BRICs x PIGS: many letters, few truths

As you must know, the BRICs and the PIGS involves nine countries: Brazil, Russia, India, China, Portugal, Ireland, Italy, Greece and Spain. Coincidently, my life has been influenced a lot by some of these countries. Except by Russia and Ireland, I have been in all the others, and more than that, had been deeply exposed to some of them. I am Brazilian, I am Portuguese, I had lived in Spain and in India for quite a good time and had visited Greece, Italy and China before and after my MBA (which mean, before and after I understood what capitalism was about). I believe that a top MBA is one of the best ways to understand global capitalism today, but this comment has enough implications for another post.

Well, although it may look like the BRICs are slowly “dominating the world” economically and the PIGS are symbolic representing the collapse of the political dominance of the “developed” economies, I think these fashionable terms created by economic analysts and economic journalists in the comfort of their offices in New York or London do not represent what is going on for real in those countries. What happens is that people like believing in simplistic analyses and stereotypes. We mentally prefer to “solve” complex problems by limiting them to a small and simple definition in our heads.

However, the truth is that you find some of the poorest people in the world by visiting countries like Brazil, India, China and their neighbor countries. People that do not have access to clean water, to basic health treatments, to the minimum contact with formal education or justice. In Brazil, for example, I dare to say, perhaps exaggerating a bit, that justice does not exist. You can kill whoever you want with very little chance to be arrested. In 2009, the country broke all its records of violence in all levels, at least 25% of my closest relatives had been robed in 2009. Politicians do whatever they want and keep accumulating fortunes in Switzerland without any reaction of the people. We look anesthetized by decades or even centuries of political rape. The growth we observe today is conjectural, nothing has really changed. Today’s Brazil is a huge “bubble” that can explode right after the Olympic Games of 2016 if we make to get there.

China is a dictatorship where you are simply arrested and killed if anybody in the government does not like you. Of course people can live with that and enjoy economic growth but at the bottom of their souls they are not happy of living under that circumstances. I believe that after famine, one of the worst things someone can face in the world is the lack of freedom. Freedom to walk around, to explore your country, to read whatever you want and debate. In the west (Europe and North-America) we tend to take freedom for granted but unfortunately this is not what we see in a large portion of the BRICs.

In the other hand, in the “poor” countries of Italy or Greece, people have absolutely high standard of living in all areas. They may have to own one car instead of three, or wait two hours more in the hospitals to be attended, or even eating less in restaurants, but they still have enough social and economic “fat” to burn and use their education to find out a solution to their economic problems. In Spain – what a pity – there are 500 thousand homes empty due to the real state bubble. In Brazil or India, there are many millions of homes lacking. Maybe Spanish people could ship the homes they built in excess to Brazil, India and China. What do you think? Sometimes these “poverty” and endless crisis in the developed countries look to me as a global tale to make immigrants stop moving there.

Continue reading

Advertisements

Crisis: The big one

I am not a pessimistic type of person. However, we had quite a big crisis in the world last October (2008) and I thought world top politicians and intellectuals would take the opportunity to start a debate to improve international governance of the world. I though they would see that our Economy based in permanent growth is not sustainable anymore (in practical terms, not in ecological ones, I mean) and that this model is dated.

Capitalism was put in jeopardy last October, people got crazy for months, presidents from all over got together, helped companies in trouble and that was it. Nobody dared to propose a solution or to open a valid debate among opinion makers on how to solve this kind of problem, typical in capitalism but now typical in the world.

Politicians are politicians anywhere. In the west (Europe and Americas) they are so limited by their congresses and bureaucracies today that they cannot reform anything without a huge coalition. They do not have power to change things as different type of government become institutionalized (this is good) and people get scared to reform things (this is bad). This crisis was a perfect excuse to make things happen, at least partially. What will happen, then?

The way I see the world, I strongly believe that despite of having room for growth in Asia, Africa and Latin America, we will have another huge global crisis in the future due to the fact that people won’t need to buy so many things in some years. People are not only changing their behavior towards buying goods, but goods are also getting unneeded. What will happen with construction companies when all roads, subways and houses get done? What will happen with refrigerator factories when everybody gets one? What will happen with fashion industry when everybody gets sucked of filling up their wardrobes? I don’t know the answer but definitely there will be not enough jobs to everybody. Like the “Easter Island” syndrome, where natives consumed all resources until the end of their civilization we will face a crisis provoked not by the end of resources but by the end of meaning in endless consumption.

The next crisis or the next following the next will be called something like “the big one”, 1929 will look like joke if our leaders do not move.

By clicking on “continue reading” you will get this text in different languages.

Continue reading