Opinionista Oscar Van Heerden 29 August 2019

Eradicating poverty: Lessons for South Africa from Lula’s Brazil

Brazilian case studies are important for South Africa because we have such similar socio-economic conditions – whatever works here surely can be implemented there and vice versa.

In my continuous pursuit of wanting to find lasting solutions to the socio-economic challenges faced by South Africa, I came across an international relations scholar with a penchant for international political economy, Giorgio Romano Schutte. He is an interesting academic at the University of ABC in Santo André, Brazil.

Like him, I like to look at Brazilian case studies because we have such similar socio-economic conditions and whatever works here surely can be implemented there and vice versa. For instance, when Lula da Silva’s Workers’ Party won the general elections in 2002 and Lula was elected president of Brazil, the economy was extremely concentrated.

Over the next eight years under his leadership, he set out to achieve two critical things. First, to eradicate extreme poverty, and second, to reduce inequality in his country. It is often said South Africa has the highest inequality in the world, with Brazil a close second. And though it is common sense that jobs must be created, the starting point for Lula was fighting poverty and inequality.

For the Workers’ Party, eradicating extreme poverty meant that all families living on less than $35 per household should be uplifted. Hence, the party introduced the “Bolsa Familia” policy, a form of social welfare for families – a family allowance.

Schutte tells us that for any radical plan to work, three basic elements must be adhered to: there has to be consensus around such a plan; then there must be an appropriate policy framework for the execution of the plan; and finally, there has to be the required money and/or resources to facilitate the plan. Without consensus, policy and money, any such ambitious plans will not see the light of day.

Lula set out to find consensus from all the relevant stakeholders in his country. Who could disagree with a fight against extreme poverty? No one did. The fight against inequality was more complex. This is because the fight against inequality begins to create cohesion. In other words, social inclusion cannot only be a fight against poverty but also against inequality.

Lula did, however, throughout this period, indicate to the upper-middle classes that their privileges would not be tampered with, for the time being. For instance, while the Workers’ Party of Brazil felt private medical insurance should be eradicated, they weren’t going to do it just yet. Perhaps we can learn a lesson here with regards to our own NHI implementation.

When we look at our situation here in Mzansi, we too have a broad consensus that the socio-economic ills and injustices of the past must be corrected. What we don’t have consensus around is the “how?” part. How should we correct these past injustices?

There remains no consensus around the land question and private property rights. There is continuous pushback on policies such as affirmative action in the workplace. We have our own form of “Bolsa Familia” in the form of child grants, but some people still say it creates dependency and encourages childbirth (which has been proven false).

In short, we as South Africans seem incapable of reaching consensus on critical plans to redress the past. Brazil tried to get consensus by organising consensus-building conferences at regional, municipal and national levels and engaging with the people on the ground.

Perhaps this is something the president could undertake here.

Schutte says the Brazilian media was not supportive of such a radical plan. Initially, they said the plan would not work because the government was incapable of implementing it, and it would give rise to more corruption. When the plan worked, the media said it created laziness: in other words, charity makes people lazy. The people don’t want to work anymore, they said.

Then, when jobs were created, people started buying food and clothes and had more disposable income.

We too have progressive policies to eradicate poverty and inequality. We have free basic primary healthcare, free basic water and electricity for the indigent, a social welfare system (one of the most extensive in the world) providing for the elderly, foster care, disability grants, child grants, war veteran’s grants and the school feeding system. These policies go hand in hand with a fight against tax evasion. There is still much we have to do in our country to get things right, but the fight continues. We can only learn from the best practices around the world.

So, you can imagine my surprise to learn that Giorgio Romano Schutte will be gracing our shores on 4 September 2019, invited by the Mapungubwe Institute for Strategic Reflection (Mistra) and hosted by the University of Johannesburg. The intriguing topic is “The age of unreason and ignominy – can we judge the people’s judgement?”

The Mapungubwe Annual Lecture 2019 theme will cover such sub-themes as:

  • The apparent decline in global humanist and left politics and the character of current trends in Latin America;
  • The domestic political and social dynamics that influenced the outcome of Brazil’s 2018 electoral outcomes;
  • The impact of ethics as well as safety and security on electoral choices and how the left is perceived on these measures;
  • Democracy in the era of fraught US politics and implications for global economic relations and geopolitics;
  • Possibilities for the poor to protect and advance their socio-economic interests beyond formal political platforms; and
  • The strategic underpinning of the BRICS partnership and whether it can outlive the volatility of politics in the partner-countries and across the globe.

I’m certain it will make for good “food for thought”. And since my field of interests in international political economy is also about wanting to understand international and global problems using interdisciplinary tools and theoretical perspectives, this will be a good lecture I’m sure.

Looking at some of the Brazilian examples and hurdles they’ve had to face, it becomes apparent that by effecting good poverty eradication and inequality-reducing policies, you make more money available. Once this money is in circulation it begins to steer the economy towards growth, but more importantly, the cake enlarges and then there’s more for everyone to share.

We have a long way to go, with policy uncertainty, no consensus and not very much money: will South Africa survive to realise Mandela’s dream for his country, or will it forever remain a dream deferred? DM

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or if you are already an Insider.

BUSINESS MAVERICK

South Africa ‘headed into a deep structural depression’ – Busa

By Ferial Haffajee