‘Socialism of the 21st Century’ Collapses in Brazil. Here’s Why It Failed
|Brazil removed former President Dilma Rousseff|
from power, marking a turn away from her
Policies of "21st Century Socialism." (Photo:
Adriano Machado/Reuters/Newscom via The Daily Signal)
Faced with its disastrous consequences, people in some neighboring countries had already turned the page and moved on. Argentina wised up late last year and installed center-right President Mauricio Macri after more than a decade of misrule by the Peronist Kirchner family.
Earlier this year, Peruvians voted for a 78-year-old center-right economist to get them back on track. And in Caracas, Venezuela, tens of thousands took to the streets demanding the removal of the brutally fascistic regime put in power by one of 21st Century Socialism’s founding fathers, the late Hugo Chávez.
In Brazil, government spending programs championed by Rousseff and her socialist mentor and predecessor, “Lula” da Silva, only managed to pull Brazilians out of poverty temporarily, through cash transfers and welfare benefits that ended up nearly bankrupting the country and plunging it into its deepest recession since the 1930s.
After squandering many opportunities during the era of booming commodity prices, these countries now face the difficult—but necessary—structural reform process to remove the real obstacles that have limited productivity growth and thwarted convergence with more advanced economies.
Many of these reforms are detailed in The Heritage Foundation’s newly published “2017 Global Agenda for Economic Freedom.”
- Stronger protection of property rights and more effective anti-corruption measures.
- Renewed efforts to reduce barriers to trade and investment (e.g. nontariff barriers and nontransparent investment regimes).
- Liberalization of energy markets.
- Reduction of support for massively subsidized state-owned enterprises that are especially toxic breeding grounds for cronyism and favoritism (e.g. Petrobras in Brazil).
Rousseff’s downfall was sealed when it was revealed that she and her socialist PT political party had cooked the budget books to boost vote-buying spending measures in advance of her squeaker re-election victory in the 2014 presidential election. Now, Brazilians have slammed those books closed and opened the door to greater prosperity in a post-socialist Latin America.
James M. Roberts is the Research Fellow in Freedom and Growth at The Heritage Foundation's Center for International Trade and Economics. Roberts' primary responsibility is to produce the Index of Economic Freedom, an influential annual analysis of the economic climate of countries throughout the world.
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