|
Point of VIEW.
A
purely analytical perception...
| BRAZIL
AN ACCIDENT WAITING
TO HAPPEN | Continued
from page 1 City
Hall A few weeks later, while the Mayor and his cronies
were meeting in chambers, next door, an armed man slithered by countless guards
in city hall and robbed a bank branch within the complex. Unbelievably, the villain
had the audacity to demand that the two tellers that had faithfully already turned
over $55,000 to him, not to say a word about it for 30 minutes. Even more incomprehensibly,
the tellers complied with his courteous request and never said a word about the
robbery for the required time even though the robber was obviously, long gone.
When asked why he not said a word about the robbery for half an hour, the senior
guard indicated that he had given the bandit his word, and his word is his bond.
While this seemed rather strange, no one chastised him for his actions.
To make the matter even more bizarre, the only
way into the branch was by signing a register at the entrance to Gunabara Palace,
where 15 security guards hold court and then there was the metal detector that
visitors had to go through that was of extreme sensitivity. One of the town fathers
who had been regularly going off and on like a light bulb when he went through
the device, once remarked that the contraption could sense the zipper on his pants
in his mistresses apartment three miles away. However, this statement was not
made for attribution. The fact that a man with a gun could sign the
register and stroll through the detector, pass the fifteen armed guards and then
wander into the branch and then leisurely have the tellers disgorge all of their
available cash, literally within sight of the security, and stroll by them again
carrying laundry bags filled with money, without drawing as much as whisper, caused
substantial public consternation. Public relations-conscious Mayor Marcello Alencar,
when called on the carpet by reporters who found the story beyond belief stated;
“We live in Rio de Janeiro and we run the same risks as any other city resident.
The palace is policed but it is not meant to be a bunker.” Three cheers for Marcello,
the really put those newspaper people in their places.
“The homicide rate is 6.4 times greater in Sao Paulo
than in New York or Lisbon, and it is 5.7 times higher in Rio than in New York
or Lisbon. Reported robberies and muggings in Sao Paulo are rising at the rate
of 15 percent a year, and a recent study showed that a resident of the city has
a one in six chance of being the victim of a violent crime. In spite of the fact
that cities like Rio and Sao Paulo have roughly 30 percent of their police forces
dedicated to investigating crimes, only 2.5 percent are solved because resources
are inadequate.” () Crime
Crime is rampant in Brazil and the best reason that
can be given for it is the fact that police are uniformly poorly paid and as been
brought out in a recent court trial; they have to moonlight, oft-times representing
the same thugs at night as they were hunting down during daylight hours. Reuters
remarked; "International human rights observers have stated that police violence
is common in Brazil and contend beatings, torture and summary executions by police
are all too common. “Despite their reputation for tardiness
and diffidence in daytime law enforcement, the Military Police are famous for
off-hours over-zealousness. Human rights groups estimate that there are two police-committed
killings a day on average in Brazil. About 200 police officers are fired every
year for their participation in organized kidnapping, corruption and death squads.
The Vigario Geral shantytown massacre on August 30, 1994, is probably the most
famous example of their devotion to cleaning up the streets. That night 21 men,
women and children were murdered by at least 30 masked gunmen believed to police
officers acting in vengeance for 4 officers killed two days earlier in the shantytown."
“But
while the Policia Militar (usually retired or off-duty police officers) spend
their off-hours in hit squads eliminating street kids, the hit squads are being
hunted by other less violent but equally eager hit squads. Brazil has created
a force to police the police force, a federal police unit tasked with investigating
and eliminating death squads all over the country. Death squads and drug traffickers
are considered major contributors to Rio’s murder rate of more than 60 per every
100,000 people.” “Rather
then retaining attorneys to handle legal matters, Brazilians prefer hit men. The
tab reads like a restaurant menu. Want to off an impoverished peasant? This week’s
specials is only $70. But if you want to take out a prominent politician, expect
to pay for the caviar: about $20,000. About half of the 12 killings a day in Sao
Paulo are contract snuffings.” ()
Payoffs
Another area that has
become a victim of crime in Brazil is cargo theft, one of the fastest growing
businesses in the entire country. The reason is simple; drug sales have brought
the criminal gangs substantial excess cash. They can afford to payoff employees
involved in unloading merchandise substantial sums to indicate what of value is
being delivered. Once the subject with enough value is identified, it is an easy
matter to bribe the unloading crew to look the other way while the expensive cargo
vanishes into the mist.
The merchandise is
often warehoused until a buyer is identified. In order to fight the bad guys,
Brazilian corporations have had to resort to armed convoys to get their goods
to the destination without having them disappear. Sounds a little like the covered
wagons in the western part of the United States during the 1800s. Maybe these
folks should hire Roy Rogers or the Lone Ranger to show them how to circle the
armored cars if attacked. However, with over one-half million people already employed
in Brazil’s private security industry, there may not be enough money available
to pay these super cowboys the kind of money that they have been used to getting.
“The number of cargo theft incidents continues to rise. During
the first half of 1999, for example, the number of cargo theft occurrences was
reported at 938, versus 564 for the same period in 1998. The problem has become
so serious that many insurance companies will no longer provide coverage for merchandise
in transit. Of 130 insurance companies in Brazil, only six are reported to provide
coverage against cargo theft and even those may not cover food products, cigarettes
or agrochemicals…The trucking industry in Brazil loses approximately 10 percent
of its total billings to cargo theft, which amounts to roughly $2.2 billion per
year. These losses have caused many shipping firms to close their doors.” ()
Tough
Guys
And the criminals in
Brazil are not exactly what you would call pussy cats. They have their own ways
of dealing with threats to their fiefdoms and they are extremely harsh. A recent
and interesting example of this would be that of a judge in the State of Mato
Grosso by the name of Leopoldino Marques do Amaral. It seem that he made the mistake
of taking various serious charges against other judges in his state to higher
authorities in a public forum. Leopoldino spoke of his cohorts taking money from
drug dealers in exchange for the judges giving them freedom or having their sentences
substantially reduced. This didn’t sit well with either the drug dealers, the
other judges that he had ratted on or the people higher up on the payoff totem
pole that were in on the payoffs. He was found “dead in neighboring Paraguay soon
afterwards, shot in the back of the head and in standard Brazilian Mafia style,
his face had been totally burned off. “ ()
Justice
This is the type of
thing that has been going on in Mexico for years that no one has been able to
deal with, even their army. However, the fact is that Brazil is absolutely ripe
for this type of situation because their judges are on the take and in Brazil
and the reason that they are able to get away with it is simple; there is no judicial
oversight. Unconscionably, Judges for some strange reason are not rated by their
peers and an historical precedent in this country has always been such that you
do not condemn your fellow adjudicators for any reason whatsoever. In addition,
the judge hires those that run and operate the court system in many Brazilian
states so that by appealing to a higher bureaucratic authority in this country
you may only be appealing to a the presiding judge’s son-in-law. A strange system
at best.
In addition to protecting
those that line their pockets, Brazilian judges as a rule are very protective
of the state in which they make their decision. In even the most egregious cases,
the state and its employees seem to always emerge victorious. A horrifying example
of this form of justice would be the situation in Eldorado do, an area in the
Amazon where a group of landless pheasants were protesting that fact. The police
seemed to be getting bored with the endless complaining by the natives and shot,
point blank into a crowd of them. Although there were countless witnesses to the
massacre and there was literally no reason for the shooting, the man that ordered
the carnage was never even reprimanded and still serves in his post. Although
the media in the country has caused a substantial stink, nothing has ever been
done.
Brazil isn’t as bad
a Mexico yet, but it is on its way. Criminals though are finding new ways to avoid
jail in this country. One of those methods is purely the continuing filing of
appeals in cases in which they are indicted. The judicial system in Brazil is
so hopelessly overloaded that more often than not, after the third or fourth appeal
has been filed, the court either losses interest in the case or the file. High
court rulings do not seem binding on lower courts and very little time is dealt
with precedent in this country. No matter how closely a case that had been heard
and adjudicated resembled a new one, in Brazil it is often like the first case
had never been heard. Justice begins once again and the outcome is always in doubt.
Prison Guards
Even when the criminal
is convicted and sentenced to jail and is locked up the scenario is not yet over.
Guards are constantly on the take and for a price the jails can be emptied with
impunity. One of the more interesting examples is the case where 80 percent of
the prisoners locked up at Brazil's maximum-security prison in close proximity
to Sao Paulo escaped without a shot being fired. The story was reported by the
Associated Press and goes as follows. "De Silva (Paulo Roberto da Silva,
a guard at the prison) said the guard claimed he was approached by an inmate who
told him another prisoner was ill. The guard went to check and left three inner
doors open, making it easy for the inmates to simply run out the prison's main
gate. There have been nine previous breakouts from the $10 million jail, which
holds convicted criminals as well as suspects awaiting trial. In 1997, nearly
200 prisoners escaped, the year before, 157."
This is probably the
worst record in the history of the world's penal institutions and in the most
recent breakout, the warden along with a number of his associates was given the
gate as the flabbergasted investigators struggled to figure out how almost an
entire prison could have emptied without one guard taking notice of the disappearance
of the majority of incarcerated guests of the state. Picture walking into Sing
Sing with all the guards at the posts but when you go into the area where the
cells are they are empty. You turn to one of the guards and ask where the prisoners
are and he answers, "Gee, they seem to be gone, they were here just a little
while ago." And this just wasn't another prison, it was Brazil's finest maximum
security operation.
The
Theory of Law
“The idea
of letting higher courts call in and extinguish cases, plus another proposal now
apparently abandoned – to require lower courts by law to follow the precedents
set by more senior ones – had faced stiff opposition from lawyers as well as judges.
Both groups have benefited from the creeping chaos in the judicial system…” ()
However,
many of the problems with the court system in Brazil may rest more with the structure
itself. While we in the United States are used to what is called “common law”,
which is the system originated by William the First, Duke of Normandy, who after
he had invaded England was not interested in reinventing the wheel. His main concern
was that things should operate pretty much as they had in the past. He sent his
emissaries out, combing the countryside to find out what rulings had been made
in the past and then molded them into what became the law of the land. The English
law from this point forward drew on these documents and continued to build on
them in order to create law, piece by piece. New decisions were always based on
decisions that had preceded them, which were based on historic usage and practice.
However, Brazil is
in a totally different league, their system is based on Roman law. Precedent has
little to do with the judge’s final decision. It is left up to the individual
judges in this country to use their best efforts in interpreting what the legislators
meant when they created the law, no matter what thought processes went into the
handing down of the higher court’s decision making process on similar. This type
of system leaves a lot to be desired and from a legal point of view, every case
heard in Brazil is literally being heard for the first time. How can you even
have a summary judgment when you have this type of justice. It is no wonder that
the system is breaking down under its weight. When overload hits the courts, the
winners are always the bad guys and that is exactly what is happening in this
country. The only problem is that
there is more weight here than most anywhere else.
Honest Citzens?
Interestingly enough,
it is not only the criminals that use this decrepit court system of justice to
their advantage. It turns out that in Brazil, fully 80% of the appeals are made
by governments or quassi governmental bodies. For the most part, they are just
trying to delay the payment of their bills. In a country in which inflation, historically
has risen both continually and at an enormous clip, this is certainly a winning
strategy. Even if the court hits the entity making the appeal with fines and damages,
it is almost impossible that the new sum would ever equal the current real value
of money that would if been due if the payment had been made promptly.
As an example,
let us assume that $100,000 is due by the City of Sao Paula to the national Government
of Brazil for its share of social security payments. Sao Paulo has a barren treasury
and cannot pay anyway so the line of least resistance is filing a lawsuit that
will tie the case up in court for seven years or more. Based on recent trends,
their cost in present value terms to do this would be about $1000 plus legal fees.
If they won, there would be no cost at all. However, their legal fees are kept
at a bare minimum by keeping a large staff of in-house lawyers on their payrolls.
Making a bad thing
worse, there is no serious penalty in Brazil for bringing what in the United States
would be called a frivolous action ().
In Federal Court here, a lawyer bringing an action that has little or no merit
can be hit with sanctions by the court and fined, censored or even eventually
disbarred for his actions. With no such penalties, it is no wonder that Brazil
has become the land of endless litigation.
However, would
by believe that an end is in sight? It is called E-Judge. The Electronic Judge
is a new project called Justice-on-wheels. A mobile justice units consists of
a van, a driver, a judge, a lawyer and a computer containing just about everything
you would ever want to know about the law. It works something like this:
‘…the team responds, ideally within about 10 minutes to a reported
infraction. A human judge runs the computer program that presents a series of
logical questions concerning the incident. If the incident involved a traffic
accident at an intersection, for example: Has the accused illegally crossed a
traffic light? Was he/she driving under the influence of alcohol? Do we have a
witness? Does he/she confirm that the accused illegally crossed the traffic light?
Written in visual Basic, the Electronic Judge processes the simple “yes” or “no”
answers from the involved parties and eyewitnesses. It then writes a report with
possible solutions for the case according to Brazil’s legal code. The judge evaluates
this report and if the judge and involved parties agree, settlement is reached
on the spot.” I guess anything is better than
the system that is now bogged down by 12,000 judges who are in the process of
handling more than 7,000 cases apiece each year. That’s a lot of justice in any
man’s language. Of course, the municipalities would never allow swift justice
to ruin their little game so for the moment at least, we believe that E-Justice
will be limited to traffic infractions.
Dealing With The
Past
When run by military
dictatorships, Latin American Governments have been known to be rather brutal
when they feel that their rule is being threatened. For over twenty years, from
1964 until 1985, Brazil was run by a series of military regimes, each more oppressive
than its predecessor. For the most part, anyone that questioned their authority
was either summarily executed or jailed. They were able to accomplish a substantial
number of killings under the aegis of fighting those that they believed represented
a threat to their way of life.
This period has become
know as the time of the “dirty war” However, Brazil wasn’t alone in what it went
through during this time. Their neighbors, Chile and Argentina both had military
dictatorships that stayed in office because of a perceived threat from the communists
and other leftist groups. In those years, many people just disappeared and for
many years, nothing was done in any of the three countries to account for what
had occurred.
Argentina and
Chile were willing to come to grips with the situation and installed what they
called “truth commissions” to investigate and prosecute any egregious circumstances
that were uncovered. However, Brazil, thinking, that it may have had more to hide
than its neighbors caused the government to resist global and local efforts to
redress this smoldering sore. Adherents of the theory that allows sleeping dogs
to lie where they are so as not to disturb them, brought up many interesting arguments
against bringing back awkward memories.
An act that had been
passed by the Brazilian legislature in 1979 gave amnesty against prosecution of
soldiers and military agents for acts of violence along with lamebrain excuses
that many of the papers necessary to prosecute these matters had long since disappeared.
Rather than deal directly with the matter, the Brazilian government determined
that their best course of action would be to pay the families of the victims an
indemnity, and let the matter ride. The military still maintained a lot of power
and the government was not about to raise their ire. This act of cowardliness
seems to have brought an end to one of the gravest violations of human rights
in national history. ()
Slash and Burn Scientists have estimated that the fires that ravaged
Indonesia several years ago had produced three billion tons of carbon dioxide
–considered one of the most damaging greenhouse gasses – into the atmosphere.
This is equivalent to the European Union’s entire CO2 output for the year. (Reuters,
3/12/98) It is strange to note that little was ever effectively done to extinguish
the blazes in spite of all the talk about how serious the situation that it has
become. Brazil showed the world that they had a solution when their farmers in
the Amazon set the forest ablaze to reclaim land for farming. It wasn’t long before
the fires got completely out of control and threatened to destroy the entire jungle.
Brazil was quick to act and did the only thing that was readily available, a quick
call went out to two shamans renowned in the country for the great mystical powers.
It was believed by senior analysts in the Brazilian
Government that two shamans were necessary because of the enormity of the danger.
The foremost and most senior shaman soon picked a site in the Yanomami Indian
reservation and suggested a particular ritual aimed at repelling the smoke and
potentially bringing rain that was quickly agreed upon by officials at the scene.
Most of those present expressed optimism that as soon as the shaman and their
ritualistic equipment could be moved onto the site, all would be well. However, of
even greater importance, local bookmakers were laying a line of 8 to 5 that the
shaman would extinguish the blaze in short order. Now this is the kind of thinking
we believe that they needed in Indonesia. Authorities on the subject housed at
the United Nations were closely monitoring the situation in Brazil. Should shamanism
prove successful, plans are in the works to make this group of witchdoctors part
of a new United Nations’ agency charged with flooding and drought.
Napster Junior Brazil was not only tormented by a rebirth of the James
family in downtown Rio, it was also suffering from an excessive amount of music
piracy according to the International Federation of the Phonograph Industry (IFPI).
They had estimated that 90 percent of all of the music purchased in the country
was illegal and more than fifty percent of that amount arrives on a regular basis
from Paraguay, its friendly neighbor. Most other estimates contend that 95 percent
of all cassettes are pirated in this, the sixth largest music market in the world.
Interestingly enough, Paraguay has tax-free bazaars in which large selections
of pirated music can be purchased in large open markets, usually in the town square.
Countless Brazilian traders travel to Paraguay, make their purchases and load
them on their backs for the lengthy trip home. These sacoleiros (bag carriers)
are so all pervasive that the IFPI estimates that Brazil is second only to Russia
as a market for the purloined music and this industry is making the mom and pop
delivery system one of Paraguay’s largest exports. Paraguay is not a wealthy country and has few resources.
In addition they have a President whose name is Juan Carlos Wasmosy. Juan, aimlessly
talks a lot about any number of subjects many of which that he has no knowledge
of whatsoever. Probably for this reason he has often been accused at times of
having “foot-in-mouth” disease. While talking to an Argentinean newspaper, La
Nacion he said that there was “10 times more corruption” in Argentina then there
was in Paraguay. He was apparently referring to the recent story of
the blind man, Julio Cesar Perez that got a driver's license in Buenos Aires by
paying a bribe of $180. To the consternation of the local drivers testing facility,
it had previously been well known that anything was available at a price at that
facility and a television crew had followed Julio, his guide dog and red cane
to see if he could successfully buy a drivers license.
Horrified viewers were able to watch the entire scene unfold on television,
the next day. Worse yet, the bribe taker, was still on the job when the television
people went back to check on what changes had been made in the licensing process.
However, many believed that all of this noise was
an apparent attempt by Wasmosy to take the heat off himself in some bizarre election
maneuvering he had been engaged in. For the last half century, the Colorado party
has controlled the country. A small but vocal faction of the party was started
to throw its weight around and got Lino Oviedo, former head of the army chosen
as the party’s candidate instead of Wasmosy, a move tantamount to election.
Naturally, Wasmosy did what anyone would have done
in the same situation, he had Oviedo tried, convicted, sentenced and carted off
to jail for leading a clandestine coup attempt against the government. However,
this coup attempt was so secret,
no one ever heard about it and people are still scratching their heads wondering
what had happened. In spite of his conviction, Oviedo remained the popular choice
to lead the country so Wasmosy played his most important card, he had the Supreme
Court confirm the sentence, which effectively checkmated his opposition by knocking
Oviedo completely off the ballot. A triumphant Wasmosy stated in a moment of
extreme pride the fact that; “These are the usual problems of the transition to
democracy which makes me proud, especially since the solution has been institutional.”
He added that of all the varying groups making up the Paraguayan hegemony, “the
armed forces are the ones who have adapted to democracy best.” We want to take
this moment to share with Wasmosy a pride in the way that the country has adapted
to democratic ideals. We feel that they are an example for the rest of Latin America
when it comes to forward thinking and purity of government. Three cheers for Wasmosy.
A Criminal Place The City of Ciudad Del Este is located in Paraguay
at the confluence of Brazil and Argentina, where the magnificent Iguacu Falls
shines its magnificent glory on all three countries. Paraguay his its own trademark
laws and no matter what the name, it can be trademarked once again in Paraguay.
The strangest example of this law is the case of a Paraguayan designer who trademarked
the name Calvin Klein and used it so extensively that the local people were shocked
to find out that he was not Calvin Klein himself. This type of law has caused
legitimate companies such as Walt Disney to avoid the country like the plague.
It has been estimated that 100,000 vendors
take over every available inch of ground in the city, every morning to display
their wares, which include every major designer name of importance. Police are
either stultified by the process or substantially bribed. In either event, they
do not even attempt to close down stalls with obviously black market goods with
excuses like, “how will these people feed their families if we close them down.”
However, economists have estimated that the goods make up a substantial part of
the Paraguayan gross domestic product and the vendors that hawk these goods may
be the single most important voting bloc in the entire country. The wholesale trade, which operates in the
shadows of Ciudad Del Este, is every bit as important as its retail counterpart.
Cheap unmarked goods are shipped into the city from the Pacific Rim and as such
avoid the restrictive quotas usually placed on these type of goods. Additionally,
because the merchandise is not branded, the tariff is negligible.
Designer labels are either imported or printed domestically and slapped
onto the goods for reshipment throughout South America where entrepreneurs take
advantage of tax treaties to avoid duty. Although statistics are hard to come
by, Paraguay does rank as one of the few countries in the world where the black
economy is at least as large its accounted for economy. “Ciudad
del Este is a tax-free center and popular with Paraguayans for its bargains on
consumer goods. The 400-yard bridge is usually packed with trucks and passenger
cars stuffed with brand-new goods bought in Brazil. It is also a great place to
pick up bogus U.S. dollars, antiaircraft guns, rare and endangered animals, weapons
and drugs. The area is also called the “Triangle” – the frontier area between
Argentina, Brazil and Paraguay – a South American Barbary Coast rough-and-ready
area with a Shiite Muslim community of about 6,000 people. Lebanese, Syrians and
Iranians came here in the early 1980s and brought with them a New World cell of
Hezbollah. Hezbollah trains local recruits in the jungles and the main city of
Foz do Iguacu and gets its support from both the local merchants and Iran. To
combat Ciudad del Este’s emergence as the globe’s hub of nastiness, the FBI is
opining an office in Brasilia. But Ciudad del Este makes Waco look like a warehouse
for Mormon pamphlets.” This kind of activity going on right next door doesn’t
do Brazil any good. If the counterfeiting was done within the country’s borders,
at least some commerce would remain inside the country. The system that has been
set up by the Paraguayans, drains industry, taxes and labor from the Brazilian
market. The government of Fernando Henrique Cardoso, President of Brazil became
incensed and under his guidance passed two regulations, one regarding intellectual
property rights, which covers music and films and along with the so called “Software
Law” which addresses the massive pirating that goes on in the software marketplace.
Its regulation was ceded to the taxing authorities,
which set the penalties at four years in jail and 3000 times the value of each
illegal item they produce. Brazil now becomes the only Latin American country
to have a such a piracy law. However, one would wonder what made them wait so
long to enact legislation that is so logical.
That aside, the trade with Paraguay continues unabated.
An
interesting aspect of the Paraguay - Brazil situation is the fact that many years
ago Paraguay being substantially under-populated literally offered bounties
to Brazilians that were willing to move to their country. These bounties for the
most part took the form of Homestead rights and before too long, a great number
of Brazilians took them up on the offer. Thus, a very high percentage of Paraguay
is populated by ethnic Brazilians or at least something close. This is caused
by so many of the émigrés originally being of Nordic blood. Thus, Brazilians are
easily spotted in Paraguay because for the most part they have blond hair and
blue eyes. This
contrasts to the primarily Indian background of the ethnic Paraguayans. As the
flow of Brazilians increased, language, at least that which was spoken near the
borders country's soon became Portuguese as opposed to Spanish and with no indigenous
television, Paraguay was only able to receive their TV in Portuguese. Thus, the
children began to talk that language in the homes. In spite of the fact that the
Brasiguayos (Brazilian émigrés into Paraguay) became citizens of Paraguay more
often than not, most of them continued to use Brazilian money, speak the Brazilian
language, cheer for the Brazilian soccer team and basically do a really bad job
in the assimilation department. What
struck the native Paraguayans as even worse was the fact that these Brazilians
were extremely aggressive and before long controlled a good deal of the country's
wealth. However, in spite of the fact that the Brasiguayos have brought a touch
of prosperity to the country, there is much jealousy and a lot of talk about ethnic
cleansing. Incidents are rife and very often it is necessary to bring in the police
in a situation to restore order. There is a feeling among the native Paraguayans
that if they do not do something about the situation soon, their country will
become a Brazilian State. No one on either side of the fence is particularly happy
about what is going on and how it will turn out.
Banking Brazil uses public sector divestitures indirectly
as a bank. Tax collections are augmented by the timely sale of State owned assets
to expand infrastructure development and lower national debt. Revenue shortfalls
can be made up by carefully culling assets without increasing the tax burden on
the citizens. Inflation has been brought under tighter rein and the economy is
functioning more efficiently than at any time during this century. In the next
three years, almost $60 billion will come into the Brazilian Treasury, thanks
to a carefully orchestrated sale of state owned assets. It is estimated that this
figure will equal or exceed any short fall in the country’s balance of payments.
So while most other countries have yet to learn
how to deal with the nuances of privatization, Brazil has become a most unlikely
expert. Yet this makes their ultimate fall even harder. The pool of government assets available for sale is becoming
extremely limited, and the ongoing fire sale has failed to correct systemic economic
distortions. Bloated bureaucracy, nepotistic civil services and continuing fraud
by the government’s elite persist, although they are sugar coated by the temporary
benefits provided by privatization. The country has only a few more years to eliminate
these inefficiencies, or rampant inflation will again decimate the economy.
While proceeds from state sales have generally been put to good use, investment
in the flawed system will be inadequate to prevent collapse once the sale ends.
“The poverty-stricken lower classes
have essentially seen zero benefits from the past growth of the economy. About
half of all Brazilians are black, and they make, on average, about half of what
the whites make. In Brazil, nearly one-fifth of the population is illiterate.
The country also has one of the world’s most disparate income distributions: 60%
of the national wealth is possessed by one percent of the population, with maybe
50 percent of the population living in poverty. Since World War II, the purchasing
power of Brazil’s minimum wage has been cut in half. Because of widespread inefficiency
and corruption, only 8 percent of the government’s social spending reaches the
poorest of the population. In Rio, poor families have become squatters on empty
lots and in abandoned and partially completed housing complexes. Brazil’s underbelly
is also being corroded by the spread of drug abuse and such diseases as AIDS,
bubonic plague and cholera—a few good reason for a lot of crime.” ()
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