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Are the Bad Old Days Coming Back to Brazil?


More than a hundred thousand protesters gathered in big cities across Brazil yesterday after the government raised bus fares across the country. As in Turkey, the protests spread rapidly and soon turned violent, tapping into a broader discontent around the country. Part of the state legislature in Rio de Janeiro was set on fire. NYT:

While the hike came at a time of growing concern over inflation, which remains high even as economic growth has slowed considerably, the anger over the increase also reflects broader indignation over public transportation systems in São Paulo and in other large cities, which are plagued by inefficiency, overcrowding and crime.

Problems with inflation are nothing new for Brazil. For much of the late 20th century, the government repeatedly tried to inflate its way out of its problems when ambitious attempts at state intervention failed, a cycle that finally ended when the government passed a plan that stabilized the currency in 1994. Indeed, former President Lula was so successful in part because he continued this policy: He understood that the poor were the hardest hit by runaway inflation and worked for low inflation rates throughout his terms.

But now inflation is creeping back up, and Brazilians are scared. It’s still too early to say for sure, but there are some disturbing signs that the country may be returning to the bad old days of misguided state planning and runaway inflation. No wonder they’re taking to the streets.

[Image of Brazilian Flag from Shutterstock] 

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  • Ulysses4033

    Perhaps Brazil should join the Eurozone.

  • ojfl

    Part of the problem is of Mr Lula’s making. One part of the inflation is due to government’s overspending as explained by Celso Ming in the Brazilian newspaper Estado de São Paulo. Presidente Dilma just continued the policy.

  • Atanu Maulik

    Brazil continues to remain the nation to look out for the future….. How long have they been trapped in that state ?

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