native words designating places, plants, and animals
are everywhere. They are not remnants of one native culture, but descendants
of about two hundred very different societies, speaking 150 distinct languages
and widely different in the way they related to each other and to their
environment. A federal agency, FUNAI, is responsible for taking care of
the Indian population, a feature of government that has seen no precedent
for blacks or other underprivileged groups. This clear delimitation of some
sections of the Indian population has allowed for affirmative action that
has intensified recently, expressed mostly through the generous demarcation
of their lands. There are several problems with this policy: it excludes
assimilated Indians, it does not include effective means to protect the
Indian territories from invaders and predators, it does not place limits
on the predatory activities of the Indians themselves, and it often runs
against the interests of the non-Indian local populations.
As with race, the gender agenda has not developed much, in spite
of significant gender-related differences in income, occupation, and work
part, this agenda has not developed because Brazil does not have the most
obvious manifestations of gender discrimination found in other societies.
Nutrition and health conditions of boys and girls are similar, showing no
gender-based preferential treatment by families, and there are more girls
than boys in schools at all levels; women are entering the job market in
large numbers. Families with both parents working are the rule today, rather
than the exception. However, women tend to get less prestigious and profitable
jobs, their income is lower than men's for the same occupation, and their work outside the home does not seem to have reduced
their burden in the household, especially in the growing number of single-parent
families. It has been difficult to translate these predicaments in a clearly
defined social agenda, because they still reflect cultural traditions governing
the relationships between men and women. There are a few issues of special
interest for women, such as an increase in the number of kindergartens and
day-care centers for children, and the right to abortion, which encounters
strong resistance from the Catholic Church. The gender agenda remains, overall,
limited to a few feminist movements and organizations, and it is far from
entering the mainstream.
The environment agenda is still restricted to small groups of intellectuals
and middle-class activists and to nongovernmental organizations concerned
with issues such as the destruction of the Amazon forest, the extinction
of animal species, and the loss of biodiversity. The problem with the environment
agenda is that the collective benefits of environmental protection often
conflict with the short-run interests of individuals and the budget limitations
of governments and can be particularly threatening to low-income groups
that deplete the resources of forests, rivers, and the soil, inhabit shanty
towns near the sources of clean water in the cities, and ride in cheap,
smoke-producing city buses.
However, environmental problems such as air pollution in large cities, the
deterioration of beaches and tourist resorts, the destruction of fertile
soil, the contamination of food and water, and the disposal of garbage are
starting to have direct and dire consequences for the population, requiring
prompt action. Electricity comes mostly from dams and waterfalls, but these
sources are nearing exhaustion, and the introduction of thermal plants will
bring new threats of environmental impact. In spite of the recent creation
of environmental protection agencies such as the Ministério do Meio Ambiente
(Ministry of the Environment) and IBAMA (Instituto Brasileiro do Meio Ambiente),
and the signature, by the Brazilian government, of Agenda 21, after hosting
the world's main international conference on the environment in Rio de Janeiro,
environmental issues have yet to become a priority in the country.
Social policies: the scope for action
The effect of these partially overlapping, partially conflicting agendas
has been to put enormous pressure on public authorities to respond to rising
and often contradictory demands, in a context of economic stringency. An
incomplete list of social policy issues would include the maintenance and
expansion of the existing systems of social protection and benefits in public
health, retirement, education, and housing; the correction of existing distortions,
delivering more benefits to the poor and removing privileges of specific
groups; the improvement of the efficiency and efficacy of the civil service
in the administration of its resources and in its dealings with the public;
the reduction of income inequality; an increase in the number and quality
of jobs and opportunities for self-employment; the provision of emergency
relief to groups in extreme poverty; the development of programs to enable
those in pockets of poverty in the countryside and in the urban peripheries
to move away from their syndromes of poverty and social marginality; the
addressing of acute problems of social conflict and unrest; and attention
to the special needs and demands of minorities and less privileged groups,
including the native population and blacks.
These formidable tasks are not the sole responsibility of the federal administration,
but depend on the active involvement of state and local governments, nongovernmental
organizations, and the private sector. Brazil is a federation of twenty-seven
states and about five thousand municipalities, all supposed to respond to
the demands and attend to the needs of their populations, particularly in
education, health, urban administration, and basic services. There is a
tendency, however, to look at the central government as bearing the main
responsibility for the country's ills and their eventual cure. There are
reasons for this, given the tradition of political centralization. However,
the large differences that exist between Brazilian states and localities
are due not to preferential treatment or neglect from the central government
regarding specific regions, but mostly to the ability of local populations
to take care of their own needs and interests, which is related, in turn,
to the quality and effectiveness of local governments and leadership.
The federal government has to bring the budget under control and cannot
increase public expenditures without jeopardizing the economy. Most of the
resources administered by the government are already committed to the payment
of salaries, constitutional transfers to states and local governments, legal
benefits, and payments of interests on the internal debt. To carry its policies,
the executive needs congressional approval, which, as in the United States,
often requires heavy bargaining and horse-trading. The government is also
under constant pressure to deal with issues of great visibility that capture
the negative attention of public opinion, nongovernmental organizations,
and the press and contribute to the country's bad reputation, but are not
necessarily the most important or high est-priority items on the governmental
Brasilia, like Washington, is not the best place from which to run complex
administrations supposed to reach poor communities thousands of miles away.
The need for decentralization is clearly perceived, and it is taking place.
Nevertheless, Brazilian regions and states differ widely in their ability
to procure resources and use them to the benefit of the local population.
The poorer the region, the more likely are its elites to live on handouts
from the central government, keeping the poor in deprivation. Centralized
policies are needed to compensate for regional inequity and to establish
standards for services and care, but they can be used as an excuse to keep
old bureaucracies in place.
Even in the best circumstances, with good government and economic growth,
the daunting social problems facing Brazil in issues of health, poverty,
education, employment, and living conditions will last for decades to come.
Nevertheless, they can be faced, reduced, and better administered if proper
policy decisions are taken and if the administrative and managerial competencies
of public authorities improve. It is useful to look, however briefly, at
what is being done in some of these problem areas.
"Previdência Social," the national system of pensions and retirement benefits,
is a problem for the population because of its meager benefits, and a major
headache for the government since it consumes 65 percent of the expenditures
of the federal government in the social area. Two-thirds of this total is for former employees in the
private sector and is financed by a fixed percentage of all salaries, paid
jointly by employers and employees (about sixteen million beneficiaries);
one-third comes from the ordinary budget and is used to pay retirements
and pensions in the public sector (about half a million persons.) In recent years, important advances were made in reducing
corruption and increasing the speed and efficiency of processing papers
and payments. New legislation was introduced to reduce the most obvious
distortions and privileges, lowering the retirement benefits of civil servants
and increasing their contributions.
The system remains unbalanced, however, and requires a much deeper reform.
The current pay-as-you-go mechanism can only cover minimum benefits and
should be replaced by a funded system based on a combination of mandatory
and voluntary contributions. The transition between these systems, however,
is very expensive, given the need to keep paying current benefits while
saving for the future.
The effort in the health sector has been to transfer the administration
of health services to local communities (the so-called Sistema Unificado
de Saúde, SUS) but the federal government is still responsible for two-thirds
of all public health expenditures. There are significant achievements in preventive medicine,
through large inoculation campaigns and intensive work on grassroots programs
based on community health agents and family doctors. There is no solution
in sight, however, for the runaway costs of the medical and hospital bills
paid by the federal government to private health providers, or the costs
of the recovery and proper maintenance of public hospitals. In the recent
past, the system of payments for health services was corrupted by a combination
of inflationary costs, extremely low fees, and delayed reimbursements, inducing
institutions to inflate or fake the number and complexity of services provided.
Administrative mechanisms were put in place to curb these practices, and
a new and highly controversial tax on financial transactions was approved
by Congress as a temporary stop gap to cover the costs of the health system.
The government has still to spell out a clear policy that could lead to
a more equitable and viable system of public health care in the long run.
Basic education is recognized as one of the most successful areas of social
policy in recent years.
Access to basic education is almost universal, repetition and dropout rates
are falling rapidly, and secondary education is expanding at very high rates.
The quality of learning, however, is still low, and a complex system of
student assessment at all levels was created to identify the main problems
and establish priorities. Basic (fundamental and secondary education is
the responsibility of local and state governments, but the federal government
has an important instrument for action: the resources of the Fundo Nacional
de Educação, a tax levied on firms for educational purposes. Two-thirds
of these resources remain with the states, but the federal government has
about seven hundred million dollars a year to spend. In the past, most of
this money was channeled through local politicians, and its destination
was uncertain at best. Now, the Ministry of Education has developed a system
of transferring part of these resources directly to schools, boosting their
autonomy and ability to act. Recent legislation was introduced to guarantee
a minimum expenditure of U.S. $300 per student per year, by states and municipalities,
which leads to a common base salary for schoolteachers. The success of these policies is partially explained by
a growing consensus on the importance of basic education and on the main
policy orientations for the sector, and by the existence of significant
state- and municipal-level initiatives.
On the other hand, the Cardoso administration has been thus far unable to
carry out a clear policy for higher education. Brazil has less than 10 percent
of its younger population en rolled in higher education, about two million
students, a figure that is expected to grow very rapidly in the forthcoming
years. The federal
system of higher education, costing about 6.5 billion dollars a year and
providing free education to less than four hundred thousand students, is
clearly in need of reform. A project to grant administrative autonomy and
require accountability from public universities is stalled by strong resistance
from teachers' unions and student organizations. Meanwhile, the private
sector is kept under bureaucratic controls and is expanding without clear
directions. Several initiatives related to technical, secondary, and teacher
education also exist, but none with the promise of significant impacts before
Open unemployment in Brazil's urban centers is low, but under employment
is high. The outlook
for the next ten to twenty years is of an increasing number of youngsters
entering the job market, combined with a drive in the productive sector
to increase efficiency by incorporating new technologies and downsizing.
This perspective is a cause of concern, and the government has been trying
to respond with a series of actions. The most important, but without immediate
effects, is to increase the quality of basic and secondary education.
There are also proposals to reduce the cost of labor and deregulate the
labor market. Today, a firm has to spend approximately the same amount
it pays for salaries in social benefits and taxes. The project is to have
a menu of choices for labor contracts, including indeterminate, fixed,
and short-term contracts, as well as different packages of social benefits
and severance compensation, to be negotiated between independent unions
and the employees. In principle, such a system should allow for better
job contracts in the richest sectors of the economy and more employment
while giving fewer benefits to sectors that are not employing many individuals
today or are hiring illegally without paying benefits or taxes. These
proposals are resisted by the trade unions and Congress, who argue that
they would just reduce the existing benefits and increase profits without
generating more jobs.
Another approach is to try to increase employment through public works
and through direct incentives and credit to the private sector. Although
the government would not embark on a late-Keynesian policy of state-supported
full employment, there are several mechanisms to stimulate job creation,
through credit provided to small firms, investment in needed public work,
and training programs targeted to specific sectors of the job market.
In 1996, the National Development Bank (BNDES) was supposed to have invested
about 11.3 billion dollars and to have combined its resources with those
of the Fundo de Amparo ao Trabalhador (FAT) for job-creating investments
in public transportation, environmental protection, tourism, and communications,
which would not only generate new employment opportunities but increase
the efficiency and employment capabilities of the productive system as
a whole. The Ministry of Labor is also engaged in an ambitious program
to provide credit for small firms in order to generate more employment
and income. More than two billion dollars were invested in this program
between 1995 and 1996. A similar system was devised for the rural sector.
Finally, the Cardoso administration is amplifying Brazil's system of unemployment
insurance. Although still very limited in how much and for how long it
pays the unemployed, it helped about 4.5 million people who lost their
jobs in 1995, an estimated 60 percent of the total (the remaining 40 percent
did not apply for the benefits, probably because they could find another
job without much delay.)
The old days, when governments did not care about the money they spent
and people assumed that poverty and misery were facts of life, will not
return. The social agenda is growing while resources are scarce, and it
will never rise to the levels required by so many constituencies.
Are the current social predicaments a consequence of the recent economic
policies of international competitiveness and the reduced economic role
of the public sector? A central contention of this essay is that they
are not. The previous economic arrangements did not produce better social
results and led to economic stagnation and financial disarray. Social
conditions in Brazil have been improving in spite of slow economic growth
and are better now than in the past. They are far from satisfactory, however:
improvements have been too slow, and the problems of an aging population
and urban decay bring new and very difficult challenges.
The new economy cannot be blamed for these social problems, but cannot
be expected to solve them either. Economic development can always help,
but the growing reliance on advanced technologies, the concentration of
resources in large international corporations and in privileged geographical
locations, the relentless pressure for lower costs in a context of intense
international competition-all these elements conspire against the improvement
of the income and life conditions of the poor and uneducated. Governments
will remain important, making the best possible use of their tax money
and regulatory powers to provide education, health, security, and environmental
protection and to reduce the predatory effects of extreme market competition;
society will have to learn to get organized to take care of its interests.
From now on, regulatory functions are likely to prevail over the direct
provision of services, and public administration will have to reinvent
itself. Brazil has already had some experiences that point in the right
direction. Over the course of a few years, the privatization of telecommunications
gave access to telephones to millions, and new regulatory agencies have
been established to oversee the work of private corporations in areas
such as energy, telecommunications, and oil production and distribution.
Concepts such as evaluation, assessment, certification, cost recovery,
decentralization, partnership, citizens’ participation, and empowerment,
unknown just a few years ago, are entering the vocabulary of public administration
and social movements at all levels and being gradually transformed into
The introduction of new practices in the provision of public services
and a larger participation of civil society in the management of its own
affairs are already creating a new perception of the ways society can
confront its problems, with very promising results. Old habits die-hard,
however; the conflicting agendas will continue to exist, and the social
problems faced by the Brazilian population will not go away in a few years,
even in the best of circumstances. There is always hope, however, when
things are moving in the right direction, and it is possible to argue
that they are.
 This is true not only for Brazil,
but for Latin America as a whole. “The evidence does not support the notion that
high inequality in Latin America is simply a matter of a few rich families owning
a disproportionate share of each country... Much of the region's inequality is
associated with large wage differentials... Large wage differentials reflect,
among other factors, unqual distrihution of the quantity and quality of schooling."
Inter-American Development Bank, Facing up to Inequality in Latin America:
Economic and Social Progress in Latin America, 1998-1999 report (Washington,
D.C.: Inter-American Development Bank, 1998, 1.
 Unless otherwise indicated,
all figures are from the yearly National Household Survey (PNAD), carried
out by the Brazilian Institute for Geography and Statistics (IBGE).
 José Pastore and Nelson
do Valle Silva, Mobilidade Social no Brasil (São Paulo: \Iakron Books,
 Bernardo Sorj, "A Reforma
Agrária em Tempos de Democracia e Globalização," Novos Estudos CEBRAP
50 (March 1998): 23-40
 According to Sônia
Rocha, an expert on poverty issues, "poverty in the rural Northeast is
still typical of traditional societies. The percentage of female household
heads is low. Most people work in agriculture, thus unemployment is irrelevant.
Most . . . household heads are illiterate or have less than four years
of schooling. The majority of the poor are self-employed and some-even
among the household heads-work for more than fifteen hours a week without
pay, which is associated [with] labor in small holdings yielding just
enough for family subsistence. Access to basic public services-education,
electricity, sanitation is largely inadequate, which means that the State
is ab- sent as [a] provider." Sônia Rocha, "Sustainable Development and
the Poverty Reduction Goal," paper prepared for the Brazilian Academy
of Sciences Conference on Sustainable Development, unpublished, 1999.
 Celso Furtado was probably
the first to describe this process of reversion from a modern, export-oriented
plantation economy into self-contained, isolated, and inefficient rural
units. Celso Furtado, " Economic Contraction and Territorial Expansion,"
in Celso Furtado, The Economic Growth of Brazil (Berkeley; University
of California Press, 1963; first Brazilian ed., 1959), 71-77.
 According to Sônia
Rocha's description, among the poor in the large cities " families are
smaller and the number of children lower than in the Northeast. Looser
family ties mean [a] higher percentage of female household heads, which
is one of the main features of urban poverty in modern societies. The
illiteracy rate is high, even among household heads, but much lower than
in the rural Northeast. Most poor work in trade and sUrvices, that is,
in the low productivity/low earnings activities in these sectors. [The]
unemployment rate is high, which is typical of urban modernized areas,
where formal aspects of the labor market are enhanced. Most household
heads work as employees. Access to public services is relatively good:
most children attend school and there is almost universal access to water
and electricity." Rocha, "Sustainable Development and the Poverty Reduction
 On the beginnings of
Brazil's welfare state, see Angela Maria de Castro Gomes, Burguesia
e trabalho. Política e legislação social no Brasil, 1917-1937 (Rio
de Janeino: Editora Campus, 1979). For the reaction of Brazilian industrialists
to welfare protection to workers, see Warren Dean, The Industrialization
of Sao Paulo, 1880-1945 (Austin, Tex.: The University of Texas Press,
1969). For the social-security system, see Amelia Cohn, Previdência
Social e Processo Político no Brasil (São Paulo: Editora Moderna,
1980); for a broad overview, see Phillipe C. Schmitten, Interest Conflict
and Political Change in Brazil (Stanford: Stanford University Press,
 Authoritarian governments,
however, were important in the creation and expansion of the Brazilian
social democracy agenda. Thus, the Getúlio Vargas regime in the 1930s
is accredited with the first legislation establishing the con- tours of
the Brazilian welfare state, taken from Fascist Italy's carta del lavoro.
in the 1960s and 1970s, the military government unified the social-security
systems in the private sector and introduced retirement benefits to the
rural population as well as the first Brazilian legislation aimed to reduce
the concentration of land properties, the Estatuto da Terra.
 IPEA, Dimensionamento
e Acompanhamento do Gasto Social Federal- Exercicio de 1994, versão
preliminar (Rio de Janeiro: IPEA, Diretoria de Politica Social, December
 Estimations by the World Bank found that 21 percent
of Brazil's public expenditures on health, education, and housing went
to sectors in the upper quintile of income distribution, with only 15.5
percent going to the lower strata (the corresponding figures for Chile
were 4 percent and 36.3 percent).
 Antônio Barros de
Castro and Francisco Eduardo Pires de Souza, A Economia Brasileira em
Ritmo de Marcha Forçada (Rio de Janeiro: Paz e Terra, 1985).
 This was known in
Brazil as the "cake theory," according to which the cake has to rise before
there is enough to be shared by the party's guests. For a criticism, see
Ricardo Paes de Barros and Rosane Mendonça, "O impacto do crescimento
econômico e de reduçôes no grau de desigualdade sobre a pobreza," Novos
Estudos CEBRAP 51 (July 1998): 107-122.
 Unemployment figures
published by the statistical office of the state of São Paulo (the SEADE
Foundation) are usually three times higher than those of IBGE, the federal
statistical institute, due to conceptual and methodological differences.
However, the trends for both indexes are verv similar.
 Ricardo Paes de
Barros has shown that direct investment in basic education is much more
effective for the reduction of social inequality and poverty than economic
gnowth as such. Ricando P. Bannos and Rosane Mendonça, 0 impacto do
crescimento econômico e de reduções no grau de desigualdade sobre a pobreza
(Rio de Janeiro: IPEA/Dipes, Texto para Discussão no.528, November
 Social mobility
among Japanese descendants, for instance, is much higher than among other
immigrant groups or Brazilians of any "color" on race.
 Simon Schwartzman,
"Fora de foco: diversidade e identidades étnicas no Brasil," Novos
Estudos CEBRAP 55 (November 1999): 83-96.
 See Peter Fry, "Politics,
Nationality, and the Meanings of 'Race' in Brazil," in this issue of Daedalus,
for an extended discussion. See also, for an overview, Thomas E. Skidmore,
Black into White; Race and Nationality in Brazilian Thought (New
York: Oxford University Press, 1974) and Carlos Hasenbalg, "Entre o mito
e os fatos: racismo e relaçôes raciais no Brasil," Dados 38, 2
 See Manuela Carneiro
da Cunha and Mauro W. B. de Almeida, "Indigenous People, Traditional People,
and Conservation in the Amazon," in this issue of Daedalus for
an extended discussion.
 Anette Goldberg
Salinas, Joana Girard Ferreira Nunes, and Emmanuelle Nunes, "Feminismo
contemporâneo no Brasil: estratégias das mulheres nos movimentos e interesse
dos homens no poder," Sociedade e Estado 12 (2) July-December 1997:
 Ricardo Paes Barros,
Ana FIâvia Machado, and Rosanne Silva Pinto Mendonça, A Desigualdade
da Pobreza: Estratégias Ocupacionais e Diferenciais por Gênero (Rio
de Janeiro: IPEA, Texto para Discussâo no. 453, January 1997).
 Charles C. Mueller,
"Environmental Problems Inherent to a Development Style: Degradation and
Poverty in Brazil," Environment and Urbanization 7 (2) (October
 M. A. C. Fernandes
et al., Dimensionamento e Acompanhamento do Gasto Social Federal
(Brasilia: IPEA, Texto para Discussão No. 547, February 1998).
 Civil servants pay
12 percent of their salaries in social security costs, but, in contrast
to the National Social Security Institute (INSS) system, these re- sources
are not linked with the ongoing expenditures, which are much higher.
 See, for an overview,
Kurt Weyland, "Social Movements and the State: The Politics of Health
Reform in Brazil," World Development 23 (10) (October 1995): 1699-1712.
See also M. E. Lewis and A. C. Medici, The Challenge of Health Care
Reform in Brazil: Balance and Trends, Technical Notes REl-97-004,
ed. Inter-American Development Bank (May 1997); The World Bank, Brazil-The
Organization, Delivery and Financing of Health Care in Brazil: Agenda
for the '90s (Washington, D.C.: The World Bank, 30 June 1994); José
Luis A. C. Araújo, Jr., "Attempts to Decentralize in Recent Brazilian
Health Policy: Issues and Problems, 1988-1994," International Journal
of Health Services 27(1) (1997): 109-124; Amelia Cohn, "Health Policy
and Economic Change in Brazil," paper presented to the International Sociological
Association (ISA), 1994; Nilson do Rosârio Costa, "Inovação política,
distributivismo e crise: a política, de saúde nos anos 80 e 90," Dados
39 (3) (1996): 479-511; and Vera Schattan Coelho, "Interesses e instituiçôes
na política de saúde," Revista Brasileira de Ciências Sociais 13
(37) (June 1998): 115-128.
 See Claudio de Moura
Castro, "Education: Way Behind but Trying to Catch Up," in this issue
of Daedalus for an extended discussion.
 The estimation is
that, between December of 1997 and August of 1998, the average salary
of teachers in the state and municipal systems increased by 13 percent,
due to transfers provided by this legislation. The largest increase occurred
in the Northeast, where teachers' salaries increased by about 50 percent.
Brazil Ministry of Education, Education for All - Evaluation of the
Year 2000 (Brasilia,: Ministério da Educação, Instituto Nacional de
Estudos Pedagógicos, 2000)
 For an overview,
see Simon Schwartzman, 0 Ensino Superior no Brasil-1998 (Brasilia,:
Ministério da Educação, Instituto Nacional de Estudos e Pesquisas Educacionais-
INEP, Textos para Discussão 6, 1999). The interpretation of these figures of 7 or 8 percent of unemployment,
how- ever, can be deceptive. "Open unemployment" refers to persons with
no source of income who are actively looking for a job. In the absence
of significant unemployment compensation, those who lose their jobs have
to find some other way of earning something, moving from the "unemployed"
to the "underemployment" ranks.