By the end of Sunday, Brazil’s 150 million voters may end up electing a threatening military-backed strongman – a decision that will put them in company with the voters of the Philippines, Turkey, Russia, Egypt and other once-poor countries.
If this weekend’s second-round vote gives the presidency to Jair Bolsonaro, a former army captain and far-right leader with a penchant for violent threats against women and minorities, and a strict law-and-order, protectionist agenda, it will end 24 years of forward-looking governments whose open economies and social policies did much to reduce Brazil’s crippling poverty and inequality. Many Brazilians, however, ended up feeling far from comfortable and secure.
They are part of a worldwide pattern. Across the so-called middle-income countries, something is making people shift their priorities from progress to fear.
Brazil was supposed to be in a much better place in 2018. So were those other countries – Russia, India, China and South Africa – whose names gave us the acronym BRICS. Seventeen years ago, the British banker Jim O’Neill coined that term to describe the countries many believed were poised to leap from poverty into the sort of living standards more familiar in Europe and North America.
The list could have included the likes of Turkey, the Philippines, Chile, Mexico, Indonesia and Malaysia, all of which experienced unprecedented progress in the 1990s and 2000s, just about ending absolute poverty and population growth. Billions of lives were improved.
As recently as 2012, Mr. O’Neill was saying that the BRICS countries were exceeding his wildest expectations, pretty much dodging the post-2008 economic crisis and growing at a pace that left Western countries in the dust.
But even then, there were signs that something was not quite right. “The main cause of coming conflicts will not be clashes between civilizations,” the Venezuelan political analyst Moises Naim wrote in 2011, “but the anger generated by the unfulfilled expectations of a middle class, which is declining in rich countries and booming in poor countries.”
That proved prescient. Each of these no-longer-poor countries is today facing a political crisis and, in each case, you can see its roots in the thwarted expectations of a precarious and fearful nascent middle class.
In all of these countries, headline figures about the rise out of poverty and the newly empowered consumer class did not fully capture what was going on.
Brazil, Russia and South Africa, all of them heavily dependent on natural-resource exports and thus upon foreign-exchange earnings, experienced frightening boom-and-bust cycles and the sort of political-corruption crises that result from resource dependency. India, more dependent on its internal economy, has seen stunning growth of its wealthy classes but its governments haven’t done much to distribute that wealth in ways that create incentives and pathways out of poverty, leaving it, as the Economist wrote earlier this year, with “a hole where its middle class should be.” China’s urban middle class exploded in size, then hit a wall – it is so expensive to get a house, a decent university education or health care that consumer debt has spiralled out of control (as it has in most BRICS countries); those frustrations, and the resulting failure to develop the kind of robust consumer economy and stock market the Communist Party had hoped for, are a big factor behind Xi Jinping’s political restrictions and massive infrastructure spending.
To understand what’s at root, a team of World Bank economists recently took a detailed look beneath the hood of these countries' middle-class lives. Their huge study plumbs dozens of countries’ figures for economic mobility – that is, the odds that you’ll be better off than your parents were – and finds troubling results.
In terms of your ability to have more education than your parents – the most important indicator of middle-class stability – the researchers find that in middle-income countries, “progress has stalled since the 1960s, at a relatively low level of educational attainment compared to high-income economies.” This is locking new entrants out of the middle class: “The opportunity for individuals born in poorer households to climb the ladder is narrowing in many economies in which average living standards are still low compared with high-income economies."
Here’s one timely illustration of the problem: In my own work in Sao Paulo and Rio de Janeiro, I found that the state had invested heavily in really impressive school buildings, but that the teachers and their curriculum remained pitiful and backward. The poor families who’d made it into the lower ranks of the middle class were those who had somehow saved or borrowed enough to pay for private-school tuition.
This is a pattern familiar across many middle-income countries, where resulting household-debt levels have generally reached crisis proportions and the gateway to the middle class has become far harder to open. Frustrated and disillusioned, these families vote for fear rather than progress.