Image via WikipediaWalter Russel Mead takes a close look at Brazil and asks: What Could Go Wrong?:
This history of boom and bust cycles is how Brazil earned the cruelest of all descriptions — the famous remark that “Brazil is the country of the future, and always will be.” Perhaps.Mead goes on to observe that Brazil's left has a tenuous relationship with capitalist reforms. In his assessment, those reforms are on the line:
Brazil’s current wave of prosperity isn’t exactly a replay of one of the old time commodity booms. It is more broadly based, for one thing. Brazilian production of soybeans, sugar ethanol, and minerals for export to China like iron ore, manganese, niobium (used in making steel) and copper is booming at a time when world prices for all these goods are high. With a more diversified base in different commodities than in the past, Brazil is less vulnerable to a sudden devastating crash in the price of one crop.
The Brazilian left’s cautious and in some cases unenthusiastic embrace of capitalism is all about results. Under both Cardoso and Lula, pro-market policies led to more jobs and better pay for many Brazilians, and provided the government with the resources to improve schools and inaugurate a modest welfare program. As long as pro-market policies hold out the hope of continuing progress for the poor and the lower middle class, Brazil’s left will have strong incentives to stay the current course. But if that progress slows down, all bets are off.