From issue: Impact Investing: Profit Meets Purpose (Fall 2011)
Dilma's Education Dilemma
Dilma's dilemma: spreading the benefit of windfall oil profits without undermining growth.
More than anything, Brazil’s continued economic growth depends on a well-educated workforce. While Brazil is one of the three fastest-improving countries in terms of student test scores among the 65 countries that take part in the Program for International Student Assessment (PISA) tests, educational reform is still a top priority.
Despite the advances, Brazil suffers from high illiteracy rates and—in an already tight labor market—from the lack of a technically qualified workforce to meet the demands of a modern economy. If these aren’t addressed, Brazil will not be able to field a competitive labor market in future generations or fulfill its economic potential. President Dilma Rousseff understands this: “Only when there’s progress in the quality of education can we form young people that are[...]able to lead the country to the full benefits of technology and knowledge,” she said in a February 2011 speech at the Brazilian Senate.1 But the challenges endemic to the system represent formidable hurdles.
In recent years, the government’s response has taken a different direction from the neoliberal approach to education reform—such as privatization and bureaucratic downsizing—charted by the administration of Fernando Henrique Cardoso (1994–2002). The Cardoso-era policies would have severely constrained the government’s ability to invest more in education today.
In contrast, the administration of Luiz Inácio Lula da Silva (2002–2010) used revenue from the burgeoning oil sector to address the country’s educational needs. This was partly accomplished through the creation last year of a state-owned enterprise, Pré-Sal Petroleo SA, which performs a dual role of managing oil production and administering a new social fund for education and other anti-poverty programs. On the presidential campaign trail, Rousseff called this social fund Brazil’s “passport” out of poverty and inequality.2
There was nothing radically leftist about this approach. Brazil traditionally has maintained state ownership of its petroleum resources, along with a commitment to use the revenues to enhance social welfare.
Like Lula, President Rousseff is equally committed to investing more in education policy. She has adopted and even broadened her predecessor’s strategy of extending access to education to the poor. In June 2011, as a sign of her commitment, the president launched an expansion of Bolsa Família through an initiative called Brazil Sem Miséria (Brazil Without Misery), which aims to eradicate poverty by 2014. The program increases the amount of the monthly stipends given to the poor through Bolsa Família, with the hopes of reaching 800,000 more families by the end of 2013.3 It also focuses on improving access to public services—such as health care, running water, electricity, and education—and achieving “productive inclusiveness” by giving the poor the economic means to overcome poverty through vocational training, microcredit and jobs.4 In total, this new program anticipates spending $13 billion over the next four years to help the 16.2 million Brazilians living in extreme poverty gain access to a myriad of social services. Like Bolsa Família, families will receive monthly payments upon the condition that their children attend school.
But a question remains: at a time when the government is trying to limit public sector spending, can the president achieve her educational goals while reassuring foreign investors that she will not drain resources from other sectors of the economy? Because Dilma is using monies from the oil sector to finance education, a fear persists that she will use revenue from other areas of the public budget to continue funding education and/or other social welfare programs—instead of applying this revenue to deficits. Still, at this point the president seems to be showing a clear commitment to fiscal stability while deepening state control over oil...
1. Dilma quoted in “Dilma asks for collaboration to combat poverty and carry out reforms,” Portal de Noticias, Senado Federal. http://www.senado.gov.br/noticias/agencia/internacional/en/not_1214.aspx
2. Diana Kinch, “President Rousseff Says Pre-Salt Oil is Brazil’s ‘Passport’ to Future’,” The Wall Street Journal, January 1, 2011, <http://online.wsj.com/article/BT-CO-20110101-700463.html> (Last accessed October, 2011)
3. Jean-Pierre Langellier, “Brazil Declares War on ‘Chronic Poverty,’” The Guardian Weekly, June 7, 2011.
5. Organization for Economic Cooperation and Development (OECD), 2009, Program for International Student Assessment (PISA) <http://www.oecd.org/department/0,3355,en_2649_35845621_1_1_1_1_1,00.html> (Last accessed October, 2011)
6. Instituto Brasileiro de Geografia e Estatística (IBGE), Síntese de Indicadores Socias 2006 <http://www.ibge.gov.br/lojavirtual/fichatecnica.php?codigoproduto=8877> (Last accessed November, 2011). Also in Sonia Maria Rummert, “Education of the Young and Adult Workers in Brazil in the 21st Century: The ‘New’ that Reiterates the Old Deprival of Rights.” Educational Sciences Journal (2) (January-April, 2007): p. 36.
7. Kent Page, “Improving Quality Basic Education for Children in Brazil’s Amazon Region.” UNICEF, 2006 <http://www.unicef.org/infobycountry/brazil_36077.html> (Last accessed Novmber, 2011)
8. The Economist, “Education in Brazil: No Longer Bottom of the Class,” 2010, <http://www.economist.com/node/17679798> (Last accessed November, 2011)
9. Japan Bank for International Cooperation, "Sector Study for Education in Brazil," November, 2005.
11. OECD, “Education at a Glance: OECD Briefing Note for Brazil;” 2008. (Last accessed November, 2011)
12. Alexei Barrionuevo, “Educational Gaps Limit Brazil’s Reach.” The New York Times, September 4, 2010, <http://www.nytimes.com/2010/09/05/world/americas/05brazil.html> (last accessed November, 2011)
14. Danielle Nogueira, “Brazil: Educational System Threatening Economic Growth,” March, 2011 <http://www.infosurhoy.com/cocoon/saii/xhtml/en_GB/features/saii/features/main/2011/02/03/feature-01> (Last accessed November, 2011)
16. Ibid. See also The Economist, “Still a Lot to Learn,” 2009, <http://www.economist.com/node/13782570> (Last accessed November, 2011)
17. Andrew Fishman, “Petroleum in Brazil: Petrobras, Petro-Sal, Legislative Changes & the Role of Foreign Investment.” Working Paper, Center for Latin American Studies, George Washington University, November, 2010, <http://www.gwu.edu/~clai/working_papers/index.htm> (Last accessed November, 2011)
18. Danielle Melo, “The Controversial Rush for Pre-Salt,” April, 2010 <http://www.infosurhoy.com/cocoon/saii/xhtml/en_GB/features/saii/features/economy/2010/04/13/feature-02> (Last accessed November, 2011)
19. Oil & Gas Financial Journal, “Brazilian government announces development model for pre-salts,” Septmber, 2009 <http://www.ogfj.com/index/article-display/1421347658/articles/oil-gas-financial-journal/markets/strategies/brazilian-government.html> (Last accessed Novermber, 2011). Also in Fishman, 2010.
20. Susana Moreira, “Dilma Rousseff and Brazil’s Oil Sector.” Issue Brief, the Americas Society and Council of the Americas Energy Action Group, 2011, New York, NY. Also in Melo, 2010.
21. Andre Soliani and Mark Lee, “Foxconn in Talks on $12 Billion Brazil Plant, Rousseff Says,” Bloomberg BusinessWeek, April 13, 2011, <http://www.businessweek.com/news/2011-04-13/foxconn-in-talks-on-12-billion-brazil-plant-rousseff-says.html> (Last accessed November, 2011)
22. Veja, “Em Vitoria, Dilma commenta sobre pre-sal,” August 20, 2010, <http://veja.abril.com.br/blog/eleicoes/veja-acompanha-dilma-rousseff/em-vitoria-dilma-comenta-sobre-pre-sal/>; and Diario do Grande ABC, “Dilma: Pre-sal vai acelerar reducao da probreza,” September 29, 2009, <http://www.dgabc.com.br/News/5769476/dilma-pre-sal-vai-acelerar-reducao-da-pobreza.aspx> (Both last accessed November, 2011)
23. Jonathan Wheatley, "Dilma Rouseff interview," Financial Times, September 7, 2009, <http://www.ft.com/cms/s/0/6a590a82-c1bb-11db-ae23-000b5df10621.html#axzz1KYLHM06a> (Last accessed September, 2011)
24. Brian Winter and Natuza Nery, "Dilma Rousseff: Brazil’s ‘Automatic Pilot’”. Reuters, September, 2010, <http://www.reuters.com/article/2010/09/23/us-brazil-election-rousseff-idUSTRE68M1SA20100923> (Last accessed November, 2011)
26. Brian Winter, “Dilma Rousseff takes charge in Brazil, nods to Wall Street.” The Christian Science Monitor, January 3, 2011 <http://www.csmonitor.com/Business/Latest-News-Wires/2011/0103/Dilma-Rousseff-takes-charge-in-Brazil-nods-to-Wall-Street>; and The Economist, “Brazil’s Fiscal Policy: How tough will Dilma be?” February 17, 2011, <http://www.economist.com/node/18178315> (Both last accessed November, 2011)
27. Ibid., Brian Winter and Natuza Nery, 2010.
28. Susan Schaller, “Lula’s Growth Acceleration Program: The Best that Brazilian Government Funding Can Buy?” Research Article, Council on Hemispheric Affairs (COHA), June, 2008, <http://www.coha.org/lula%E2%80%99s-brazilian-growth-acceleration-program-the-best-that-government-funding-can-buy/>; and Albert Fishlow, “Brazil: What’s Next?” Americas Quarterly, Winter, 2011 <http://www.americas-society.org/articles/2943/Brazil:_Whats_Next_/> (Last accessed November, 2011)