What can SA and Brazil learn from each other?

While each BRICS country is unique, parallels are often drawn between South Africa and Brazil. Both have high income inequality, high crime rates, sophisticated first world sectors that run in parallel with very under-developed third world sectors, a history of dictatorial regimes, similar social issues and vast natural resources. Both suffer from a general level of social discontent and negativity with respect to the ways they are managed as well as their prospects.

 

With apparently similar problems, South Africa seems to be increasingly – and I believe erroneously – looking to the Brazilian social and economic model for solutions. While we have much to learn from Brazil, South Africa is fundamentally different to that country and I think it is worth discussing some of these soft differences.

 

However, first let me state that I am making simplified generalisations: Brazil is vast and diverse. It is a federation in which each state has a unique identity. In fact, it is larger than the continental USA, and any generalisations will, no doubt, be countered by many exceptions. Although not as expansive, South Africa is equally complex. The generalisations below are, however, based on my experiences as a South African who has married into a wonderful Brazilian family and travelled frequently to Brazil for both business and pleasure.

 

The first, and I believe most important differentiator, is that Brazil has built a common national identity. Irrespective of race and class, there is a common community in language, custom, music, and social symbols irrespective of background. South Africans remain severely divided by all of these, although we came close to feeling unified during the Soccer World Cup and, to a lesser extent, the Rugby World Cup.

 

South Africans host a permanent inferiority complex, in that "everything foreign is better” and we are "oh so third world”. Ironically, this means we sometimes overcompensate and deliver better than first world. Brazilians are almost the opposite. While aware of their shortcomings, the Brazilian attitude is that things are "sort of OK”. While Brazilians like being Brazilian, in spite of their issues, South Africans suffer a roller coaster of emotions towards their country, regularly swinging from extreme despondence to exuberance.

 

Brazilians are settled in their country: they have found their groove and are comfortable with themselves. We have not. But Brazilians are far more inward looking, possibly due to the size of their country, while South Africans are more outward focussed. Ironically though, Brazil has a very dynamic and assertive foreign policy, unlike the shy and sometimes morally weak policy of South Africa.

 

At the individual level, they are much more entrepreneurial than South Africans. However, our large corporates are world class, excelling on the global stage. Despite issues with regard to maintenance and development, South African infrastructure is superb relative to Brazil. Brazil's poor infrastructure is often referred to as "risco Brasil", the Brazil risk.

 

Brazil has only ever participated in two wars – neither on their own soil, and even their dictatorship was relatively benign compared to South Africa’s experiences or their neighbours Chile and Argentina. Although Brazil also has a high crime rate, it is not accompanied by the same levels of violence as here. Our history is one of internal and external wars, confrontation and violence, which is reflected strongly in our society today.

 

South Africans tend to be hyper-critical of government and, when there is failure or ineptitude in government or a parastatal at any level, we (especially more affluent South Africans) take that as evidence that the country is going backwards and a sign to emigrate. Brazilians aren’t surprised by failure or ineptitude and have learned to live with such. We expect our government to meet our ideals, and take it hard when it doesn’t.

 

Brazil has worked hard through strong social policies, and effective implementation thereof, in tackling the country's inequalities and the poor level of education. We have not, and in fact continue to condemn our children, especially rural, to another generation of poverty through poor management of the education system.

 

South Africans tend to be hard on, and push ourselves. If we run, we don’t just jog, we do the Comrades marathon. Brazilians tend to be far more chilled, staying in their comfort zone. When Brazilians run, they jog along the beach at a relaxed pace and enjoy the view.

 

I don’t believe that either Brazil or South Africa currently has the ability to become a fast growth economy such as China or India. The structural problems we face are not being adequately addressed by our respective governments and we will remain low-growth emerging economies. Brazil’s recent economic successes were cyclical, rather than structural, as was ours up to 2008. It is a mistake to confuse their cyclical growth with structural growth. In an economic sense, South Africa leads Brazil by five years. Our property and economic bubble burst in 2008; theirs will follow suit. In that sense, Brazil could learn from us on how to avoid five years of tepid growth.

 

But Brazil’s recent growth had the tail wind of President Fernando Henrique Cardoso’s conservative and market-friendly economic policies. His successor, Luis Inácio Lula da Silva, continued somewhat on that path, but current incumbent Dilma Rousseff has stepped up intervention and interference in the economy, with the already big "hand” of the state getting bigger, accelerating Brazil’s present slump. South African policy makers risk emulating Rouseff, having attributed Brazil’s recent successes to current Brazilian policy. In reality, the drivers predated it and I fear Rousseff is actually dismantling these drivers. The slump we currently face under Zuma’s administration has been driven by similar increasing government intervention and micro-management with often misguided, inconsistent and poor policy. I do note however that our level of intervention still pales in comparison to that of Brazil’s.

 

But we should learn from their policies to bring about social and economic upliftment, and how to improve education. If we get the right combination of Brazilian social policies and education, coupled with a dynamic private sector (with the prerequisite enabling policies from government), we will move a long way to solving our problems.

 

South Africa and Brazil are great countries which face both amazing opportunities and frightful challenges. We have much to learn from one another but, rather than blindly emulating the Brazilian model, South Africa should cherry pick their successes.

 

• How to build a national identity

• Integration

• Joie de vivre, music and Carnival

• Like who and what we are

• Improving education and social upliftment

• Use the ballot to change unpopular governments rather than withdraw politically or resort to violence

• Avoid Brazilian bureaucracy and tax system

• Small business development and entrepreneurship

• The samba

 

• Anything to do with infrastructure, airports, roads etc

• Be less fatalistic

• Be more outward looking

• The size of the state in the economy (although we appear to be catching up)

• World class corporates

• Banking and capital markets