Brazil’s development

Further, with about 4.8 million rural families landless, many poor farmers typically clear land to grow crops like bananas, palms, and maize, and move on to clear new forest after a few years when the land becomes less productive. What is left is often infertile, used for small-scale cattle grazing, or left for waste.
 
Brazil’s forests may also face greater pressure as soya and sugar cane are utilised as biofuels with Brazil now the world’s largest producer and consumer of ethanol. Brazil is set to export even higher levels of soybeans after developing a new variety that is said to flourish in a rainforest climate.

So what does the Brazilian policy mix indicate?

There could be severe environmental problems ahead if Brazil’s quest to make a profit is taken into account. The planet is under great pressure with forest areas being cleared to grow food for an expanding human population.

Although freer trade does encourage peace and prosperity between nations, the initial advantage held by the richest nations in per capita resource terms does suggest that poorer nations may be willing to exploit their people and resources to acquire new levels of wealth which may or may not be dispersed fairly. Such income inequality is a matter for Brazil.

If Westerners want to preserve Brazil’s forests, they may have to compensate Brazil rather than merely buying its products. After all, the rich OECD nations accept a considerable proportion of Brazil’s exports in order to maintain their higher standard of living. In 2007, 16 per cent of exports went to the US, 5.6 per cent to the Netherlands, and 4.6 per cent to Germany, although China received 6.8 per cent.

There are other important points to be learned from the Brazilian policy experience.

First, Australia must do what it takes to preserve a high level of economic activity. This may include promoting renewable energy industries, but also ensuring that taxation levels and labour market flexibility maintain national economic competitiveness. If not, then nations like Brazil (along with China and India) are ready to exploit any new opportunities which will only increase as their own domestic economies expand in terms of consumption policies.

Second, Australia must continue efforts to ensure that wealth generated is distributed fairy and evenly in a way that balances compassion and competitiveness. In other words, any social welfare may need to be streamlined and better targeted with more for the poor and less for others as income rises.

So for those who focus on the destruction of Brazil’s forests, or note Australia’s supposed unequal society, please pay greater attention to the competitiveness of the international economy and remember what we need to do to maintain our way of life. It is going to get a lot harder for Australia to fulfill its economic, social and environmental needs, but we only have to look to Brazil to observe how lucky we still are.

As long as freer trade remains the dominant paradigm influencing international governance, and economic growth with its growing variety of goods and services prevails, economic competition will remain the definitive policy game.