Transcript Senator Buarque`s Powerpoint presentation

Education and Political
Transformation in Brazil
CHALLENGES FOR THE BRAZILIAN
ECONOMY
Rio Branco Forum on Brazil
Center for Latin American Studies
University of Califoria, Berkeley
November 4th, 2004
The mistake within the
problem
Two ways to look to the economy
From inside
From outside
For decades: wealth defined by GNP, investment in infrastructure, foreign savings, exports
and domestic demand by wealthy income-concentrating class, state as the fostering engine.
Now: preventing return to political voluntarism and fiscal irresponsibility
Giving up the other obsolete or unfair concepts
Challenges in the economy
• Three statements to support the new look to the
economy
• Joan Robinson: “But Ricardo never saw the
mistake was in the question and kept right on
trying to eliminate mistakes in his answers”
• Einstein: “We can’t solve problems by using the
same kind of thinking we used when we created
them.”
• Roosevelt instead to asking how to resume
growth in order to crate jobs, asked how to
create jobs in order to resume growth.
Challenges in the economy
• The main economic challenges in the
world came from outside:
– The discoveries
– The technological revolution
– The new deal
The failed challenge in Brazilian
Economy
• In the 1870’s only five or six big economies
• In the 1970’s some others, but Brazil was among the
promising ones to the near future.
• In the first decade of XXIth century Brazil lost its pace to
many new come countries. Brazil lag behind regarding
China, India, Portugal, Greece, Spain, Ireland, South
Corea, Tawain, Malaysia, …
• All of them made a difference, they invest in economy
out of the economy, specially in: EDUCATION, basic and
high education and
• SCIENTIFIC AND TECHNOLOGICAL CAPACITY.
• With that they disrupted the vicious circle of their poverty.
The vicious circle of Brazilian
debts
Poverty
Income concentration
Economy
Finance
Culture and knowledge
Ecology
Sovereignty
Youth
Model
The virtuous cycle of the debt
payment
Economic dynamics
Health
Education
Productivity and savings
Increase in investment
Reduction of “Brazil Risk”
Decency
Cost of omission
Complete Abolition and the Republic
Model
Youth
The vicious circle of Brazilian debts
Social debt
Debt unto youth
Income concentration
debt
Debt unto
sovereignty
Debt unto culture
and knowledge
Logical debt
Debt unto
economy
Financial debt
Ecological debt
The Golden Curtain
• Economic Growth does not abolish poverty
• The income growth does not spread over the
excluded people
• The income transfer is not enough to mitigate
poverty
• More than unequality a Curtain cut poor from the
rich people
• Brazil as a short scale of the global social
apartheid
A new logic to define poverty
Horizontal poverty line
non-poor
poor
The way out of poverty is a shift
of the family income up the
horizontal line
Vertical poverty line
excluded
The way out of poverty is
ensuring to the family the access
to essential goods and services
included
Social Shock
• Social policies as the only alternative for a
social revolution in a global neoliberal
world.
Inclusive legislation and social
incentives
Inclusive Laws:
• Compulsory basic education
• Federalization of basic education,
national minimum levels:
– teachers wages and teachers skills
– equipments
– contents
• Educational responsibility law
Inclusive legislation and social
incentives
Social Incentives :
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Bolsa-Escola
Establishment of a minimum remuneration and increase of teachers’ average salary
Teachers training and federal certification
School equipment
Universal water supply and sewage systems
Poupança Escola (Savings-School) program
Civil service
Elimination of illiteracy
Land reform
Agro-industries
Irrigation in the Northeast
Micro credit
Reform of the Brazilian university system
Housing
Unemployment compensation
Home health care
The Leaps Forward
• Sociallly: to come from 72th to 30th
position in the UN Human Development
Index, in 15 to 20 years
• Economically: to have an increase on the
economic rate of growth since the begin of
the program, thanks to a kind of social
keynesianism, or a social new deal, or as
we prefer SOCIAL SHOCK
The Cost of a Social Shock
• Total Cost R$ 47.3 billion,(around US$ 16
billion) 3.5% of domestic debt, 3% of GNP,
30% of yearly interest charges, 6% of the
annual tax burden,
• The Net Cost R$ 12,5, discounting the tax
return, the reduction on social costs, the
increase on growth.
LOW COST OF THE SOCIAL SHOCK
Cost in
billions (1)
National income
Public sector budget
Estimated primary surplus
Expenditures with Marketing
Profit of private banks
Expected profit of state
-owned
companies
1.600
720
45
5
15
20
Cost of Social Shock
( by column 1)
Gross
Net
0,029
0,0078
0,65
0,0174
1,05
0,28
9,4
2,5
3,1
0,83
2,3
0,62
How to finance
• A linear cut of 2% on the 2005 budget
costs.
• A National Independence Fund to be
repaid with interest by the year 2022, the
bicentenial of our Independence.