Sunday, February 05, 2012

Why can't we be Brazil?

An article in The Guardian Weekly, January 20, has a shocking piece of information. It says that birth rate in Brazil, has dropped from 6.15 children per woman in 1960 to less than 1.9 today. This is lower than the US at 2.0 per woman and is the lowest in South America. It is particularly shocking because Brazil is largely Catholic and the church frowns on birth control. The fertility rate has fallen in cities such as Sao Paolo as well as in rural population deep in the Amazon villages and in the vast farming belt. This has apparently been brought about by migration to cities, expansion of female workforce, better healthcare and TV soaps which show small rich families. Brazil has just 192 million people in a country which is 5th largest by land area. Its GDP was $2.422 trillion in 2011 and per capita income $ 12423, much higher than India. In contrast to India where ministers are obsessed with growth rate Brazil's economy grew 8.9% between 1970-79, 3% from 1980-89, 1.7% from 1990-99 and 3.7% from 2000-08. Average growth per quarter from 1996-2011 was just 0.8%, the highest being +4.50% and the lowest -4.20%. How has Brazil climbed to become the 6th largest economy in the world ahead of the UK when its growth rate has been so low compared to that of India and certainly to that of China which has averaged 10% over the last 2 decades. The reason obviously is the low population of Brazil. China was quick to recognise that and started its one child policy in early 1990s and has managed double digit growth without significant inflation until now. Both Brazil and China have near 100% literacy. Sadly in India low class politicians want to ensure a large population of abjectly poor, illiterate aam aadmi which they term " vote bank ". This allows them to win elections by doling out bribes in the form of free electricity, cheap food grains, color TVs and other goodies with taxpayer money. Illiterate people are also easy to fool with caste, religion and other lies. Rewarding people for having children results in increasing numbers of poor so that 45% of children are malnourished, more than in sub Saharan Africa. Brazil has passed a Law of Fiscal Responsibility which controls expenditure of federal, state and municipal governments allowing it to reduce taxes by 30% on manufactured products. Here, fiscal deficit is totally out of control and the scoundrels are forever looking to increase taxes which reduces consumption and brings growth down. Brazil's president was Lula, a trade unionist while we are saddled with a World Famous Economist. How unfortunate we are!

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