/ 25 March 2013

Which Brics offer the richest source of ideas?

Which Brics Offer The Richest Source Of Ideas?

Ideas in development used to flow from North to South. Not always amicably – persuading the developing world to buy into the free market doctrines of the Washington Consensus at times resembled the force feeding of French geese for foie gras.

But since the G7 countries slid into their economic black hole of stagnation and austerity, it has become impossible to argue that following the North (in either its Anglo-Saxon or continental European variant) is the only way to unlock the gates of development.

Instead the Brics are now seen by many as the source of new ideas, so South-South exchange is high on the agenda as the Brics summiteers gather in Durban.

But for South African summit watchers, which Brics offer the richest source of ideas? China and India usually get the limelight, both delivering consistently high growth, but both are too big and too different from South Africa to offer that much insight. Russia is more of a model of the things South Africa needs to avoid. No, the most interesting comparison lies on the other side of the Atlantic – Brazil.

Why Brazil? Look at the similarities: in politics, both are continental leaders, emerging in the 80s and 90s from an era of authoritarianism (military rule and apartheid, respectively); both have centre-left governments (in as far as that means anything any more) and shiny new, rights-based constitutions. Socially, both nations are multiethnic, with world renowned social grant programmes but also major problems of crime and violence (whether on the street or in the home); economically, both are globally significant agricultural and mineral exporters.

But while South Africa seems sunk in a mire of joblessness and political infighting, Brazil is full of unprecedented confidence about the future. It is the only country of the Brics group where inequality is falling, and fast. The stats, captured in a new Oxfam briefing, published in conjunction with Rio's Brics Policy Centre, are striking. Over the last decade, the incomes of the poorest Brazilians have risen more than five times faster than those of the richest. In the words of Brazilian poverty guru Ricardo Paes de Barros, "the incomes of individuals in the poorest 10% are growing at Chinese rates, while the income of the richest 10% grows at German rates". Some Brazilian academics put this historic turnaround on a par with the new deal in the US, or Britain's post-war creation of the welfare state.

The fine grain is just as encouraging: women's incomes are rising faster than men's; black people's faster than whites'; the impoverished north-east faster than the rich south-east. Near-full employment is transforming lives, as people move from a day-to-day scrabble for survival into the better paid, more stable world of the formal economy. As labour markets tighten, Brazil's middle classes complain bitterly about having to pay more for maids, and even (horror) giving them days off.

Not that Brazil has become some kind of development nirvana: the quality of state education remains poor, large scale agriculture sucks up state subsidies on a far greater scale than those going to poor farmers; and despite the progress, the country is still in the world's top 15 most unequal countries, twice as unequal as the Organisation for Economic Cooperation and Development average.

Caveats aside, how did Brazil pull this off when South Africa has so far struggled to reverse the rising tide of inequality? While the countries have much in common, two major differences stand out.

The first is that Brazil has built an integrated and effective public administration, working tightly across ministries and between the different levels of a federal, decentralised political system. Alongside this coordination runs a high level of public participation, for example in holding 19 different ministries to account on Brazil's successful Fome Zero (zero hunger) campaign. Its aim was to achieve universal access to food through initiatives such as the government using the farms of poor families to school feeding programmes that in turn fed poor children.

The second element of Brazil's success that South Africa seems to be missing (and by some distance) is full employment. With its more diversified economy and public investments, Brazil seems able to generate jobs in a way that is a distant dream in South Africa, which remains dependent on agribusiness and mining, neither of which generate the employment the country needs. Substantial land redistribution seems essential to tackling the jobs crisis, yet has been systematically postponed by the government in the interests of stability.

While merely trying to transfer policies from one country to another seldom works, this kind of South-South exchange holds huge potential for helping the Brics develop their own solutions to some of the problems such as inequality that continue to plague the old guard of the G7.

Duncan Green is Oxfam's senior strategic adviser. He was in South Africa in March to launch From Poverty to Power: How Active Citizens and Effective States can Change the World (Jacana, 2013)