Another question from Tim out in Madrid:
Q: What makes Brazil so special? We often hear Brazil is a leader in sustainability, how does Brazil’s growth differ from the rest of the BRIC countries?
A: The term BRIC was coined by then Goldman Sachs director Jim O’Neill in 2001, predicting the rapid growth of Brazil, China, India, and Russia. Now 11 years later, this prediction appears to be spot on. However, of all of the BRICs, I would argue (and many would agree) that Brazil’s growth model has been the most “sustainable”. Sustainability can mean a lot of things, in this sense I believe Brazil’s growth has been the most environmentally, economically, and socially sustainable. Brazil would probably be recognized as the most popular BRIC, evidenced by both the 2014 World Cup and 2016 summer Olympics.
Brazil’s environmental sustainability comes from two main sources, hydroelectric power and sugar cane ethanol. Over 90% of Brazil’s electric energy is produced by hydroelectric means. Sugar cane ethanol, which is much more cost-effective to produce than the corn ethanol produced in the U.S., accounts for 50% of light vehicle fuel demand, and is expected to account for 80% by 2020. Brazil is also the world’s largest ethanol exporter, accounting for 90% of the world market.
China actually produces more renewable energy than Brazil. The problem is it also produces much more coal and imports much more gasoline than Brazil. China accounts for a whopping 49.5% of world coal production, with India at 5.6%, Russia at 4%, and Brazil at .1%. Among proposed new projects, China (363) and India (455) have far more than even Russia (at 3rd with 48) and Brazil (not even on the list)—2/3s of new coal projects will be in China and India. China is also the leading oil importer of the BRICs at over $200 billion a year, with India ($150 billion) in second, and Brazil in third (at around $35 billion). Russia is in the unique position of being an oil exporter, which is financially more sustainable, but not environmentally more sustainable.
Other than energy, Brazil seems to be the best of the countries to live in. Russia and Brazil are numbers 1 and 2 in both GDP per capita ($15,600 a yr versus $11,300 a year) and higher HDI (human development index, the closer to 1 the better, a measure of overall standard of living) (Russia = .755, 66th ; Brazil =.718, 85th). There is something about Brazil that makes it seem like a more appealing place to live, for me, than Russia. I guess maybe the weather?
Having said that, things are not always sunny in Brazil. Brazil has the highest income inequality of the BRICs, a legacy from colonial times when the indigenous people were treated like second class citizens. Today, this issue has manifested itself into a dualistic economy, a modern growing urban economy and a stagnant subsistence rural economy. While government reforms aim to correct these issues, this is no easy task. Perhaps unsurprisingly, violent crime is also the highest out of the BRICs in Brazil, with over 40,000 confirmed homicides in 2010.
Brazil has been a model of sustainable development, weathering the most recent global financial crisis very well. Continued leadership in renewable energy production and exports ensures a long term sustainable source of revenue. Commitment by the government to education reform and adequate social spending, along with falling unemployment, should help reduce income inequality and violent crime in the country. If the government can commit ample resources to fixing the backwards rural parts of society, then Brazil has a truly bright future.
All of the BRICs have their comparative advantage, and will therefore continue to grow going forward. China has the world’s largest population, and therefore workforce and customer base. India is the world’s largest democracy, and therefore will always be an important bridge between the developed and developing world. Russia has very close ties to European markets, and its natural resources provide a constant stream of revenue for the country.
In terms of sustainable development, however, I believe Brazil takes the cake.