BLACKOUTS OF BRAZIL
Fernando Alcoforado *
Brazil is not only faced with blackouts of the power sector. The low reservoir levels, the
obvious failures of management and planning and use of the old practices of state
enterprises for political purposes in no way related to energy production explain why
the threat of rationing is not cleared.
Blackouts are manifested in all sectors of activity in the country with the primary
responsibility for the federal government. The major blackouts affecting Brazilian
society are: 1) the decline in GDP growth; 2) insufficient domestic savings needed for
investment; 3) the uncontrolled rise in inflation rates; 4) the explosion of public debt; 5)
the de-industrialization of the country; and, 6) the rise of Brazil Cost.
The average rate of growth of the Brazilian economy from 1994 to 2012 was 1.45 % per
annum showing a poor performance by not presenting, sustainably rates above 5 % per
year required for generation of employment and income in Brazil. Currently, there is a
decline in the economic growth of the country.
Brazil to present a consistent growth with the needs of the country, the economy needs
to grow at a rate of 5 % per year making it a must have to increase public and private
savings and investments from current 18.7% to 25% in relative to GDP. In the
economic history of Brazil 's post-war to the present time, the increase in the savings
rate of the country has been through the use of foreign savings which has resulted in
chronic deficits in the balance of payments on current account, the increase in external
debt and the external dependence of Brazil .
Official inflation of the government, even with all he's been doing makeup to force it
down the center of inflation should exceed the target of 4.5 % per year in 2014. At the
moment, it can be stated that Brazil already living with the stagflation which is
characterized by low economic growth and high inflation.
The public debt in Brazil raised from R$ 62 billion during the Cardoso administration
and R$ 687 billion during the Lula government to achieve extremely high value of R$
2.24 trillion in 2013 during the government of Dilma Rousseff. The main factor
responsible for the rise of Brazil's public debt has been Selic interest rates adopted by
the federal government, the largest in the entire world economy. The pity is that the
federal government is spending almost 50 % of the Union budget on interest payments
and repayments of debt (R$ 900 billion) largely exceeding the resources for education,
health and infrastructure.
The current economic policy of the federal government is contributing to the de-
industrialization and denationalization of Brazil which tends to deepen if nothing is
done to reverse it. Industry participation in the Brazilian GDP (Gross Domestic Product)
declined in 2011 from 1956 levels when during the JK government, accounted for 13.8
% of GDP. The pinnacle of the industry contribution to the generation of wealth in
Brazil occurred in 1985(27.2 % of GDP) . Since then it has fallen.
The Brazil Cost is a major barrier to the development of the country and mainly due to:
1) the high public deficit (R$ 2 trillion); 2) high real rates of interest (10.5 %); 3) high
"spread " banking; 4) the highest tax burden (35 % of GDP) of the world's largest; 5)
high labor costs; 6) the high costs of the pension system; 7 ) the complex and inefficient
tax legislation; 8 ) the high cost of electricity; 9) poor infrastructure (blackouts of
electricity sector and saturation of ports, airports, roads and railways); and. 10) the lack
of skilled labor.
All these blackouts affecting Brazilian society result primarily of the blackout in the
management of the federal government that leads to inefficiency and ineffectiveness of
their actions. The blackout of public sector management in Brazil is primarily
responsible for the blackouts that affect Brazilian society as a whole.
Alcoforado, Fernando, engineer and doctor of Territorial Planning and Regional Development from the
University of Barcelona, a university professor and consultant in strategic planning, business planning,
regional planning and planning of energy systems, is the author of Globalização (Editora Nobel, São
Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo,
1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do
desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,
http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel,
São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era
Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social
Development-The Case of the State of Bahia (VDM Verlag Dr. Muller Aktiengesellschaft & Co. KG,
Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (P&A Gráfica e Editora,
Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global
(Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011) and Os Fatores Condicionantes do
Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), among others.