New Delhi (India), January 26, 2004 (Agência Brasil - ABr) - Brazil is on the right path to improve the distribution of income. This opinion was expressed by the director of the World Bank in Brazil, Indian economist Vidon Thomas, who is accompanying President Luiz Inácio Lula da Silva on his trip to New Delhi. According to him, the government's investments in basic education, Social Security reform, and greater efficiency in social spending can have a significant impact on the distribution of income of Brazil in the next five years.
Thomas claims that the "Washington consensus," according to which the adoption of some basic rules lead to economic development and the natural solution of social problems, proved incorrect. The best path, in his view, is the current "Brasília consensus," with the government keeping fiscal discipline at the same time as it promotes social programs to distribute income.
The World Bank economist says that poor countries have no way to develop if they count only on economic growth, as is the case of India, which has been growing at an average annual rate of 6% over the last decade but has over 250 million people who live in extreme poverty, without enough to eat. It is necessary, according to him, that countries also adopt programs to promote income transfer, such as education, micro-credit, and greater efficiency in social spending.
Thomas considers it reasonable for Brazil to invest 15% of the Gross Domestic Product (GDP) in the social area. "This is no small sum in comparison with other developing countries," he says. The problem, in his opinion, is that 8% of this total goes to Social Security, which does not transfer the benefits to the poorest segments of the population. "Only a small part goes to the poor," he argues.
The World Bank economist believes that, through a better division of benefits, Social Security reform will have a positive impact on income distribution in Brazil. According to him, basic education - which has been extended to 97% of the population over the last decade - has also contributed to increasing people's income.
"Income distribution in Latin America hasn't changed in the last 100 years. But in Brazil there was a slight improvement as a result of efforts in basic education between 1994 and 1996," Thomas explains, also pointing out the improvement in other indexes, such as infant mortality and life expectancy, in the last ten years.
The expert acknowledges that Fernando Henrique Cardoso's Administration propelled these changes, but he doesn't agree with the criticisms that Lula is merely copying his predecessor's social policy model.
"The social area demonstrates a continuation of some policies. The expansion of the Family-Grant program is based on the experience of the School Grant and other programs that produced results over the last ten years. But Lula's Administration, at the same time as it maintains fiscal discipline, is assigning much greater urgency to the social side to improve income distribution," he says.
ADVICE TO GENRO
In the World Bank director's opinion, the mission of the new Minister of Education , Tarso Genro, is to improve the quality of basic education and invest in secondary education, where there is a very big deficit. But, in his view, the private sector must also participate in the effort.
"In South Korea, the expansion of secondary education was successful, not because of the government, but because the private sector participated by financing schools," he adds.
In Thomas's opinion, the private sector must act as partner to the government, because business activities only stand to gain from a more qualified labor force. (DAS)
