This paper aims to present the obstacles to Brazil's economic progress throughout history and to demonstrate the need to replace the current neoliberal economic model by national developmentalist model adjusted to the new times. This need arises because the neoliberal economic model failed to bring Brazil into the current economic debacle, promoted its deindustrialization and denationalization, increased its dependence on foreign countries and aggravated its social and regional inequalities.

1. 1
THE OBSTACLES TO BRAZIL'S ECONOMIC PROGRESS
THROUGHOUT HISTORY
Fernando Alcoforado*
This paper aims to present the obstacles to Brazil's economic progress throughout
history and to demonstrate the need to replace the current neoliberal economic model by
national developmentalist model adjusted to the new times. This need arises because the
neoliberal economic model failed to bring Brazil into the current economic debacle,
promoted its deindustrialization and denationalization, increased its dependence on
foreign countries and aggravated its social and regional inequalities.
During its history, Brazil adopted the agrarian-export model for over 400 years, which
constituted a huge obstacle to the country's development. The agrarian-export model
was structured on the latifundium and slave labor until 1888 and on the latifundium
from 1888 to 1930. The agrarian-export model was replaced by the national-
developmentalist model from 1930, when Getúlio Vargas came to power and began the
period of industrialization in Brazil with a delay of 200 years compared to the 1st
Industrial Revolution in England. This economic model promoted the development of
Brazil with a policy of import substitution based mainly on government investments,
especially in infrastructure, investments by state-owned companies and investments by
national private capital.
Vargas based his administration on the precepts of populism, nationalism, and labor.
Economic policy began to value the internal market that favored industrial growth and,
consequently, the urbanization process. The Vargas Era, therefore, marks the change in
the direction of the Brazilian economy, transferring the core of the political power from
agriculture to industry. The Vargas administration's economic policy and public
investment made it possible to remove the main barriers to national market integration.
The centralism of the Vargas period paved the way for the complete unification of the
internal market, which was all the more important as the driving force of the economy
became industrial activity. Until 1930, the participation of industry in the Brazilian
economy was insignificant. The economic crisis of 1929 and the rise of Getúlio Vargas
to power in 1930 created the conditions for the beginning of Brazil's rupture process
with the past and the takeoff of the country's industrialization process
The political forces that took power in Brazil in 1930 supported and implemented an
industrialization project with the aim of removing it from economic backwardness and
propelling it towards progress with the establishment of its own industrial park, in the
mold of European and from United States. It was the first time in the history of Brazil
that a government made such a choice. In 1930, the ideology of nationalism with
autonomous development and strong industrial base becomes victorious.
Industrialization developed through the process of import substitution, that is, producing
in the country what was previously imported from abroad. In the first phase of
industrialization in the 1930s and 1940s, the emphasis was on the production of
immediate consumer goods (non-durable goods). On October 29, 1945, under pressure
from the United States government, military personnel invaded the Catete Palace in Rio
de Janeiro and forced President Vargas to resign.
After the deposition of Getúlio Vargas, General Eurico Dutra was the first president

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elected by direct vote whose government did not continue the Vargas administration's
economic policy. During the Dutra administration, the country's foreign exchange
reserves declined, domestic industry slowed and foreign debt grew again making the
country increasingly economically vulnerable. Brazil was ruled again in the first half of
the 1950s by President Getúlio Vargas, who rose to power by the electoral route and, by
implementing to his government the same populist and nationalist policy adopted from
1930 to 1945, became target the US government and its internal allies, who wanted it
out of power. The deposition of Getúlio Vargas in 1945 and his suicide in 1954 were
consequences of this process. At that historic moment in the midst of the Cold War, it
was of fundamental importance for the United States, in its confrontation with the
former Soviet Union, to keep under its control its areas of influence in Latin America,
including Brazil, and in other parts of the world.
In the period 1951/1953, during the Vargas administration, a much more ambitious and
complete planning effort was made than in the previous period (1930/1945). On this
occasion, there was one of the most complete study of the Brazilian economy, besides
proposing a series of infrastructure projects with their execution programs, including
projects for the modernization of railways, ports, cabotage navigation, electricity
generation, etc. Measures were taken to overcome regional income disparities, that is, to
better integrate the Northeast with the rest of the national economy and to achieve
monetary stability. BNDES and Petrobras were also created. By not accepting his
deposition by the military in 1954, President Vargas committed suicide, and his attitude
also represented the final act of the first ruler of Brazil who guided his action in defense
of national sovereignty.
Vargas's national developmentalist model was replaced by the dependent capitalist
development model from the Juscelino Kubitschek government in 1955 and maintained
until 1985 by the military rulers who took power with the 1964 coup d'état. This
economic model promoted the development of Brazil with the policy of replacing
imports supported by government investments, especially in infrastructure, domestic
private capital investments and also foreign investment and technology, as well as
financing from international banks. During the rule of President Juscelino Kubitschek
(JK), elected in 1955, the broad program of public and private investments made
between 1956 and 1961, when heavy industry and durable consumer goods industry
were introduced, changed the pattern of market domination. national. On the one hand,
it reinforced the industrial concentration that occurred in São Paulo and in neighboring
regions and, on the other, demanded greater agricultural and industrial complementarity
between São Paulo and the rest of the country.
In the JK government, it was believed that it would be possible to realize the
development of the country from a single dynamic center (in this case, São Paulo). The
policy of centralizing development in São Paulo has decisively contributed to widening
the existing regional inequalities in Brazil. The expansion of the Brazilian economy was
made with increasing participation of the oligopolized foreign capital that made its
investments aiming at the complete conquest of the national market during the Juscelino
Kubitschek government. Since the administration of Kubitschek, the denationalization
of the national economy has deepened with foreign capital assuming control of the
process of industrialization in Brazil and the national industry has been relegated to its
own destiny because of competition external groups attracted by official incentives and
benefits. In the mid-1950s, Brazilian industrialization took a new turn. Until then,

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during the Vargas administration, the industrialization process had advanced under the
leadership of the Brazilian company. From the Juscelino Kubitscheck government,
foreign capital will progressively take control of the most dynamic branches of the
Brazilian economy.
Janio Quadros, who was elected to replace Juscelino Kubitschek, resigned after 7
months in office. Vice President João Goulart assumed the Presidency of the Republic
in 1961 succeeding Jânio Quadros. Faced with the major structural problems
experienced by Brazil and to face the economic, political and social crisis that existed in
the early 1960s, the João Goulart government sought to implement the so-called Base
Reforms. Under the heading of “grassroots reforms” were initiatives aimed at banking,
fiscal, urban, administrative, agrarian and university reforms. It also included offering
the right to vote for illiterate and subordinate ranks of the Armed Forces. The measures
also sought greater state participation in economic affairs by regulating foreign
investment in Brazil. Among the changes intended by the basic reforms was, first, land
reform. The aim was to enable thousands of rural workers to access land in the hands of
the landlord. The profit remittance law sought to reduce the very high profit rate that
large foreign companies sent from Brazil to their headquarters.
The João Goulart administration's push for the implementation of the basic reforms
began on March 13, 1964 through a large rally at Brazil Central Station in Rio de
Janeiro. At this rally, President Joao Goulart announced the signing of the decree
nationalizing private oil refineries and the decree expropriating unproductive lands
located near the roads and railways. As the proposals were influenced by leftist
thinking, the defenders of capitalism, the landlord, and members of the Brazilian right
were afraid of the growth of a possible communist government in the country. The rally
in Brazil Central Station was the decisive moment to determine the organization of the
military to initiate the coup d'état that erupted on March 31, 1964 establishing a military
dictatorship in the country.
From 1968 to 1973, Brazil experienced high rates of economic growth, generating a
climate of general optimism, soon dubbed “the economic miracle,” and industry
constituted the main sector in the 1968 development boom. From 1968 to 1985, 3
National Development Plan (PNDs) were implemented by Garrastazu Médici, Ernesto
Geisel and João Figueiredo. It was mainly in the Ernesto Geisel administration, with the
II PND, that the objectives were defined as completing the Brazilian industrial structure,
replacing imports of basic inputs and capital goods, overcoming the exchange rate
problems resulting from the oil crisis, developing coal projects, non-ferrous products,
sugarcane alcohol, electricity and oil implemented in the 1970s in various parts of the
country and contribute to the deconcentration of productive activity in Brazil.
The struggle to end the presence of the military in central power was multiplying. In the
last months of 1983, a campaign for direct elections for president, the "Direct Now",
began, which united several political leaders. The movement peaked in 1984, when the
Dante de Oliveira Amendment was voted to reestablish direct elections for president.
On April 25, the amendment, despite winning the majority of votes, failed to get the 2/3
required for its approval by the National Congress. Shortly after the April 25 defeat,
most opposition forces decided to participate in the indirect presidential elections. The
PMDB has launched Tancredo Neves for president and José Sarney for vice president.
Once the Electoral College was assembled, the majority of votes went to Tancredo

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Neves, who defeated Paulo Maluf of the PDS, candidate of the military dictatorship.
This ended the military dictatorship. Tancredo Neves passed away before taking office,
a fact that made Vice-President José Sarney occupy the Presidency of the Republic.
From 1980 to 1989, under the João Figueiredo and José Sarney governments, there was
a profound deterioration of Brazil's economic and social situation. In the 1980s, Brazil
had a balance of payments deficit that was aggravated by the second “oil shock” and the
sharp rise in interest rates in the international market that aggravated the balance of
payments and significantly increased the country's external debt, a fact that made the
government had to raise funds from the IMF. The development model based on the
process of import substitution and dependent on technology and foreign capital, which
peaked in the 1970s, was exhausted in the early 1980s and nothing has been done in this
decade to restructure the Brazilian economy on new foundations. The 1980s mark the
longest and most serious crisis in Brazil in its history only surpassed by the current
crisis that erupted in 2014. The recession and rising unemployment of the early and late
1980s took on a hitherto unknown dimension. The most striking feature of the Brazilian
economy is that the sharp drop in the pace of growth indicated the exhaustion of a
pattern that gave it impressive dynamism throughout the period of modern
industrialization, particularly after the mid-1950s.
It can be said that the developmental experience in Brazil from 1930 to 1985 had as its
main agent the federal government and as its main support the industrialization process.
Inspired by the ECLAC-Economic Commission for Latin America theses, the Brazilian
rulers of the 1950s believed that import-substituting industrialization would make the
economy less dependent of the central capitalist countries. The hope of achieving a
greater degree of economic independence through industrialization faded because it
came to the awareness that it brought a new and more complex type of dependence
upon the penetration of multinational companies in the Brazilian domestic market. In
addition, the coup d'état that deposed João Goulart aborted the attempt to retake the
national developmentalism model initiated by Getúlio Vargas.
The main deplorable fact of this period in the history of Brazil was undoubtedly the
abandonment during the Juscelino Kubitscheck administration of the national
developmentalist model adopted by the Getúlio Vargas government that aimed to
promote autonomous development and combat the country's economic and
technological dependence on foreign countries. Another deplorable event, too, was the
replacement of the dependent capitalist development model adopted by the Juscelino
Kubitschek government and the post-1964 military governments by the neoliberal
economic model that led Brazil to the current economic debacle, promoted its
deindustrialization and denationalization, expanded its dependence on abroad and
aggravated their social and regional inequalities. The neoliberal economic model was
first implemented in Brazil under the Fernando Collor government in 1990, when began
the process of dismantling the existing institutional apparatus resulting from the national
developmentalist model of the Vargas Era and the capitalist development model
dependent on the Kubitschek government and and of the rulers of the military regime
in Brazil that were characterized by the active participation of the government in
conducting the development process. With the neoliberal model, the government
abdicated this role by transferring it to the market.
Internal and external factors contributed to changes in this existing institutional

5. 5
apparatus in Brazil. Internally, the financial crisis of the Brazilian state, which made it
unable to act as an investor and the insufficiency of internal private savings for
investments and, externally, the cessation of financing from international banks and the
reduction of foreign direct investments in Brazil from the external debt crisis of the
1980s, they put in check the financially and technologically dependent model of
capitalist development from abroad hitherto in force.
Adopting the neoliberal adjustment strategy formulated by the Washington Consensus,
the Itamar Franco government, which replaced Fernando Collor, and the Fernando
Henrique Cardoso (FHC) government, which replaced the Itamar Franco government,
began to fulfill its three steps described below: 1 ) stabilization of the economy
(combating inflation); 2) structural reforms (privatization, market deregulation, financial
and trade liberalization), and 3) resumption of foreign investment to leverage
development. The Itamar Franco and FHC governments sued the fight against inflation
with the Real Plan, privatized state-owned companies and further opened the national
economy to international capital. The Lula administration maintained the same policy of
its predecessor FHC, except for the privatization policy. The Dilma Rousseff
administration continued the FHC and Lula governments that preceded it by resuming
the privatization policy that was called the public-private partnership.
The neoliberal economic model in Brazil has brought low economic growth and also the
largest economic recession in the country's history that began in 2014, resulting in
widespread business failure, mass unemployment reaching 13 million workers,
underutilization of 27 million workers, the deindustrialization of the country and the
increase in the denationalization of what is still left of the public patrimony in Brazil
and, consequently, in greater subordination of the country in relation to the exterior. The
Michel Temer government, which replaced Dilma Rousseff's after impeachment, further
aggravated Brazil's economic and social situation by adopting measures that deepened
the recession and made it impossible for Brazil to resume its development. The results
are: negative economic growth, external imbalances, deindustrialization of the country,
denationalization of state-owned enterprises, stagnation of productivity, widespread
corporate failure, mass unemployment, high domestic debt, fiscal crisis of federal, state
and municipal governments, and now also setback in the field of social achievements
with the adoption of labor reform.
Prospects for Brazil's future are extremely negative with the Jair Bolsonaro government
elected in 2018 whose actions will be disastrous for Brazil in the face of the threat it
poses to Brazil's democracy, social rights and independence from the major powers,
especially the United States, and international capital, and further radicalize the
adoption of the neoliberal model. In the neoliberal era in which we live with the
Bolsonaro government, there is no space for the advancement of democracy, social
rights and national independence. On the contrary, there is the elimination of democracy
and social rights and the deconstruction and denial of the achievements already made by
Brazil and the subordinate classes. The so-called "reforms" of social security, labor
laws, the privatization of public enterprises, etc. - “reforms” that are on the Bolsonaro
government's agenda aim at the pure and simple restoration of the conditions proper to a
“savage” capitalism, in which the laws of the market must be without restrictions.
Faced with the disaster that the fascist Bolsonaro government represents for Brazil, the
Brazilian people must mobilize in the struggle for democracy and for the immediate

6. 6
replacement of the neoliberal model with the national developmentalist model adjusted
to the new times so that Brazil can achieve greater economic and social development
with GDP growth rates of over 7% per year, such as those obtained in the 1930-1980
period thanks to the active participation of the Brazilian State in promoting its
development.
* Fernando Alcoforado, 79, condecorado com a Medalha do Mérito da Engenharia do Sistema
CONFEA/CREA, membro da Academia Baiana de Educação, engenheiro e doutor em Planejamento
Territorial e Desenvolvimento Regional pela Universidade de Barcelona, professor universitário e
consultor nas áreas de planejamento estratégico, planejamento empresarial, planejamento regional e
planejamento de sistemas energéticos, é autor dos livros 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. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e
Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 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), Os Fatores Condicionantes do Desenvolvimento Econômico
e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática
Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas,
Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo
Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de
Imprensa, Salvador, 2018, em co-autoria) e Como inventar o futuro para mudar o mundo (Editora CRV,
Curitiba, 2019).