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A purely analytical perception...


BRAZIL

AN ACCIDENT WAITING TO HAPPEN

 

Continued from page 2

PRIVATIZATION WITHOUT PROFIT, OR THE RUSSIAN SYSTEM, GIVE IT AWAY TO THE PEOPLE THAT WERE RUNNING IT BEFORE

Diametrically opposed to Brazil was Russia, which effectively gave away the store shortly after the Berlin Wall came down. So anxious to please the Western financiers were the Russians that through their disastrous coupon system, the prizes of the country were given away. Worse yet, the peasants, not really understanding the value of what they had been given, traded the perceived worthless pieces of paper for valuable consideration such as cigarettes and canned goods. Well-placed individuals were able to buy up the certificate en masse, purchase the state's assets for a pittance and, the same people ran when the music stopped.

ENVIRONMENTALLY UNSOUND AT ANY SPEED

The policies of both the International Monetary Fund and the World Bank, in tandem helped destroy a good part of the planets frail infrastructure. The creation of infrastructure became their "Holy Grail" and uprooting of populations, destruction of species and rerouting of natural resources became a way of life.

The majority of past projects funded by international lending institutions are in four ecologically sensitive areas: agriculture, rural development, and construction of power plants and roads. Expansive projects like hydroelectric dams in Latin American rainforests, government-sponsored migration into previously undeveloped areas, and single cash-crop agricultural and industrial expansion are some of the past projects that have not only destroyed the environment, but have also threatened the existence of many indigenous tribes. These projects have been designed to promote migration and development in remote areas. Unfortunately, many have failed and left the countries they were supposed to help with large foreign debts and environmental problems (2).

For example, in the 1970's and 80's, Brazil used money borrowed from international lenders to promote migration into the interior of the rainforest. The government built large dams and roads that created easy access into the central regions of Brazil. The Brazilian government also offered subsidies to people who were willing to migrate into the rainforest. Many ranchers saw this as an opportunity to increase cattle grazing grounds while receiving tax credits for clearing thousands of acres of virgin forest. All of this development has caused increased foreign debt, runaway inflation, deforestation of Brazil's rainforest and the loss of many indigenous tribes.

Today, after years of development, Brazil has one of the largest foreign debts of any third world country, as well as chronic problems of disease and overpopulation that are linked to environmental degradation. Farmers who could not support themselves in the rainforest have migrated to large cities looking for work, shelter and food just in time for Brazil’s worst drought of the century.

Unicef reported one of the strangest statistics on record when Halim Girade, its health director announced that the Brazilian drought and the corresponding food shortage in the northeastern cities have led to a jump in child prostitution. The effects of El nino have been particularly harsh in this area, Girade reported that; "The situation is getting worse, the rivers and ponds have dried up, and cattle are dying, children are being hired to collect water, which is now 60 kilometers away, and girls are turning to prostitution." It is obvious that Brazil would have been better served by letting its farmers stay at home and dig wells than burning up the Amazon in a futile effort to beat back the jungle.

The World Bank's lending policies have not only been injurious by themselves. As a powerful policy maker, its decisions influence various other lending institutions. The projects it funds and its role in shaping development policy through funding research, training, technology transfer, planning and other forms of support for borrowing nations has established policy for leading institutions for the past 40 years. Unfortunately, this type of development strategy has only hurt third world countries and Brazil may lead the hit parade.

 

BRAZIL ENDNOTES

 

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