Spanish development Essay Example

Spanish development Essay Example Spanish development Essay Spanish development Essay Essay Topic: The Lottery and Other Stories Special report: Brazil Grounded Having come tantalizingly close to taking off, Brazil has stalled. Helen Joyce explains what it must do to get airborne again Seep 28th 2013 | From the print edition IN JUNE THIS year Brazil was struck by an outbreak of mass protests as sudden as a tropical storm. Brutal policing of demonstrations against a rise in bus fares elicited a wave of solidarity and brought more than a million marchers to the streets on subsequent nights. It also gave vent to previously unsuspected public fury over rising inflation, high taxes, poor public services and political corruption. Even football, a Brazilian passion, became a target of the protesters ire. Many carried placards contrasting their governments lavish spending on stadiums for next years World Cup with the dire state of the rest of the countrys infrastructure. The change in political weather came after almost two decades of brightening skies. Since 1994, when hyperinflation was tamed with a new currency, the real, successive governments have pursued generally sound economic policies and adopted anti-poverty programmed. The economy grew rapidly and inequality declined. The global commodity boom eloped by sucking in Brazilian iron ore and agricultural produce, and in 2007 Brazil struck vast deposits of deep-sea oil. Being chosen to host both the 2014 World Cup and the 2016 Olympics seemed due recognition that its days as a chronic underachiever were behind it. But Braziers economy did not play ball. Having grown by 7. 5% in 2010, the fastest rate for a quarter-century, it slowed to 2. 7% in 2011 and a mere 0. 9% in 2012. This year will see a tepid recovery at best. Inflation is sticking at around 6%. Pessimists recall that the one period of impressive growth within living memory, in the sass, ended in chaos and hyperinflation. In recent years Brazil has been seen as one of the leading emerging-market economies that would help drive global growth in the next half-century. But many now wonder whether it has managed nothing more than a v ¶o De galling (chicken flight), a brief, unsustainable growth spurt followed by a rapid return to earth. During Braziers economic miracle of the sass it was the rich who captured most of the gains. At the time Edema Bach, an economist, invented a new label for it, Believed?a combination of a small, rich country, like Belgium, and a large, poor one, like India. Public education, health care ND roads were provided for the Belgian part. Those living in India did without and expected nothing better. Brazil is still one of the worlds most unequal countries. Its murder rate rivals Mexico. Public health care is a lottery. Fewer than half its pupils leave school fully literate. But it is no longer Believed. In the past quarter-century a better labor market and a basic social safety net have cut poverty by two-thirds. In the past decade the income of the poorest 10% of Brazilian has almost doubled in real terms, whereas that of the richest 10% has grown by less than a fifth. Braziers Gin coefficient, a measure that expresses income inequality, is at a 50-year low. But there is a sense in which Brazil is still Believed, says Marcelo Inner, the president of PEA, a government-funded think-tank: A rich country thats growing like Belgium? population of mm now belongs to a new lower-middle class, living in households with a monthly income per person between 291 and 1,019 realms ($127-446). Most of these gains in income have come from earnings, though government transfers have made an important contribution, especially in the poor north-east. Tens of millions of Brazilian now live in more solid houses equipped with cookers, fridges and washing machines. Many own cars. Children of illiterate domestic servants have Jobs in the formal economy and study for degrees at night. But when the new middle classes step outside their doors, traces of sass Believed are still all around. The number of cars in circulation has more than doubled in a decade, but most roads are still unpaved and few new ones have been built. Public transport consists mainly of packed, decrepit buses. Air traffic has also more than doubled in the past ten years, but airports have barely been touched. Children attend school in two, sometimes three shifts a day. Two-fifths of Brazilian are not covered by local primary health care. When life was a struggle for survival, the economy and Jobs were the main concerns. Now that people are a little better off, the parlous state of infrastructure and public services is at the front of their minds. The government has tried but largely failed to respond to growing demand for public goods. Many of the big infrastructure projects included in its Growth Acceleration Programmer announced in 2007 are running years behind schedule and way above budget. Dilemma Rousseau, the president, appears at last to have accepted that Brazil will need private-sector involvement to get the roads, railways, ports and airports it needs, but her conversion has been late and grudging. Concessions to run three airports were auctioned at the beginning of 2012, but auctions for more airports, as well as ports, roads and railways, were delayed while the government quibbled over the terms. The dangers of complacency Many Brazilian politicians seem to believe that the protests were simply growing pains, but they are being unduly complacent. They should have realized that the new diddle classes would want decent public services, commutes without epic traffic jams and elected representatives who were visibly working towards these ends. Several parties have proposed electoral reforms to make politicians more responsive to voters, but they all want different things, so reaching consensus will be difficult. A less favorable economic climate is now making it even harder to meet the voters increasingly vocal demands. The slowdown in growth has caused a downturn in investment, which last year was Just 18. 4% of GAP, not enough to lead a recovery or to build the infrastructure Brazil needs. Ms Rousseau has been hectoring businessmen to invest more, ignoring the fact that it is mainly government obstructionism and heavy-handedness that hold them back. And commodity prices seem unlikely to bail out Braziers economy with another growth spurt. The country has also blown its chance to cash in on its demographic bonus. Its birth rate has declined steeply over the past few decades but it still has a young population, with many people currently of working age, and a relatively small number of defendants at either end of the age scale. Unfortunately most of this bonus is going on a crazily generous pension system. That will soon put an even bigger strain caveats, this special report will argue that, given the will, there is scope for the social and economic advances of the past two decades to continue. Braziers agribusiness has made huge productivity gains and offers opportunities for further growth. Innovative consumer firms are catering to the new middle classes and are starting to expand abroad. Braziers politicians have been put on notice that todays young adults, better educated than the previous generation, will be less willing to accept corrupt, venal politics and more insistent on getting decent public services in return for the gig taxes they pay. The way to fund such services is not to increase public spending, which at 38. % of GAP is already far higher than in comparable countries, but to get growth going again. To achieve that, the government will have to resume the reforms it dropped during the good times: trimming pension benefits, cutting red tape, lowering and simplifying taxes and updating labor laws. Successful infrastructure auctions, too, would help get investment back on track, and abandoning anti-profit rhetoric would improve business sentiment. But the most urgent problem that Brazil deeds to tackle is a sharp loss of competitiveness. Braziers future Has Brazil blown it? A stagnant economy, a bloated state and mass protests mean Dilemma Rousseau must change course Seep 28th 2013 | From the print edition FOUR years ago this newspaper put on its cover a picture of the statue of Christ the Redeemer ascending like a rocket from ROI De Jeaneries Cordovan mountain, under the rubric Brazil takes off. The economy, having stabilized under Fernando Henries Cards in the mid-sass, accelerated under Luis Len ¤CIO Lull dad Silva in the early sass. It barely stumbled after the Lehman collapse in 2008 and in 2010 grew y 7. %, its strongest performance in a quarter-century. To add to the magic, Brazil was awarded both next years football World Cup and the summer 2016 Olympics. On the strength of all that, Lull persuaded voters in the same year to choose as president his technocratic prop ©g ©e, Dilemma Rousseau. Since then the country has come back down to earth with a bump. In 2012 the economy grew by 0. 9%. Hundreds of thousands took to the streets in June in the biggest protests for a generation, complaining of high living costs, poor public services and the greed and corruption of politicians. Many have now lost faith in the idea that their country was headed for orbit and diagnosed Just another vivo De galling (chicken flight), as they dubbed previous short-lived economic spurts. There are excuses for the deceleration. All emerging economies have slowed. Some of the impulses behind Braziers previous boom?the pay-off from ending runaway inflation and opening up to trade, commodity price rises, big increases in credit and consumption?have played themselves out. And many of Lulls policies, notably the Bolas Familial that helped lift mm people out of poverty, were admirable. The worlds most burdensome tax code But Brazil has done far too little to reform its government in the boom years. It is not alone in this: India had a similar chance, and missed it. But Braziers public sector imposes a particularly heavy burden on its private sector, as our special report 58% to salaries and the government has got its spending priorities upside down. Compare pensions and infrastructure. The former are absurdly generous. The average Brazilian can look forward to a pension of 70% of final pay at 54. Despite being a young country, Brazil spends as big a share of national income on pensions s southern Europe, where the proportion of old people is three times as big. By contrast, despite the countrys continental dimensions and lousy transport links, its spending on infrastructure is as skimpy as a string bikini. It spends Just 1. 5% of GAP on infrastructure, compared with a global average of 3. 8%, even though its stock of infrastructure is valued at Just 16% of GAP, compared with 71% in other big economies. Rotten infrastructure loads unnecessary costs on businesses. In Matt Gross a soybean farmer spends 25% of the value of his product getting it to a port; the proportion in Iowa is 9%. These problems have accumulated over generations. But Ms Rousseau has been unwilling or unable to tackle them, and has created new problems by interfering far more than the pragmatic Lull. She has scared investors away from infrastructure projects and undermined Braziers hard-won reputation for macroeconomic rectitude by publicly chivvying the Central Bank chief into slashing interest rates. As a result, rates are now having to rise more than they otherwise might to curb persistent inflation. Rather than admit to missing its fiscal targets, the government has resorted to creative accounting. Gross public debt has climbed to 0-70% of GAP, depending on the definition?and the markets do not trust Ms Rousseau. Fortunately, Brazil has great strengths. Thanks to its efficient and entrepreneurial farmers, it is the worlds third-biggest food exporter. Even if the government has made the process slower and costlier than it needed to be, Brazil will be a big oil exporter by 2020. It has several manufacturing Jewels, and is developing a world-class research base in biotechnology, genetic sciences and deep- sea oil and gas technology. The consumer brands that have grown along with the countrys expanding middle class are ready to go abroad. Despite the recent protests, it does not have the social or ethnic divisions that blight other emerging economies, such as India or Turkey. An own goal for Dilemma Fernando? But if Brazil is to recover its vim, it needs to rediscover an appetite for reform. With taxes already taking 36% of GAP?the biggest proportion in the emerging world alongside Christina Fresheners chaotic Argentina?the government cannot look to taxpayers for the extra money it must spend on health care, schools and transport to satisfy the protesters. Instead, it needs to reshape public spending, especially pensions. Second, it must make Brazilian business more competitive and encourage it to invest. The way to do that is not, as the government believes, to protect firms, but to expose them to more foreign competition while moving far more swiftly to eliminate the self-inflicted obstacles they face at home. Braziers import tariffs remain high and its customs procedures are a catalogue of bloody-minded obstructionism. More dynamic Latin American economies have forged networks of bilateral trade deals. Brazil has hidden behind Numerous, a regional block that has dwindled into a leftist talking-shop, and the moribund Doth round of world-trade talks. It needs to open up. Third, Brazil urgently needs political reform. The proliferation of parties, whose only interest is pork and patronage, builds in huge waste at every level of easy: a threshold for seats in Congress and other changes to make legislators more accountable to voters. But getting those who benefit from the current system to agree to change it requires more political skill than Ms Rousseau has shown. In a years time Ms Rousseau faces an election in which she will seek a second four-year term. On her record so far, Braziers voters have little reason to give her one. But she has time to cake a start on the reforms needed, by trimming red tape, merging ministries and curbing public spending. Brazil is not doomed to flop: if Ms Rousseau puts her hand on the throttle there is still a chance that it could take off again. From the print edition: Leaders Politics A rough ride for Rousseau But much could still change in the year to the next election Seep 28th 2013 | From the print edition BEFORE THE PROTESTS June Dilemma Rousseau of the workers party (OPT) seemed a shoo-in for a second presidential term after the elections in October 2014. Back in March this year 65% of voters approved of her government, a better mid-term wowing than for either Fernando Henries Cards, the architect of the inflation- busting Real Plan in the sass, or Luis Len ¤CIO Lull dad Silva, the former trade-unionist who succeeded him as president. But Ms Resources post-protest fall has been equally striking. By June her governments approval rating had fallen to 30%, though it rebounded to 38% in September. The sagging polls suggest that Ms Resources support lacked deep roots. Propelled into the presidency by Lull, her mentor, the dour former bureaucrat has never formed a personal connection with the electorate. But mid-term unpopularity need not mean disaster at the polls. Lulls own support suffered a big blow in 2005 after revelations that his party had been buying votes in Congress. Once the ugly stories dried up, he bounced back and was re-elected the following year. Ms Resources biggest advantage is a weak and splintered opposition. A ©CIO Never, the preferred candidate of many in Mr. Cardamoms Party of Brazilian Social Democracy (SODS), can point to two successful terms as governor of Minas Geris, the countrys second most populous state, but the current anti-politics mood has not helped his standing. Joss © Sera, also of the SODS, who lost against Lull in 002 and Ms Rousseau in 2010, wants to challenge Mr. Never for the partys nomination. He is unlikely to succeed, but the attempt may weaken Mr. Never. Eduardo Campus, the business-friendly governor of the north-eastern state of Permanence, looks increasingly likely to run, but his chances are hard to gauge since he is not well known in other regions; and some in his party, which currently supports Ms Rousseau, would prefer not to gamble on a rupture. The fourth of the possible challengers is the only one who seems capable of responding to the mood of the streets, but she is not ready to seize the moment. Marina Silva, who resigned as Lulls environment minister in 2008 and left the OPT over the issue of dam-building in the Amazon, garnered nearly 20% of the vote as the Green Partys presidential candidate in 2010. The child of poor rubber-tapers who learnt to read only as a teenager and put herself through university by working as a maid, she is admired like usual. The latest polls give her 22%. If she did that well in the election, she would force Ms Rousted a run-off. But without backing from a big, established party, she will find it hard to get airtime on television and to run an effective campaign. More worrying for Ms Rousseau than the opposition is friendly fire. Most of the parties in her unwieldy coalition Just want to stay in power. Since taking office she has managed them badly, displaying a mixture of arrogance, inexperience and a perhaps understandable distaste for the unsanitary bargains required to govern Brazil. If her candidacy looks like sinking, those allies will Jump ship without hesitation. Nor is her own partys loyalty guaranteed. It accepted her because she was Lulls choice?and because all the obvious candidates were struck by scandal. Many in the party would eke to see Lull return. He would probably garner more votes than Ms Rousseau. But since stepping down he has said many times that he does not want to run again. Only a total collapse in Ms Resources popularity would change his mind. That still looks unlikely?but it is no longer unimaginable. From the print edition: Special report The economy The price is wrong Why Brazil offers appalling value for money Seep 28th 2013 | From the print edition FROM $30 CHEESE pizzas in S ¤o Paulo to $250-a-night windowless, smelly hotel rooms in ROI, the lasting memory from a visit to Brazil in recent years has been shock t how expensive it is. When Lull came to office in 2003 a dollar bought 3. 5 realms; by mid-2011 it bought Just 1. 53 realms, barely a third of the 2003 figure in real terms, because inflation in Brazil during the period was much higher than in the United States. Since then the exchange rate has fallen to 2. 3 realms to the dollar, but that has undone little more than half the past decades gains. In any case, the causes of Braziers competitiveness problem go far deeper than the exchange rate. The strong real actually helped keep prices down by making imports cheaper. It did, however, give foreign visitors a chance to experience something the locals know so well that they have a name for it: the custom Brasilia (Brazil cost). Compared with other middle- income countries, Brazil is astonishingly poor value for money. Large domestic appliances and cars cost at least 50% more than in most other countries. For everyday items such as toothbrushes and childrens toys the difference is often a lot more. Among the 48 countries tracked by the Big Mac index, The Economists lighthearted currency-comparison tool, a burger in Brazil costs more than in only a mindful that are much richer (Norway, Sweden, Switzerland) and one that is dysfunctional (Venezuela). Burgers should be cheaper in poorer places because wages are lower: in Brazil, less than a quarter of European or North American levels. Allowing for that, a Brazilian Big Mac costs an indigestible 72% more than it should do, and the real remains one of the worlds more overvalued currencies. Special The Miffs broader cost-of-living figures show that Braziers high prices are no mere quirk of overgenerous. In most less well-off countries people find their money goes Averaged across all goods and services, a Mexicans spending power, for example, is 45% higher at home than if he bought dollars and shopped across the border. But a Brazilian can buy little more at home than he can in the United States. The causes of Braziers cost problem are legion. Start with taxes. At 36% of GAP, the total tax burden is far heavier than in other developing countries. Payroll taxes, at 58% of salary, are higher than in any other big economy. Consumption, too, is heavily taxed, which explains why a Brazilian-made car costs up to 45% less in Mexico than it does in Brazil itself. High tariffs push up the price of imports even more. A smartened costs about 50% more than in the United States. Most cars imported from outside the Numerous trade block and Mexico attract not only a 35% tariff but an extra 30% on top of the normal sales tax. The complexity of the tax code also raises compliance costs. A mid-sized Brazilian firm takes 2,600 hours to prepare its annual tax return, almost ten times the global average. Rigid labor laws make it hard to deploy workers efficiently and lead to costly court cases, 3. Mm last year alone. Many businesses prefer to hide in the informal sector. A 2006 McKinney report estimated that by remaining in the shadows a retailer could more than triple its profit margin, but at the cost of forgoing investment and economies of scale. A simplified regime for small firms introduced since then has persuaded many to register, but the resulting efficiency gains are limited by a new problem: too many Peter Pan firms unwilling to grow up and lose their privileges. A plethora of other costs help drive up prices. Poor roads and a limited rail network make for high freight charges. High crime rates have bred a private army of 650,000 security guards. Prime office rents in big cities are vertiginous; Iriss are the highest in the Americas, north or south. A low savings rate, high bank-reserve requirements and the governments considerable funding needs (it runs a budget deficit each year, despite that 36% tax burden) make credit expensive. FIEFS, S ¤o Paulos association of industrialists, says firms financing costs make up 5% of the end price of manufactured goods. Retailers manage to keep selling by accepting payment in installments. The hyperinflation years taught Brazilian consumers not to worry about the total cost, Just whether they can afford he monthly payments. But the effect is to push up the sticker price, since the cost of waiting for full payment and the risk of default has to be built in. Corners are also being cut on quality. In Mexico the bottom-of-the-range Golf, made in Brazil, is a 1 . 6-liter, four-door affair with air-conditioning. In Brazil it has a I-liter engine and two doors, with air-conditioning extra. Shopping around Brazilian respond to whopping price differences by going on foreign shopping sprees. Brazilian tourists spent $22. 2 billion abroad last year, a record, and seem set to go even higher this year. Direct Luxury Group, a consultancy, estimates that four- fifths of Brazilian spending on market goods takes place abroad. Miami has been getting so many Brazilian shoppers in recent years that many stores there have hired Portuguese-speaking staff. TAM, a Brazilian airline, says it takes on extra fuel on the return leg of that route to allow for excess baggage. The story of the custom Brasilia is decades old. Now soaring pay is adding a new chapter to it. Since 2003 the countrys have trebled, thanks to currency appreciation. One reason is the scarcity of well- educated workers. Manpower Group, an employment agency, says Brazil is the worlds second-hardest place for firms to find the skills they need, behind only ageing Japan. At the top end, headhunters say multinationals often have to pay their Brazilian executives more than their bosses in London or New York earn. But the main reason is a decade of big increases in the minimum wage, which sets a trend for all pay negotiations. At the start of 2003 it was 200 realms a month; now it is 678 realms, almost twice as much in real terms (see chart 2). The government is committed to above-inflation increases until 2015. Raising the minimum wage had its merits at iris, says Gray Newman of Morgan Stanley. In the years before Lull took office its value had eroded, creating room to shift profits from capital to labor. High interest rates kept inflation in check, and the weak currency ensured that exports remained competitive even if prices did rise a bit. Higher incomes, helped by somewhat more accessible consumer credit, boosted consumption, creating more Jobs in a virtuous cycle. Large domestic appliances and cars cost at least 50% more than in most other countries But the policy has now pushed costs beyond what either the foreign or the domestic market is willing to bear. Household consumption, one of the economys few bright spots in the past two years, has leveled off. Consumers are overstretched, with 21. 5% of household income going to service debts. Despite some of the worlds highest tariffs, imports are taking a bigger share of the manufactured products Brazilian buy. Exports of manufactured goods are slipping. After several years of price rises close to 10%, demand for services is losing steam. After a long boom driven by credit and consumption, Brazil has ended up looking in some ways like southern Europe, says Tony Pylon of Norma Securities, a broker. Only the rising value of its commodity exports saved it from ballooning current-account deficits. In the short term a weaker currency will help, as long as tight fiscal and monetary policy prevent it from fuelling inflation. The real is now 11% lower than at the start of this year, having touched 20% in August, though after taking inflation into account it is still well above its long-run average. A cheaper real will make Brazilian poorer by lowering their wages in foreign-currency terms and do nothing to get to the roots of the custom Brasilia. But it will protect Jobs by making exports cheaper and imports ricer, and by reducing the price of services compared with treatable goods. In the longer term Brazil needs to boost its productivity. A recent study by the Boston Consulting Group estimated that three-quarters of Braziers growth in the past decade has come from adding more workers and only a quarter from productivity gains. Since there is little room for the workforce to grow further, that needs to change. Other developing countries, and plenty of rich ones too, are doing far better. Regis Bonneville and Julia Fonts of the Fund#o Getting Barras, a university, calculate that in 000 Brazil achieved 19% of United States productivity levels, but by 2012 this had dropped to 18%. Over the same period the Chinese figure leapt from 6% of that in the United States to 17%. A closer look at the productivity figures points to some explanations. In the past two decades total factor productivity?the part left over after accounting for growth in in most other countries: in China by 2. 8% annually, in India by 2. 3%. That suggests Brazil missed out on gains other countries saw from investments in both human and physical capital, or that other improvements that generally come with such investments somehow failed to materialism. The World Banks annual report on doing business in various countries reads like a productivity to-do list for Brazil: make it simpler to start up and wind up companies; cut and streamline taxes; increase domestic savings and investment. For more hints, the country might turn to one of the few sectors where productivity has grown steadily in recent years: agriculture. From the print edition: Special report Agriculture v industry Leave well alone Braziers agriculture has benefited from government neglect. Its car industry has had too much attention Seep 28th 2013 | From the print edition Cottoning on to more productive farming IN 1984 WALTER HORRID, the youngest of three sons of a Japanese immigrant who farmed 500 hectares (1,240 acres) in the southern state of Prang, headed north in search of land. Matt Gross do Soul and Matt Gross, colonized by GAchose from southern states in the previous two decades, were too expensive for him. Eventually he settled on western Bah (see map below), where he bought 1,210 hectares, paying four sacks of soybeans per hectare. There was nothing, he says. No roads, no schools, no health care, no electricity, no water supply, no phone. He got digging. By 1999 the farm was so successful that his brothers in Para ¤ sold up and Joined him. Today the Horrid brothers own 150,000 hectares in western Bah, growing mostly Soya, cotton and corn. The story of how Braziers vast central and north-eastern crop belt was won starts in 1973, when Braziers military regime decided to centralist agronomy research and set up the Brazilian agricultural research corporation, Embrace. It sent 1,200 bright young scientists abroad to study. When they returned and were set to work, they achieved something of a miracle: they made the charade bloom. Until then, Braziers Savannah with its acid, nutrient-poor soil had been thought impossible to cultivate. It turned out that deep tilling, huge quantities of lime and fertilizer and fast-growing crops bred to suit the local conditions could coax a rich harvest from it. Go north, young man The new crops and techniques were adopted by GAchoc sons lured to the charade by the promise of virgin lands. They pushed northwards through Braziers central states, eventually arriving in the region now nicknamed Ambition: the cultivable parts of Marina ¤o, APIPA, Toscanini and Bah. Not only vast farms but prosperous new towns prang up as a result. When Mr. Horrid arrived in western Bah, Luis Eduardo Magical ¤sees (known as ELM) was Just a petrol station. In 2000, when it had 18,000 residents, it split away from Barriers, the regions only sizeable municipality at the time. ELM now has a population of 70,000 and is one of Braziers fastest-growing towns. The mayor says his biggest problem is finding 2,000 new school places each year. The John Deere concession run from ELM by Chic Lovelier, another GAchoc pioneer, is one of the American farm-equipment makers biggest worldwide. Around 40% of the 6. M hectares planted with grains and oilseeds in planted and harvested in the same year. Where rain is too sparse, millet replaces the cotton or corn. Marcos Junk of Agricultural, a Brazilian consultancy, reckons that another mm hectares in Brazil could be transformed in the same way without further advances in crops and technology. A further mm hectares currently under pasture could be turned over to high-productivity crop farming. The transformation of the charade is often dismissed as Braziers belated discovery of a competitive advantage. That leaves out a lot, and not Just Embarrass role and the argue of the GAchoc pioneers. Farming in the tropics is in many ways more difficult than in a temperate climate. Without cold winters, pests and crop diseases are harder to control. Intensive soil preparation and large amounts of lime and fertilizer require scale and capital. According to Roding Rodriguez of Agrarian, a company that buys and farms virgin charade, preparing land for its first crop?deep-tilling, root-picking, liming and so on?means passing over it 1 5 times, which costs as much as the land itself. The 1,300 members of AIBO, Biass farmers association, on average farm 1,269 hectares each. The average American farm is 170 hectares. Other obstacles in the way of Braziers frontier farmers include murky land titles. Bah is better in this respect than other bits of Ambition, and an electronic rural-land register will eventually bring a big improvement, but for now every purchase requires expensive due diligence. Braziers Forest Code requires some land to be set aside on every farm nationwide, no matter how far from the rainforests. Getting the environment agency to agree on set-aside and grant a license to start clearing can take years. Petty bureaucracy is a problem too. After buying a farm in western Bah in 2009, Agrarian built a km power line at a cost of 460,000 realms to connect it to the national grid. The power line has been finished since March, but the company is still waiting for permission to hook it up. Survival of the fittest On the wall of the Horrid brothers office in Barriers hangs the framed root of a drought-resistant cotton plant. It is 3. Mm long, a reminder of the power of natural selection in a harsh environment. Julio Boast, AlBAs president, says such forces have shaped the region too. One reason its farms are so big is that only the best made the grade, and they bought out the losers. Muff dont hear those stories so often, he says, but lots of people came and lost everything, and now theyre, say, driving a truck. It was the opening up of Braziers economy that enabled Embarrass tropical-farming technology to be taken up so widely, says Joss © Garcia Queues of the agriculture ministry. Until a couple of decades ago farmers were being supported by means of minimum prices, government-purchase schemes and trade controls, and agricultural output was growing only because extra land was being added. But in 1990 Braziers then president, Fernando Color, slashed tariffs and dismantled many import and export controls. Since then the total area under crop cultivation in Brazil has increased by 38% and production has more than trebled. Total factor productivity has been growing by 4. 6% a year. In these new areas [such as Ambition] they rarely even mention the government, says Mr. Queues. Theres no culture of subsidies; it was broken 20 years ago. In the past decade, propelled by the commodity boom, Brazil has become one of the worlds largest agricultural