Rousseff on the Ropes
Has the Brazilian Dream Come to an End?
During the last decade, the best place to witness Brazil’s long economic boom was on an airplane. On almost every flight, you could spot the first-timers struggling to find their seats or nervously asking an attendant for help with their seat belts. In a country larger than the United States, their exhilaration at this seemingly miraculous form of travel was palpable. One elderly man from São Paulo was excited to finally meet his three-year-old granddaughter in Recife; the 21-hour trip by bus was too hard on his back, but it was only three hours by air. He had just one misgiving: “Does it hurt when we land?” I assured him that we’d be fine.
The broader miracle that made all this possible is by now familiar. Pro-market reforms stabilized Brazil's economy in the 1990s, and then, spurred by Chinese demand for commodities, economic growth took off in the 2000s and lifted more than 40 million people out of poverty. Many of this new middle class could afford washing machines, flat-screen TVs, and smartphones for the first time. From 2005 to 2014, domestic air travel rose by an average of 11 percent a year, more than doubling in just a decade. Many people who had grown up hungry were now traveling to Rio de Janeiro, Orlando, and Buenos Aires.
Imagine, then, what it has been like for them to suddenly lose that privilege—to trudge back onto those overnight buses and worry they might never fly again. It’s starting to become a reality; an estimated four million middle-class Brazilians, from a population of 200 million, fell back into poverty in 2015, and a similar fate is the single greatest fear of tens of millions of others.
Although a steep recession began in early 2015, just after President Dilma Rousseff began her second term, the downturn wasn’t too severe for most people until the second half of the year. Air travel tumbled 7.5 percent in November compared with the year before, the fourth straight month of to 7.5 percent today, and many analysts expect it to hit double digits later this year. All told, 2015–16 is likely to be Brazil’s worst two-year recession since at least 1901—the economy is expected to shrink three percent this year.Read the full article on ForeignAffairs.com