Brazil's rise as a global power has been meteoric and surprising. Ten years ago, when Goldman Sachs included Brazil among the rising emerging markets, the so-called ‘BRIC’ countries, the country hardly seemed to warrant the distinction. The economy had been rocked by successive global shocks, including the 1999 real crisis. President Cardoso's second term was ending with sharply lower public approval ratings due to anaemic growth, multiple corruption scandals, rolling power failures, and a host of complaints about issues such as crime and unemployment. The 2002 electoral campaign highlighted the country's vulnerability, as fears of a Lula victory spooked financial markets. Lula ultimately published a ‘Letter to the Brazilian People’ expressing his continued interest in social justice but committing himself to fiscal restraint and macro-economic stability in accordance with the concerns of investors. In short, it seemed that Brazil's economy remained fragile, and that the country faced a bitter choice between social justice and neoliberal orthodoxy.
A decade later Brazil projects a different reality. Strong economic growth, declining poverty and inequality, international prestige (indicated, for example, by the selection of Brazil for the 2014 World Cup and Rio de Janeiro for the 2016 Olympics), the discovery of massive offshore ‘pre-salt’ oil reserves, and internationally recognised, innovative social policies, all underlie Brazil's new status globally. Not surprisingly, Brazil's emergence has generated a great deal of commentary, much of it journalistic and excessive in its praise. Serious, balanced academic examination of the ‘great’ transformation has been less common. For that reason, Albert Fishlow's Starting Over is a welcome addition to the growing commentary on Brazil's rise.
Starting Over begins with an important observation: Brazil has undergone a transformative change since 1985, but the past did not simply disappear. Rather, the country went through a bumpy, difficult process in which the influence of the past ‘eroded over time, as reforms were implemented, and a new generation exerted its influence’ (p. 1). In other words, despite the title of the book, Brazil did not really start over. It went through a laborious process of continuous engagement with the many challenges facing the country. One thing that comes out very clearly is the seriousness and integrity of policy-makers, both bureaucrats and politicians. Policy-makers experimented regularly as they considered economic problems like inflation, fiscal deficits, education, pensions, health, privatisation and regulation, and of course growth, as well as political problems such as constitutional reform, decentralisation and strengthening the judiciary. On the foreign policy front, Brazilian policy-makers wrestled with the challenges posed by Mercosur regional integration, South–South relations, for instance with the BRIC countries or with IBSA (India, Brazil and South Africa), and relations with multilateral organisations, particularly the United Nations, and the United States.
These are the main topics of Starting Over, and for each one Fishlow provides a detailed, thoughtful review of important processes of continuous change that have helped Brazil arrive at the point where it is today. But he is not a cheerleader for the country. What makes his review particularly important and helpful for readers is that it shows not only how much progress has been achieved, but also how much more remains to be done. Brazil is not a developed country yet, and euphoric congratulations conceal the range of serious issues that policy-makers need to confront in order to sustain the progress. Thus each section concludes with a sober and thoughtful assessment of the specific problems that remain. For example, Fishlow documents how ongoing fiscal issues, most importantly unresolved deficiencies in the pension system, continue to push towards deficits, resulting in continuing reliance on inefficient and uncompetitive taxation and high real interest rates. In short, underlying the good news are real concerns about both the macro- and the micro-economy. Diagnosing the challenges facing policy-makers, dissecting the policy choices, sorting through the conflicting data and arguments about how policies have performed, and identifying the unresolved issues are tasks for which Fishlow is singularly qualified, and indeed the book is at its best in its exploration of the individual issues.
The book is at its weakest, however, in the absence of a real, coherent overarching story about ‘starting over’. In other words, the excellent parts are somewhat more than the whole. Fishlow offers a very limited overview of the process of transformation. It began with political renewal and that in turn permitted a renewed focus on growth. Finally, propitious external factors provided a positive environment for both growth and social justice. Perhaps not surprisingly, Fishlow, an economist, is weakest when talking about political renewal. His focus on the 1988 Constitution, judicial performance, decentralisation and regulatory authority feels somewhat piecemeal, more of a collection of topics than a cohesive story about political change. To a lesser extent, one can raise similar concerns about the economic and social topics. While his treatment of each individual topic is very informative, it is not always clear why he chose to focus on these and not others. For example, there is little discussion of the labour market or micro-economic competitiveness or agriculture, or of the role of China (as investor, consumer or competitor), yet arguably they are important parts of the story. It is not that Fishlow should have discussed them: rather it is not clear why he did not. A stronger overarching narrative could help explain how the transformation occurred, why it may or may not continue, and how the specific policy areas on which the book focuses are the policy areas that account for the change.
In the final analysis, this book is an important and worthwhile read both for Brazil experts and for non-experts. Its thorough, thoughtful treatment of a wide range of topics ploughs beneath the euphoria and celebrations of Brazil's emergence and offers insight into the complexities of policy reforms, the continuous process of innovation and experimentation, and the depth of the challenges remaining.
