Political and Social Challenges of Brazil

Question: Discuss about the Political and Social Challenges of Brazil. Answer: Introduction The report aims to discuss the economic challenges, political challenges and social challenges faced by the country Brazil. These issues are discussed in detail so as to understand the current situation of the country. The report discusses the obstacles faced by Brazil due to the economic, political and social challenges. The objective is to provide an overview of the country stability by linking all the three issues and also understanding their impact on the country in terms of its development. The report further discusses how these challenges can be overcome through policies and measures. The policies and prescription would help the country in its growth and development. Economic Challenges The country is under a severe recession since 1930. The country is facing many economic issues such as inflation, high interest rates, unemployment etc. The country saw a rise in inflation to 11.2 percent during the first quarter of the year 2016. The overall inflation was 10 percent in the year 2015. The country has been officially under a recession since 2014. Its increasing inflation rate has led to an economic slowdown. From 2011-14, the economy has acknowledged a slow rise of 2.2 percent every year. The rate is very slow as compared to its neighboring countries. The value of GDP was contracted by 3.8 percent in the year 2015 (Candia, 2016). The country is facing a persisting problem of employment since 2014. Unemployment rate has almost doubled in the year 2016 and has reached a value of 11.2 percent from 5.1 percent in 2014 (Gillespie, 2016). The country has over eleven million unemployed people. The root cause of this rising recession in the country is crashing of the prices of commodities in the year 2015. The countrys fiscal revenues are decreasing and the country has acknowledged huge deficits during the year 2015. In 2015, the deficit was approximately 11 percent of the gross domestic product. In 2014, the countrys budget deficit inclined to the value of 6.75 percent of gross domestic product (The Economist, 2016). The country is going through an economic instability with its growing deficit and debts. The gross debt to gross domestic product ratio reached a value of seventy percent from sixty five percent. The overall economic instability of the country has led to many obstacles in the further development of the country. Brazil has not been able to pay its loans for the past three years. The high interest rate of 14 percent is posing a threat to the country. The banks have reduced the interest rates to encourage the consumers to borrow loan at a subsidized rates. The lending percentage increased from 40 percent to 55 percent in 2010. The high interest rates have spiked inflation which has gone beyond the benchmark limit set by bank. The high unemployment rate has caused the wages to decline and the people are unemployed in the major metropolitan cities. Again, in order to improve the existing situation government took many measures which have again spiked inflation rate which is a major cause in hindering the countrys growth (The Economist, 2016). Political Challenges Brazil is going through a political instability and there are four main political challenges that the country is going through. The first challenge is the involvement of the government officials in the Petrobras scandal. The second challenge is Workers Party. The third challenge is that a legislative issue is being stuck at the hands of few congressmen. The last but not the least challenge is the weak leadership of Dilma which has slowed down the economy of the country. The country is going through a protest by the citizens with over two million people on the roadside. The country has maintained its stability over the years due to the partnership between executive power of PT and PMDB. PMDM gained its power by opposing the key issues which were addressed by the Congress (Sennes, 2015). Dilma Rousseff became President for the second consecutive time in 2014. After the elections she has been facing allegations for playing the government accounts. The allegation has raged the opposition party and forced the people to gather on streets across the country. The issue has led to the political crisis in the country and has revived old political rivalries (BBC News, 2016). Social Challenges Brazil faces a number of social challenges and the country has been working hard to overcome them. Brazil faces the problem of poverty, education, unemployment, violence and crime and health. Poverty: The major of the countrys population is facing the challenge of poverty. There are millions of people living in slums in the country. Around fifty percent of the population does not have access to basic resources which are essential for a living. The poorest people of the country receives a very meager amount of the countrys earning which is even less than 1.2 percent of the nations earning. The country has taken initiatives such as Zero Hunger which has been created with an objective of giving food to the citizens. Bolsa Familia is another government initiative which lessened the inequality in the income by 5 percent (Brazil, 2016). Education: In spite of providing free education to all, the country faces the problem of illiteracy. The main issue is that students do not attend classes because they are burdened with the responsibility of earning at a very young age. Children at the age of 10 become a provider for their families. Apart from that, the institutes are not well equipped with resources. There is a scarcity of teachers, learning resources in the schools which are poorly constructed. Due to this scenario, major populations of the children who are below eighteen are illiterate (Brazil, 2016). Unemployment: Since there is no proper mechanism for providing the education to young children therefore the country faces a severe problem of unemployment. In spite of a number of job vacancies in the country, there are many unemployed people in Brazil. The major population chooses to work as a skilled labor at factories, construction sites etc without any agreement between the two parties. Thus, there is no provision for a permanent employment for these kind of people (Brazil, 2016). Violence and Crime: The country has a very high record of violence and crime. Due to high poverty and illiteracy people are forced to commit crime. The police also has not been able to handle the situation tactfully (Brazil, 2016). Health: The country lacks proper medical system and infrastructure for the people. The financially equipped people have options to go for private medical care but the people with low income areas do not have access to proper medical facilities. The hospitals are overcrowded and do not have adequate medicines for the people (Brazil, 2016). The social challenges hinders the growth of country because when the population of the country would not have access to basic amenities then the country would not acknowledge growth in any sector. Economic Policy Prescriptions In the economic challenges, the report discussed that Brazil is facing a downfall in its economy which is a result of the implementation of unhealthy policies by the government. In this section, the report shall discuss how Brazil can overcome these economic challenges. Brazil needs to administer countercyclical fiscal policy system in order reduce its expenses during the crisis. Fiscal policy plays a vital in contributing to the economic growth of a country. The country needs to establish a vigorous countercyclical public investment budget in order to contribute to the development of the country. This would help to create demand for public investment and increase the work efficiency which would support to minimize the cost of manufacturing (Arestis Terra, 2015). The growing expenses during the time of recession led to the downfall of the economy. In order to come out of this situation, the government should uplift the taxes that are being charged on short termed financial assets. This would help the government by increasing the amount of tax collection and minimize the cost of investment (Leahy, 2015). Brazil needs to abandon Inflation Targeting Model because the countrys inflation is affected by manufacturing cost, changes in exchange rate and the prices which are managed by the government. An increase in interest rate only affects the exchange rate of the country and thus, an Inflation Targeting Model is not a preferable model to provide stability to the countrys economy (Arestis Terra, 2015). The country needs to control its interest rate of the central bank which requires monitoring the short term speculative foreign capital (Leahy, 2015). Political Policy Prescriptions Brazil is facing political instability and requires reforms to improve its political situation. The country is going through a number of scandals and politicians faced with severe allegations. The country needs to create political reforms so as to remove the corruption from the country. The Supreme Court has put a stop to the corporate donations which needs to be implemented in the country. The country should go for district representation as opposed to the current proportional system in which the voters have no knowledge of the candidates background and achievements (Leahy, 2016). The country should ban the coalition formation which provides power to individual parties through an alliance. They form a coalition in order to be able promote themselves more freely and liberally (Leahy, 2016). Thus, in order to become a corruption free nation, Brazil must adopt these changes. Social Policy Prescriptions Social reforms would uplift the country in terms of political and economical growth. They would provide the citizens access to the basic amenities and resources. Also the health of the people would be ensured which would increase the productivity and ultimately economy of the country will grow. Poverty: Poverty needs to be eradicated which would require government support and social reform policies. The countrys government would have to make sure that the people living in poverty have access to basic amenities and sustainable livelihood. Policies should be developed to provide protection to the poor people of the country and alleviate their status. Policies should aim at empowering these people by giving them opportunities to work by giving them access to the required resources. Entrepreneurial opportunities should also be provided to these people so that they can also become self dependent. The country should aim to work with the NGOs and other interested donors to increase their contribution towards poverty eradication (Sustainable Development Knowledge Platform, 2016). Education: The government must ensure that the children attend their schools regularly and do not miss classes. The policies could created that would support education and children once again start attending their classes instead of taking up family responsibility. The government could come with some initiative such as providing basic amenities and resources to the complete family of the students in order to ensure that children attend their schools and the free education is being imparted properly (Sustainable Development Knowledge Platform, 2016). Unemployment: The government needs to create job opportunities for the unemployed people through government schemes. The government can liaison with the third party to provide jobs to the unemployed people (Brazil-US Business Council, 2016). Health: Health camps should be conducted on regular basis so as to provide free check up and medicines to the citizens of the country (Brazil-US Business Council, 2016). Violence and crimes: The crime rate would automatically come down if the poverty is reduced and people have jobs in their hands (Brazil-US Business Council, 2016). Conclusion The report has thoroughly discussed and analysed the economic, political and social challenges faced by the Brazil. The allegations charged on the countrys president have created a political instability in the country and the government decision to stabilize the economy has worsened the situation. Brazil is facing poverty, health, unemployment and violence and crimes social challenges which hinders the growth of the country. The report tries to suggest way to improve its current situation through economic, political and social policy prescription. Economic policy prescription suggests that the country should change its Inflation Target Model to overcome the current challenges. The political policy prescription suggests that the country should go a district representation and change the current proportional system in order to create a corruption free country. The social policy prescription suggests that the country needs to take steps and initiatives through liaison to eradicate the problem of poverty, unemployment, health and violence and crimes. List of References Arestis, P., Terra, F.H.B. (2015). Economic Policies to Improve the Current State of the Brazilian Economy. The Research Gate. 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