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  HOME | Opinion (Click here for more)

Beatrice Rangel: Brazil's Upcoming Great Leap Forward
Former Venezuela Presidential Chief of Staff Beatrice Rangel explains how the Rule of Law is laying the foundation for Brazil's next big acceleration.

By Beatrice E. Rangel

Brazil finally seems to be poised for a great takeoff which could surpass Mexico's successful modernization bid of the 1990s.

After falling for eight consecutive quarters, growth has finally resumed. Agriculture jumped started this trend which has taken over the rest of the economy. Growth is expected to strengthen further, although confidence will remain sensitive to political developments.

Such developments pivot around whether Luiz Lula Da Silva will or will not be disqualified to run for the presidency and if not whether he wins.

Inflation has fallen to below the central bank's target, raising real incomes and allowing lower interest rates, which will support a recovery of investment.

But above all, Brazil leads Latin America in building an independent judiciary. This is bound to propel development not just growth.


Indeed, according to the Economist Intelligence Unit, the strong correlation between rule of law and growth propels societies to development.

This neglected ingredient of progress is necessary to economic success. To be sure, investments in infrastructure and value creation would never materialize in a chaotic environment where rules are constantly changed or overlooked to favor powerful people or concerns.

Consumers, on their part, neglect saving to favor consumption while the risk factor increases interests on loans and other forms of debt.

These drawbacks disappear when institutions are strong enough to enforce law and regulations and to treat all equally. Certainty begins to reign, and with it, people invest, save and create. This, in essence, is the development chain.

Brazil has placed the first foundation for rule of law to reign. Now it is essential to continue institutional building by means of reshaping party politics and regulations overseeing political parties.

Fear of the resumption of authoritarianism led constitutional drafters to create a very soft regulatory framework to control political parties. As a consequence, it is easier to create a party in Brazil than to register a Cumparsa in the Rio Carnival.

Fragmentation in party politics makes governance difficult to attain and this has been on the rise. Ten years ago, there were 4 political parties representing each about 5% of the electorate. Today there are eight.

This besides promoting corruption, as small parties tend to sell their votes to finance their operations, forces governments to create coalitions to be able to pass laws in congress.

Coalitions usually demand administrative positions in the Executive. As the top bureaucracy is filled with coalition demands, budget control and policy execution turn very complex. This without considering the fact that coalition representatives lack allegiance to the government party and its program and thus take over bureaucratic territory to obtain resources for personal enrichment or party finances. In short political reform is the next battle in the development war that Brazil needs to fight.

With Lula most probably in jail, the democracy founding generation quietly retired, and the economy flying high again, probabilities are high that Brazil will engage in political reform successfully and then it will most probably become as successful as Mexico was after signing NAFTA. But in the case of Brazil the fuel will last longer because it will come from within.


Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.

For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.

You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.



Also by Beatrice Rangel in her Latin America from 35,000 Feet series

Beatrice Rangel: Rio -- Demystifying the Olympic Games

Beatrice Rangel: The Luddite Syndrome in the Americas

Beatrice Rangel: Venezuela's Unexpected Transition

Beatrice Rangel: We Now Have a Wider Canal But Has Our Wisdom Expanded???

Beatrice Rangel: From Brexit to Tesla, Progress is Made by Leaders!!!

Beatrice Rangel: As the World Goes Latin, Latin America Gets Logical

Beatrice Rangel: On the Difficulties of Fighting Barbarism in Latin America

Beatrice Rangel: The Impending Age of Housekeeping!!!!

Beatrice Rangel: What Happened to All Those Rosy Forecasts for Latin America?

Beatrice Rangel: On Dialogue and the Rules of Geopolitics in Latin America

Beatrice Rangel: The Ides of Wisdom in Venezuela

Beatrice Rangel: On the Discreet Charm of Populism

Beatrice Rangel: Three Ladies in Distress

Beatrice Rangel: Trump, Lula, Kirchner and the Last Tupi-Guaranis

Beatrice Rangel: Time for Departures in the Americas

Beatrice Rangel: A Contrarian View on the Panama Papers

Beatrice Rangel: Brazil's Lady in Her Labyrinth

Beatrice Rangel: Back to a Divided Home!!!

Beatrice Rangel: A Historical Take-Off in the Americas??

Beatrice Rangel: A Skipped Journey, a Reaffirmation and a Clearing of Path in the Americas

Beatrice Rangel: The Demise of Civility in the Americas!!

Beatrice Rangel: The Americas from Boutros Boutros-Ghali to Ban Ki Moon

Beatrice Rangel: The Pope's Difficult Stopover in the Americas

Beatrice Rangel: Farewell to The “Diplomacy of Reason”

Beatrice Rangel: 2 Diseases in Latin America -- Different Prescriptions, Very Different Outcomes

Beatrice Rangel: On Health Alerts and the Long Arm of Justice in the Americas

Beatrice Rangel: When Crime Meets Glory

Beatrice Rangel: Playing Hansel and Gretel in the Americas

Beatrice Rangel: Good News/Bad News Starts The Monkey Leap Year

Beatrice Rangel: The Gifts of Christmas!!!!!!

Beatrice Rangel: Crying Wolf in Venezuela

Beatrice Rangel: A 21st Century Tale of Two Cities

Beatrice Rangel: Are the Americas Ready for President Trump?

Beatrice Rangel: On Predictions of War & Global Confusion

Beatrice Rangel: Paris and the Return of Fear

Beatrice Rangel: Marijuana & Latin America's Next Trade Corridor

Beatrice Rangel: Of Burning Airplanes & Argentinean Tsunamis

Beatrice Rangel: The Good, the Bad, and the Ugly in the Americas!!

Beatrice Rangel: Buena Vista's Magic Covers the Americas

Beatrice Rangel: Pride and Perjury in the Americas

Beatrice Rangel: Trompe L’oeils Proliferate in the Americas

Beatrice Rangel: The Economic Consequences of Peace in Latin America

Beatrice Rangel: Colombia, the FARC & the Makings of Gangland in Latin America

Beatrice Rangel: When Extreme Weather Meets Extreme Politics Calamities are Bound to Happen

Beatrice Rangel: When Ladies Hit 70

Beatrice Rangel: About Uninformed Elites and Gullible Leaders

Beatrice Rangel: On US-Engineered Soft Landings in Cuba and Venezuela

Beatrice Rangel: On the Many Ways Cecil Matters

Beatrice Rangel: Blue Moons Lead to Extraordinary Happenings in the Americas

Beatrice Rangel: On Why Embassy Openings Do Not Necessarily Herald Different Policies

Beatrice Rangel: When Jupiter meets Venus

Beatrice Rangel: When Markets and Manners Crash

Beatrice Rangel: From Grexit to Exit, Contagion is in the Air

Beatrice Rangel: An Infuriated God & An Environmental Crusader Mark the Summer Solstice

Beatrice Rangel: Between Ionesco & the Falklands Syndrome

Beatrice Rangel: The Ugly Americas

Beatrice Rangel: How FIFA Corrupted the Beautiful Game in the Americas and World

Beatrice Rangel: Could the US RICO Act Be Applied to Latin America?

Beatrice Rangel: On the Discreet Charm of Commodities for Latin America

Beatrice Rangel: The End of the Chinese Free Lunch in the Americas!!

Beatrice Rangel: The Crooked Twig of Democracy in the Americas

Beatrice Rangel: Of a White Knight for Three Latin American Ladies in Distress

Beatrice Rangel: Withdrawal Symptoms?

Beatrice Rangel: The Un-Mannered Summit

Beatrice Rangel: Easter Miracles in Latin America and the World

Beatrice Rangel: Two Islands, Two Legacies & One Challenge - Modernity

Beatrice Rangel: Killing Me Softly -- the Obama Administration’s Legacy in Latin America

Beatrice Rangel: Of Upcoming Dynasties and Exhausted Ideas in Latin America

Beatrice Rangel: Of Thunderous Silences, Quiet Noises and Flash Backs in Latin America

Beatrice Rangel: Latin America's Dangerous Exports to Europe & the Demise of an Old Fox

Beatrice Rangel: Of Sweet Deals, Sugar Daddies, Direct Mail & Obama’s Care

Beatrice Rangel: Of Latin American Singing Birds, Femme Fatales & Empty Shelves

Beatrice Rangel: When Flying Dragons & Rage Infusions Turn Against Their Latin American Masters

Beatrice Rangel: Holy Haberdashery!!! Is Fire Building Under the Surface in the Americas??

Beatrice Rangel: 2015 -- A Year for Balance in the Americas???

Beatrice Rangel: Pope Francis Looks at the Americas In His Christmas Remarks

Beatrice Rangel: The Paint Brush Hanging from the Wall in Latin America

Beatrice Rangel: A Future for the Americas??

Beatrice Rangel: Going Forward, Going Backward -- It's the Americas!!

Beatrice Rangel: An Eerily Familiar Week in the Americas

Beatrice Rangel: Tale of Two Walls

Beatrice Rangel: Across the Americas, We the PEOPLE

Beatrice Rangel: Across Latin America, The Populist Beat Goes On!!

Beatrice Rangel: Oh My, The Patron of the Eternal Feminine Has Left Us!!!

Beatrice Rangel: Communism from China to Cuba Finds Corruption!!!

Beatrice Rangel: From Rio to Hong Kong Discontent Taps the East to Find a New Way

Beatrice Rangel: Will Latin America Miss the Broadband Development Target?

Beatrice Rangel: Kissinger’s World Order and Latin America

Beatrice Rangel: The Third Attempt -- Will Modernity Prevail in Latin America?

Rangel: While US is Away, Latin America Rethinks Development Paths

Rangel: In the Midst of Riots, a Star is Born in Brazil

Rangel: In Mexico Cinderella Gets to the Ball while Colombia Gets a Chance at Peace


 

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