TRUE_ECONOMIC_DEVELOPMENT

149

FOURTH PART
WEAPONS AGAINST POVERTY

150

"There are no easy recipes for
growing up out of poverty. There are,

indeed, lessons produced by the
experience of successes and failures
that must be seized on a case by case

basis with leadership and
perseverance. "

Enrique Iglesias
President of the IDB

151

INTRODUCTION

Based on international historical experience, the
World Bank's latest report on poverty proposes a strat-
egy to tackle poverty on three fronts; 1) Promote oppor-
tunities for the poor, especially the expansion of human
resources, access to land and infrastructure that the poor
can afford. 2) Facilitating autonomy that is, "strength-
ening the participation of the poor in political processes
and local elections." The most direct modality of this
condition is to promote decentralization / participation
and community development. 3) To increase safety in
respect of disasters affecting the survival of people, as
in the case of the North, droughts and floods. It is about
ensuring the sustainability of the lives of the poor.

The struggle to combat poverty, however, is un-
successful. The march towards development without
inequality and less poverty is much longer and livelier
than one might imagine. In recent years, this problem
has become the greatest challenge for some regions of
Brazil and the Northeast, in particular. Special mind be-
cause the sense of the economic development no longer
just high taxed income growth and has come to mean
better living conditions for the whole population, espe-
cially those living in rural areas.

Northeastern agriculture, however, will never pro-
gress as quickly as necessary without the government,
its political leaders and the productive sector deciding

152

to develop it as a matter of priority. Without this deci-
sion, the distribution and allocation of already scarce
resources and investments tend to spread in many pro-
grams and activities with few results for poverty reduc-
tion.

This means that in order to guide action and in-
vestment priorities, strategies and programs should be
clearly defined according to the principles of attacking
poverty and reducing inequalities.

This document proposes some actions aimed at
this purpose. They are the weapons against poverty, be-
cause it is, in fact, a war.

The admonition given by the eminent scientist Dr.
Raanan Weitz, my unforgettable post-graduate teacher
in Israel, is timely:

The pressure of the rural masses of the
poor peoples is growing steadily and finding
expression in political terms. Unless the people
are convinced that the government is adopting
well-known means to solve its basic problems,
the government will be overturned, no matter
how strong it intends to be.

153

POVERTY IS RURAL

Poverty remains a serious problem in the devel-
oped world. Even though the most severe poverty has
been kept to a minimum, relative poverty still remains.

In underdeveloped countries, the fundamental
problems of poverty, inequality and unemployment
originate in the economic life of rural areas. In the case
of the Northeast, about 70% of the poorest populations
are in rural areas or small towns. These people are
mainly engaged in subsistence farming activities,
whether rainfed or small irrigation.

The characteristic of rural poverty is that the ma-
jority of people in this Region are concentrated in low
power areas. Depending on living off marginal land and
micro funds, the rural poor have no other chance than
to overexploit available resources. Thus, food produc-
tion has priority over the conservation of the environ-
ment of these vulnerable lands. Another reason for rural
poverty is that most of the production is of inferior
quality destined to the consumption of the own estab-
lishments and families of the producers. Production per
worker and per hectare is also low due to the few in-
vestments in the sector. Federal agricultural price poli-
cies, on the other hand, are favorable to urban popula-
tions, but fatal to producers of food and raw materials.
However, the greatest obstacle to reducing poverty
comes from the rural education gap at all levels.

154

Other non- economic factors have also been deter-
mining for the maintenance of poverty in the country-
side. Many scholars of this phenomenon agree that the
most fundamental reason for the backwardness of agri-
culture is the existence of prejudices of the institutions
and influential people of the cities against agriculture.
Often, this sector is considered second class. In univer-
sities, rural issues are neglected and do not arouse in-
terest students mint urbanity. The modern is associated
with industrialization and services, while lagging and
obsolete, to agricultural activities.

The poor performance of Northeast agriculture
also stems from the ill-placed emphasis on rapid in-
dustrialization, based on the large enterprise located
in the largest urban centers. It is known that there is
no real development without the manufactures and
services in support of these activities. The industrial
development allows speeding the economic growth
rates and speeds modernization. On it arises, it pro-
vokes the structural transformations inescapable to
modern economic development.

It is also true that industrial development without
parallel and complementary agricultural development
results in concentration of income, generation of pov-
erty in rural areas and social chaos throughout society.
Therefore, it is occurring throughout the underdevel-
oped world where agriculture has been neglected.

155

In the case of Ceará, as an example, the State Gov-
ernment has oriented its priorities to address the root
causes of poverty in the countryside. Are Examples of
this policy the construction of dams and interconnec-
tion will watershed programs, programs for children 7
education to 14 years, programs of improvement of
health standards and rural electrification and supply of
water, besides the infrastructure works.

Direct-to-poverty programs are also being imple-
mented in Ceará, as is the case of the São José Project,
which in five years (1995-2001) has applied in the poor
communities about US$ 100 million, to the bottom. The
Hora de Plantar program, which benefits about 100
thousand families with high quality seeds and technical
assistance. Programs for the diffusion of hybrid maize
in the appropriate areas and seed production in commu-
nities, with the support of EMBRAPA, as well as insure
harvest, are proof of these initiatives to support the pop-
ulations of rural areas.

Ceará has found it difficult to increase produc-
tion and productivity of subsistence agriculture for
the benefit of small producers. The incentives offered
so far are not enough to overcome the underdevelop-
ment of the countryside. Traditional farmers also re-
sist change because they are illiterate and not suffi-
ciently organized for the production process and the
marketing of their products.

156

The issue of poverty reduction, therefore, lacks
greater scope and new policies that tie these primary
causes and promote a truly equitable and inclusive de-
velopment between urban and rural areas and fairer
than the current one.

Indian economist Vinod Thomas, lived for five
years at Brazil as director of Banco Mundi al. In his re-
cent book The Brazil From the Inside (2005) men-
tions that Ceará's poverty program is a lesson for the
world. I have experienced this experience with Dr.
Thomas, as the Secretary of State for Rural Develop-
ment of the State of Ceará, 1995-2002.

On the subject, it is worth mentioning the diagno-
sis of the Extreme Indigence Map prepared by the La-
boratory of Poverty Studies of CAEN - Federal Univer-
sity of Ceará. This study shows a positive situation of
the programs adopted in Ceará in the rural area, where
48% of this section of the population of the State is lo-
cated. It is worth mentioning that the dividing line for
those of extreme indigence is 1/8 of the minimum wage
of each year considered.

According to data of this research, there were in
average in the years of 1995-96 about 860 thousand
people in the category in comment. Eight years later, in
the year 2000, this amount had fallen to 420 thousand
people. That is, a reduction in the period of 37%.

157

As during those years there was a certain stability
in the number of people the condition of extreme pov-
erty in urban Ceará frame, it can be deduced that the
downward trend in extreme poverty of the state (18%)
was due to the influence of what occurred in the coun-
tryside. This situation serves to demonstrate that ac-
tions organized and focused on solving the poverty
problem can yield good results.

158

THE CHALLENGE

Reducing poverty is now the common goal of all
developing nations desirous of extricating themselves
from the dramatic situation of inferiority in which they
find themselves.

Until recently, the overarching goal of the back-
ward countries was to achieve accelerated growth rates
of total income. This mentality also prevailed here in
Brazil. However, all that changed when of the gap be-
tween wealth and poverty in the regions and social clas-
ses step water become a moat and a problem of human-
itarian and social indignation.

Now poverty is the biggest problem of underde-
veloped nations. The only remedy for this disease is the
elimination of its causes. Thus, apart from having the
advantage of balanced involvement and justice, a broad
field of new opportunities will open up.

The main difficulties in confronting poverty stem
from planning deficiencies, low levels of education, bu-
reaucratic distortions, paternalistic traditions, and lack
of partnership between the private initiative and the
government to work together in an organized way for
this purpose.

A turnaround is necessary in order to create a new
model where the quality and equity substitute dispari-
ties in distribution will benefices of development.

159

No problem is so great in the Northeast than pov-
erty, especially in rural settings. Out of 100 people liv-
ing in camp 70 are poor. The difference between the
age and the field is enormous, followed by inequalities
within the rural area itself.

Without solving this question that has challenged
the federal government and the Northeastern states, we
can not talk about real economic development in Brazil.

The most effective way to mitigate poverty is mo-
bilization and concentrated action to alleviate its root
causes (diseases, lack of education and housing), in-
volving all financial and technical resources, fighting
poverty as if it were a threat to economic development.

Finally, it is necessary to take into account what
the renowned economic development economist Gun-
nar Myrdal said, "It is in agriculture that the battle for
sustainable economic development will be won or lost."
It should be noted that development discussed in this
book places great emphasis on the eradication of pov-
erty by addressing the basic needs of the entire rural
population by increasing the production and productiv-
ity of the sector.

The battle is difficult and the resources are few.
Effective strategies and guaranteed results are needed.
"Agriculture does not develop on its own. Re wants a
complex institutional support system to market its

160

products, supply it with supplies, give it credit and pro-
vide professional advice, “teaches the renowned Israeli
professor Raanan Weitz.

As I have seen in my experience, I believe that the
problem of poverty in the semi-arid region is more a
question of the organization of the productive process
of the current economic system than of droughts and
crises of production. Another aggravating factor of un-
derdevelopment is the realization that there is no semi-
arid region of the world as populous as Ceará, and the
Northeast in general. Inhabitants as rural in nature,
there are over 4 million people in Ceará living inside
(50% of total population) Approximately 1.2 million
work directly in agriculture (35% of total employment)
generating about 6% of the domestic product Gross
State. As for employment in agriculture, it corresponds
to 3 times the situation in Australia, equal to that of
France (the largest agricultural producer in Europe) and
almost 1/3 of the United States, the largest agricultural
producers in the world.

Strategies to correct this market failure that de-
formed the composition of the state economy should
prioritize the creation of nonfarm employment in rural
settings, thus avoiding emigration to metropolitan ar-
eas. According to my calculations, there are at least
500,000 underemployed surplus people in the semi-arid
agriculture of the state of Ceará. More than 100,000 ru-

161

ral settlements account, for example, for only 5 hec-
tares, when BNB and UFC studies stipulate that it takes
50ha for a family to live meaningfully in rainfed agri-
culture.

We must understand and politically assimilate that
the great problem of poverty in the semiarid region is
essentially social, where public action is crucial, as are
structural issues that depend on political action to
change them. Therefore, irrigation projects with public
money should be of social interest, in the form of fam-
ily business agriculture (cooperatives), and primarily
for food production. The mercantilist model of fruit ex-
ports is an income hub and benefits converge to a mi-
nority of intermediaries and international monopsony.
In addition to the technological issues of sustainable
production processes, there is a need for a revolution in
rural basic education. With 60% of people considered
to be functional illiterates in the field, there is no policy
or program to protect against climate or environmental
change that is successful. The simple practice of inade-
quate agricultural technologies (such as fires) is enough
to defeat science's progress in climate change issues.

In short, current environmental preservation and
anti-poverty policies in the semi-arid region need to be
reviewed as they have not worked and will be a waste
of resources and cause for frustration in the future.

162

CREATE PRODUCTIVE EMPLOYMENT

Poverty and unemployment are growing in Latin
America and the Caribbean, according to the latest re-
port of the Inter-American Development Bank (IDB).
In the words of the Bank's Vice-President, Shahid
Javed Burk, 73% of the population of these regions re-
side in urban areas today. The total number of people
living below the poverty line, he points out, has doubled
in the last 20 years.

It is also worth remembering that in São Paulo, the
most industrialized and richest city in Brazil, the popu-
lar population grows 15% a year, where there are al-
ready two thousand favelas with 2.0 million people.

In other words, why have these distortions in eco-
nomic growth occurred in most Third World countries
and what can be done to correct them?

Generally speaking, these countries followed the
path of sophisticated industrialization at any cost, using
a lot of capital and little employment of labor. This pol-
icy resulted in the declining participation of rural areas
in the region. In the long term, this pattern of growth
tends to empty the countryside and congest the metrop-
olises, without infrastructure conditions, and to offer
jobs to all who seek such agglomerations.

163

In this context, however strong a program for ag-
riculture may be, the rural population will tend to emi-
grate to the marginality of cities if alternative economic
income opportunities are not created in the rural setting
itself. Agribusiness and other neutral sectors (without
direct link to agriculture) can be a key element in intro-
ducing new activities in the inland communities and
having an indirect effect on rural employment for the
families of local producers.

A good articulation of the agricultural sector with
the industrial sector is fundamental so that both are ben-
efited with this solution. The choice of industries to be
installed should take into account the impact they will
have on the micro- region economy and the creation of
productive work for the unemployed in rural areas.

Another goal for the localization of industries in
the interior is to create dispersed centers of innovation
and economic and social changes in small towns and
cities. In the case of agro industries, interdependence
with agriculture is also because agricultural raw mate-
rials are highly susceptible and suffer heavy losses in
the manufacturing process. Thus, they can be trans-
ported over long distances, more properly and at lower
costs in the industrialized form.

The mutual relationship between agriculture and
industry was one of the notable factors in the growth
process of the economy of today's developed countries.
Planners in underdeveloped countries ignore this fact

164

and mistakenly seek to emulate the pattern of industri-
alization that exists today in rich countries, where con-
ditions are totally different from what prevails in the
initial stage of economic growth.

Specifically in the case of the Northeast, there are
technical-economic conditions and factors that allow
industrial development to be decentralized and far more
viable than occurred during the industrial revolution of
Europe. The availability of electricity means of
transport and communication in almost all municipali-
ties of the State make it less essential to locate factories
in large cities. The experiments already carried out in
Ceará in this area need to be cultivated and expanded
urgently, since this is where the proven strategy of suc-
cess in combating population and attaining authentic
harmonic development is found. As economic history
proves, the only way to permanently eradicate poverty
is for people to have jobs that can be made via the in-
ternalization of economic development and rural indus-
trialization.

The rural or agro-industrialization, obviously, can
not be seen as a transplant process of urban industrial
practices for rural areas.

The planning and execution of potato industriali-
zation programs should take into account: the relative
factors, the infrastructure conditions, as well as the or-
ganizational forms and technologies required for each
specific case.

165

URBANIZING THE CA MPO

Is rural exodus an evil, as many say?

The technological revolution set in motion in the
early nineteenth century provoked the process of urban-
ization. It was the industrialization that created the
stimuli for its expansion.

Until 1800, the population of Europe and North
America was predominantly rural. In the United States,
the population of the cities was 5%, passed to 15% fifty
years later. In 1940, it was 56% and at present, it is
91%.

England had 10% of the population in the cities at
the beginning of the century. In 2006, this population
was 96%. Australia is currently the most urbanized
country in the world. All developed nations had the
same pattern of population growth.

One can conclude from this that rural exodus is a
fatality or a consequence of the economic and social
transformations of economic development. The pro-
posal of man's fixation in the field is a rejection of eco-
nomic history. It's paddling against the current.

So does the job. When the economy is delayed,
there is often much employment in the countryside.
History books show that, in the 1920s, agricultural
workers fell from 70 to 60 percent to 5 or 3 percent in
all developed countries.

166

The process of urbanization in today's developing
countries has occurred through increased agricultural
productivity. Thus, an ever-smaller population supplied
the food needs of the inhabitants in the cities. Currently,
only 3% of the population employs da in agriculture
produces sufficient to meet the domestic consumption
of these countries and often with surpluses for export.

In the last decades, this process of urbanization
happened in the underdeveloped countries, with two
fundamental differences. The time at which the output
of the population field of the city, has not improved the
productivity farm. In many cases, there has been a de-
crease in average productivity with higher food import
requirements.

The Northeast and Ceará are in such a situation. In
this three state work around today in agriculture occu-
pied 38% of the population, i.e., 1.2 million people go-
ing produces only 7% of the product in the interstate.
There is a surplus of at least 500,000 people employed
in agriculture. This situation is proportionally similar
for the Northeast.

It is a myth, therefore, to think that agriculture,
in isolation, will be able to create new jobs and reduce
the poverty of those who work in this activity. If this
is not possible, what is the solution to the reduction
of rural poverty and the sustainable development of
all rural society?

167

For the Northeast of today, the feasible option is
the realization of the development of the interior, with-
out demographic displacement. In other words, the
population must be maintained in the cities and towns
of the interior, engaged in other non-agricultural eco-
nomic activities. They are agro industries, tourism, pro-
duction of inputs and complementary branches.

Neutral industries, which do not depend on agri-
cultural production, are currently very common in rural
areas of developed countries. This is called agronomy
or integrated development. The construction of infra-
structure and the urbanization of the rural framework
maintain the way of life of the social agricultural sys-
tem with the economic and demographic transfor-
mations peculiar to economic development.

The conclusion of this thesis is that the rural exo-
dus either will happen, by the technological revolution
or motivated by the industrialization of the cities. An-
other force of expulsion will be through the increase of
agricultural production or, as occurs in the Northeast,
through drought. The poor agrarian structure and the
scarce availability of fertile land play an important role
in this respect.

If governments fail to provide the conditions of
better comfort for the resident population and job crea-
tion, far less costly than in large cities, how can they do
so in cities? According to well-founded studies, it takes
twenty-two times more government investment to do

168

this in cities than in the interior. It is better to spend
more on agrarian reform and rural education than even
on urban repression.

Therefore, the involvement should go to the field
and not let the population of the field go to the big cit-
ies, unable to provide the essential for the improvement
of the living conditions of the population.

169

MAKING A SOLIDARY AGRARIAN REFORM

The Program of Agrarian Reform Solidarity insti-
tuted, in 1997, a new model of land restructuring in
Ceará.

Under this system, landless and associations orga-
nized in associations directly with owners to purchase
land with resources provided by a land fund.

Community investment proposals (infrastructure,
productive and social) are also identified and imple-
mented by the community.

The benefits of the Project are income and quality
of life of producers without - land or smallholders. The
natural consequence of this has been to increase pro-
duction with greater efficiency the use of land, labor
and poverty reduction.

A truly innovative aspect in this modality of agrar-
ian reform is the systematic democratic and decentral-
ized operation. It was not enough this to ensure smooth-
ness in everything that is done to help communities
make better decisions, contracts are entered into by the
Association of producers in a supportive manner.

Thus, the role of the government sector is guiding
and monitoring the operation of the program, leaving
communities with the responsibility to plan their own
activities.

170

The operational long-term financing scheme for
land acquisition, with a few years of grace, forces the
beneficiaries to participate with their own resources.

In addition to credit financing of land are subsid
data in the construction of physical infrastructure and
the sustainability production, making fully viable pay-
ment capacity of the beneficiaries of the program.

The main factors behind the success of this policy
have been the decentralization of implementation, with
the initiatives in the hands of the beneficiaries, accord-
ing to their own interests. The simplification of admin-
istrative procedures expedites the rapid service of the
interested parties.

Agrarian Solidarity Reform enables the immediate
ownership of the property, even if payment occurs over
many years. And, as Prof. Raanan Weitz, the farmer's
attachment to the land has affinity with the sentiment of
man for the beloved woman. Land tenure is also im-
portant as a psychosocial factor and political power. A
communitarian leader benefited from the program said
in one word what he felt when he received the program:
"Freedom! Freedom to plant and harvest! "

In fact, as the economist Celso Furtado put it:
"We are the only country in the world with the possi-
bility of solving the social problem through agricul-
ture." And this is possible with the help of the Agrar-
ian Solidarity Reform.

171

For the sake of clarity, it is important to clarify that
the Refugee Program started as a pilot project financed
with resources from the State Government and the
World Bank through the project to combat poverty
(Projeto São José).

Since 1998, the Federal Government has adopted
it in five states of the Northeast with the denomination
of Cédula da Terra. This program has become a com-
plement to the actions of the Institute of Agrarian Re-
form (INCRA), which implements the classic agrarian
policy based on the Land Statute.

Since 2003, this program has been renamed Land
Credit, maintaining the same format of the initial pol-
icy, with the inclusion of other states and natural im-
provements. But it needs to be endowed with more fi-
nancial resources and re- make its proper name of
Agrarian Solidarity Reform, as well as its original
methodology.

172

HELPING THE FARMER
WITH TECHNOLOGY

The vast majority of the rural population of the
Northeast works to keep themselves at a subsistence
level. This situation stems from many structural and cir-
cumstantial factors.

There is no doubt that one of the causes of this is
the lack of effective technical guidance on how to over-
come these obstacles. It would be unfair not to
acknowledge that much effort has been made to change
such a situation. The actions taken so far, however, did
little to change the life conditions of the important seg-
ment of the poor population of rural Ceará.

The big problem to solve is how to reach out to
these farmers and show them how to self-help . This is
because the most important element for the required
changes is the farmer himself. The modes of manage-
ment should be geared towards the purpose of creating
income and employment and not to serve the existing
structures of the farm itself.

Extension services in the Northeast had their first
seeds imported from the model used at the time in the
United States. These extensions of rural extension,
however, could not be fully transplanted, which pre-
vailed at the origin. That is why, from the outset, the
methodology of technical assistance adopted in Brazil

173

presented deficiencies in the adaptation to local reali-
ties.

The methodological goal of transferring state- of-
the-art technology at that time contrasted sharply with
the needs of small- scale farmers who lived in tradi-
tional, simple agriculture.

The results of this experiment were not fully satis-
factory.

In recent years, there has been a renewed interest
in reorganizing the rural extension system, making it
more effective and oriented towards solving the prob-
lems that really hindered the modernization of the tra-
ditional and subsistence economy. The new approach
adopted in the reorganization of the rural extension of
Ceará, for example, sought to teach the farmer to help
himself. The customer, not the corporate problems, be-
came the center of the system's action. For greater effi-
ciency, each Customer Service Center (CEACs) clearly
defined its action plan for its area of operation, coordi-
nating the bodies involved and the target public. Thus,
respecting the priorities of the State Plan for Rural De-
velopment, efforts were concentrated on specific areas,
specific products and groups of farmers.

The change strategy was based on training pro-
grams covering all levels of the technical and adminis-
trative framework of the system and of the farmers con-
cerned within the scope of the rural extension.

174

The purpose of this program was to make all in-
terested parties aware of existing problems and possible
solutions for each case. The final results were based on
the evaluation of the system activities.

In other words, in order to carry out this type of
program, it is necessary that the team of the ex- tension
system be endowed with a new vision and a lot of ded-
ication to its mission as agent of the rural transfor-
mation. All extension efforts should be farmer-ori-
ented. It is he who will win or lose the battle for the
betterment of his living conditions.

As Secretary of Rural Development of Ceará in
the period from 1995 to 2002, I had the opportunity to
follow the excellent work developed by the rural exten-
sion company, linked to the former secretary.

175

EDUCATE TO CHANGE

Education is the cornerstone of rural development.

Development is understood as a process of cul-
tural transformation. In the specific case of the rural
sector, it signifies a transformation of the economic and
social structures, of the production relations of a given
area or community.

The main objective of this process is to strike a
balance with an emphasis on equitable income distribu-
tion. It is the generation of more jobs and income, better
health conditions, nutrition and housing.

Investing in education for the poor, according to
Hollis Chenery, is one of the ingredients through which
growth can be accelerated and income distribution im-
proved. To make an agricultural revolution, it is not
necessary to educate the agriculturist himself, says the
teacher.

Education, in fact, plays a triple role. Through the
diffusion of common ideals and giving the masses the
possibility to understand and judge sociopolitical or-
ganization or transform attitudes and behavior favora-
ble to innovations and progress. It is forming technical
cadres, raising the level of education and training to in-
crease the possibility of defeating poverty.

176

It is not enough only to empower but, above all, to
educate and train man in every way: intellectual, phys-
ical, moral and ethical, that is, to prepare man for the
mission of producer and citizen.

In this context, the fight against illiteracy is an ef-
fective means of mobilizing the population around the
tasks of building a more balanced new development.

Adult education is immediate profitability. The
adult already has knowledge and experience in the field
of production, being able to dedicate himself more ef-
ficiently to other non-agricultural activities. This is the
key to the rapid reduction of the population directly oc-
cupied in agriculture to other more profitable rural ac-
tivities. It is the structural transformation of the econ-
omy and employment in order to increase the income
level of the beneficiary families and their communities.
But what is really important is that social development
rates can be quickly changed by improving education.

On the subject, former IDB vice president Doctor.
Nancy Birdsall says that education is an asset that gen-
erates income for the person who owns it. At least in
two respects education differs from all other factors of
economic development; that is, once acquired, educa-
tion can not be sold or stolen. On the other hand, as the
proportion increases, other assets such as capital or land
diminish in importance.

177

It is easy to see that education can be a better dis-
tributed asset than any other. It is personalized, while
the remaining assets are in the hands of a few. Thus,
with the growth of education, there is an improvement
in the distribution of wealth. It is for this reason that the
unequal accumulation of human capital explains the
disparity of income and rural poverty in Ceará.

One of the outcomes of education is to enable oc-
cupational mobility. For the man of the interior to
change his profession, he is a social scale man. The ed-
ucation is important for non - agricultural activities of
the producers. As a matter of fact, the agricultural ac-
tivity involves knowledge of the climate, soil treatment,
seed , irrigation, fertilizers, pests and diseases, storage,
transport , marketing and credit , to mention some nec-
essary knowledge in order to rural activities.

No country in the world has jumped from tradi-
tional agriculture and subsistence to modernity without
education and empowerment of farmers.

178

FIFTH PART

NEW STRATEGIES FOR
REGIONAL DEVELOPMENT

179

"Fighting misery and fighting injus-
tice is to promote not only well-being,

but also the human and spiritual
progress of all, and therefore the good
of humanity. Development is the new

name of Peace. "

Pope Paul VI
Populorum Progressio

March 26, 1967

180

INTRODUCTION

"The theory is one thing, practice is quite
another."

JEFFREY SACHS

Northeast income growth over the last 30 years
was similar to the national standard. The industrial sec-
tor, the generation of foreign exchange and other mac-
roeconomic indicators followed an upward trend.

These quantitative results were not the same in
terms of improving the quality of life and social condi-
tions of the majority of the region's 50 million inhabit-
ants, especially those dependent on agricultural activi-
ties.

In fact, what has happened in the Northeast is a
bad development. There remain the main problems of
inequality and absolute poverty that mark the most
backward economies of the Third World. In this sense,
the concentration of industry in large companies and
land in the hands of the few with low productivity
stands out. There is excess of people in small farms,
widespread malnutrition, high illiteracy, and lack of
employment opportunities for a significant portion of
the Northeastern workforce.

The agrarian crisis has led to a rural -urban dys-
function in favor of uncontrolled rural outbreaks and

181

high social costs for the congested metropolises of the
region and the south of the country.

Such political and institutional conditions impede
the creation of economic and social opportunities. They
restrain the impulses of economic growth in favor of
society and cause social tensions of great collective ex-
pression.

In fact, the true meaning of development does not
correspond only to a quantitative increase in the pro-
duction of goods and services. It is also its best distri-
bution. It is an ideological concept that involves the re-
orientation of structural transformations of economic,
social and organizational order. The aim of develop-
ment is to improve living conditions and society in all
its economic, social, cultural, institutional, environ-
mental and human aspects.

There is a need, therefore, to redefine clearly the
objectives and directions of a new style of economic
development that is more qualitative than the one cur-
rently underway in the Northeast: a fair and solidary so-
cioeconomic development.

182

THE NATURE OF REGIONAL SUBDESEN-
VOLVEMENT

"It is difficult to understand how
this compassionate world order can in-
clude so many people plagued by ex-
treme misery, persistent hunger and
miserable and hopeless lives."

AMARTYA SEN
NOBEL PRIZE FOR ECONOMY

The causes of the development of the Northeast
are often attributed to various historical, economic, in-
ternational, political, inadequate resources, as well as
cultural and social factors. It is difficult, however, to
distinguish between causal factors and the effects of the
regions own economic and social backwardness.

With the purpose of estimating only some tech-
nical-economic indicators explaining the income level
differences between the Northeast and Southeast, we
have elaborated some calculations based on the meth-
odology used by Hans W. Singer.1

According to these estimates, the difference in per
capita income between the rural sector in the Southeast
and Northeast was mainly due to the higher proportion
of young people in the Northeast, lower productivity

1 Singer, Hans W. Study on the economic development of the Northeast.
Recife. Codepe, 1962.

183

and lower area per worker in this region of the North-
east . than in the Southeast. These factors explain 85%
of the per capita income difference of the resident pop-
ulation in the rural areas of the two regions.

From these data, it can be seen that the Northeast
has a long way to go in order to overcome development
differences with the Southeast of the country. In addi-
tion to the aspects of obtaining resources, the great task
to be carried out will be with regard to the organization
and coordination of guidelines and institutions to sub-
stantially modernize agriculture, without creating un-
employment and concentration of income.

The crucial question, however, is that a large pop-
ulation and almost all wastes, especially subsistence,
are located in the semi-arid and demographic pressure
areas.

It is therefore easy to conclude that the great chal-
lenge and the greatest hope of improving the living con-
ditions of the population is in the substantial increase of
land productivity and in the development of crops
adapted to the climatic conditions of the region.

The increase in the income of the families of the
farmers will also depend on the creation of rural indus-
tries, which, together with the tertiary activities, will of-
fer complementary options of occupation and economic
activity during the period longer than those short peri-
ods planting and harvesting. In fact, rural development

184

also requires good transport, health services and a num-
ber of other factors, mainly development within the in-
dustrial agricultural areas. This industrial development
will provide employment to the surplus agricultural
population.

In other words, any solution will increase the in-
version in the field. The traditional concentration of in-
vestments should be avoided only in large farms and in
exportable crops , whose income tends to be transferred
to urban centers and other regions of the country. These
are difficult problems but can be solved creatively.

As George C. Lodge says:

Should give a high priority to polices
that increase the capacity of rural communities
to organize themselves, to develop initiatives
to overcome resistance to change and to make
reality of the progress.2

In short, the important point is that agriculture
must become significantly more productive so that
there is no cessation of overall development.

For this reason, it is necessary to help rural pro-
ducers with the purpose of modernization, since family
farming does not have autonomous conditions of ac-
tion, while the great landowners are afraid to carry it
out because they do not have a clear federal government

2 "Rural development". Mexico, DF. The National Autonomous University of
Mexico, 1965.

185

policy for the sector. One should not, however, devise
welfare or paternalistic programs that would only result
in ostracism of the workforce, a source of corruption
and discouragement of the true constructive work, in-
dispensable to development.

As for the difference in the income level of the ur-
ban area of the Northeast in relation to the Southeast,
the main explanatory factors are technological differ-
ence, capital density per labor force, age composition
of the population and other minor factors.

It is worth remembering, however, the conclu-
sions of the studies of prof. Stefan H. Robock when he
worked at the Banco do Nordeste do Brasil, as a special
list of the United Nations. In analyzing the problem of
regional disparities, says the renowned economist:

A change of philosophy should be en-
couraged so that the Northeast concentrates at-
tention on its absolute gains and on the possi-
bilities of greater growth, rather than worrying
exclusively about comparing its performance
with that of São Paulo. Also, poor distribution
of the income Northeast problem may be very
serious for this to more area than income dis-
parities between regions.3

3 "Regional economic development; The Brazilian Northeast ". São Paulo,
Fund for Culture, 1963.

186

GUIDELINES FOR HARMONIC DEVELOP-
MENT

"In many situations radical and urgent
changes are necessary in order to restore agri-
culture - and the rural people - to their value as
the basis of sound economic development as a
whole of the social community."

JOHN PAUL II

The dominant conception of the economic policy
for the Northeast has been the achievement of acceler-
ated income growth, with the objective of reducing de-
velopment disparities between this region and other
more prosperous ones, especially the Southeast.4

The results obtained in the last 30 years are partic-
ularly significant in view of the efforts and amount of
investments made. There have been insufficient
achievements in the economic, social and improvement
of the living conditions of the poor population, as com-
mented before.

Studies by the Banco do Nordeste do Brasil, by
professors of Ben-Gurion University (Israel) and the
author have also identified other serious difficulties of
the Northeastern economy that demand an urgent solu-
tion. The most acute in this regard are; a) too high levels
of unemployment and underemployment, coupled with

4 Leite, Pedro Sisnando. Harmonic development of the rural spaço. Forta-
leza, BNB, 1983.

187

low productivity in the agricultural sector and acceler-
ated migration from rural to urban areas; b) a large pro-
portion of absolute poverty and a wide gap in living
standards among the population of the Northeast and
Southeast of the country; c) excessive concentration of
income in industrialized urban centers in relation to ru-
ral areas and by social categories in both areas; d) fail-
ure to implement economic policies for the region and
lack of control of regional development programs; e)
social problems of inadequate housing, poor food, san-
itation and low standards of education and public health
in relation to more developed regions.

In view of these findings, it is verified that the
commitment to obtain regional development has not re-
sulted in meeting the double objective of sufficient eco-
nomic growth and social benefits for the Northeastern
society. There can be no doubt, therefore, that the prob-
lem in the development of the Northeast is a priority
and a national responsibility as a condition for the coun-
tries own development. A lot has been done, but the es-
sentials still have to be fulfilled.

It seems illusory, therefore, to try to overcome
these difficulties by maintaining the same development
strategy hitherto followed. There is a need for a shift of
emphasis on the goals as well as the strategy used. Im-
prove or create also the instruments of economic policy
for the region that could be the task of the new
SUDENE. The approach should be comprehensive,

188

clear and permanent for regional development, which
in recent years has lacked safe guidance and adequate
planning.

The task of overcoming underdevelopment, of
course, depends on the solution of some basic prob-
lems, in addition to the mere claim to increase income
and other general indicators. They can be cited as vital
to the success of the Northeast development project: a)
a sharp increase in agricultural productivity, with sim-
ultaneous creation of nonfarm rural employment, to ab-
sorb the labor released by the modernization of the sec-
tor; b) policy orientation to emphasize the reduction of
unemployment and underemployment through small
and medium industry and other employment activities;
c) targeting the economy with a view to the spatial dis-
semination of the benefits of development, with empha-
sis on rural areas where the major foci of economic and
social underdevelopment lie.

The resources of the federal and state govern-
ments, associated with the contribution of the local pri-
vate sector, should be channeled to the solution of these
real problems of the region. This will bring benefits for
the national economy to the creation of a strengthened
and gradually self-sustaining economy, reducing the
future need to transfer resources to the region. A more
developed Northeast strengthens the national political
system by reducing the social pressures that poverty
ferments.

189

In this way, it becomes necessary to make clear in
the regional economic policy the central problems to be
attacked. With this orientation, it will be easier to adjust
all the directives and instruments of action, avoiding the
dissemination of the scarce resources in problems with-
out priority for the authentic economic development.5

The macroeconomic objectives for the develop-
ment of the Northeast in the coming years should be: a)
accelerated growth of income, seeking to maximize re-
sults in economic, social and spatial terms; (b) modern-
ization of agriculture based on family unity and support
to the agricultural enterprise where it becomes neces-
sary; c) strengthening of the modern industrial sector,
reorganization of traditional enterprises and assistance
to small and medium-sized enterprises, especially agro
industries and industries of the interior communities,
with a view to internalizing the results; d) expansion
and organization of support services for agriculture and
industry, without which they will hardly be able to oc-
cupy their real economic and social functions in re-
gional development, to the benefit of those that effec-
tively produce them.

The idea is to adopt a "model" that produces a pro-
cess of harmonious development.6 In order to do this, it
is necessary, in terms of agriculture, "the establishment

5 Revista Econômica do Nordeste, BNB, nº 2.Vol. 10, 1979.
6 Schlegel, John P. Towards a re-definition of development. Nebraska. Per-
gamon Press, 1980.

190

of policies, outlining projects, rules and regulations that
pay close attention to development gradual growth and
absorption of poor rural people into an expanding rural
economy.”7 This implies modernizing the administra-
tive system and organizations supporting farmers' pro-
duction and their needs. The development project with
the fight against poverty in Ceará could be an experi-
ence extending throughout the Northeast.

For the implementation of these guidelines will re-
quire a gradual improvement of regional and state insti-
tutions. The focus should be coordinated action in cer-
tain areas, according to a comprehensive method. It
could start with a set of more restricted activities, aimed
at improving the conditions of the target public and,
progressively, for the entire regional population.

7 Leite, Pedro Sisnando. "Planning and implementation of integrated rural
development". Fortaleza, Rev. Econ. from northeast. V. 13, No. 1, 1982.

191

STRATEGIES FOR NORTHEAST
DEVELOPMENT

"Poverty was not created by the
poor, but by the way society has struc-
tured itself, as well as by government
policies implemented."

Muhammad Yunes

NOBEL PEACE PRIZE (2006)

A regional development program can not be re-
stricted to a single sector or measures. Individual inter-
ventions of agrarian reform, technological moderniza-
tion or industrialization, for example, can have effects
well below their possibilities if not undertaken jointly.

In practice, it is opportune to recall that the devel-
opment of agriculture is part of the broader develop-
ment of the whole rural area, which, in turn, is linked
umbilical to the whole process of economic develop-
ment. Similarly, there is interconnection between in-
dustrial development and services.

From this observation, it can be concluded that the
orientation of actions requires a new strategy that takes
into account the need for a comprehensive approach
and focused on priority localities. “All activities require
space," says John Friedman. For these reasons, the
measures proposed in this document need to be consid-

192

ered in a perspective of interdependence and comple-
mentarity so that the economic and social results of
these programs can be maximized.

The strategy we propose is aimed at tackling the
problem of development in a multisectoral way , with a
view to reducing rural emigration to already congested
metropolitan cities. The key to this approach is to create
opportunities in productive zone in rural areas, includ-
ing the sin in the inner cities that should work as social
service centers and support produce.8

The methodology for regional development
should be based on economic growth, modernization
and increasing the economic dimension of rural areas
by: a) mobilizing human resources and making better
use of existing natural resources and infrastructure in
the areas of priority action; (b) ensuring that small pro-
ducers have access to productive resources and support
services necessary for production; (c) the creation of
employment opportunities aimed at improving the dis-
tribution of income and the purchasing power of the ru-
ral population; d) integration of agriculture, industry
and services, within the rural context, taking into ac-
count physical, economic, social and organizational as-
pects ; (e) improved conditions for food, health, educa-
tion, housing and other basic needs as requirements for

8 Weitz, Raanan. "New Roads to Development". New York, Twenty Century
Fund, 1985.

193

increasing productivity and quality of life for the popu-
lation.

The basic guideline for rural development should
therefore be to transform and resolve the economic and
social problems of the interior communities in a harmo-
nious way, according to the most equitable standards of
social justice.

This approach, as defended by prof. Raanan
Weitz, is based on a strategy based on three assump-
tions: agricultural growth as a key to rural develop-
ment; development of agriculture simultaneously with
the industrial and service sectors; emphasis on social
forces as an element of the rural development process.

194

ROADS FOR FAIR DEVELOPMENT

"Brazil is experiencing a moment of def-
inition between realizing its vast potential or
giving this precious opportunity."

VINOD THOMAS

"No society can certainly be happy and prosperous
if the vast majority of its inhabitants are poor and mis-
erable," prophet Adam Smith (1776), patron of scien-
tific capitalism, warned at the beginning of the English
Industrial Revolution.

In fact, there is a lack of measures and an eco-
nomic development project that express the will of the
majority of the population. That they are focused on
meeting the common interests of the whole society and
inspire confidence and mobilize the efforts of the com-
munity. This may cause elites, members of the power
system, and the people to experience a growing sense
of frustration and hopelessness.

It may be a tragic misunderstanding, therefore,
that time will spontaneously bring solutions to the prob-
lems of underdevelopment and social distortions of the
uneven pattern of economic growth in the Northeast.

In short, the Brazil needs a new philosophy of fair
economic development, a new social economic market
policy and renewed participation in social policy and
sensitivity in defining the directions of an authentic re-
gional development. More precisely, the government

195

has a moral obligation, in terms of human duty and sol-
idarity, to set goals that are objectively aimed at achiev-
ing the fastest possible growth but with equity and ab-
solute poverty reduction in terms of meeting the needs
basic.

The government can act through its regional agen-
cies to increase efficiency in the use of regional re-
sources, offering incentives for technology improve-
ment, mobilization of savings for reinvestment, and en-
couragement of entrepreneurship. In order to do so, it
is necessary to devise global investment and credit pol-
icy programs to compensate for resource allocation in-
equalities and the availability of social and economic
infrastructure in the Northeast.

The achievement of these objectives requires
changes in objectives, in the public administrative sys-
tem and in reorienting the entities that act in the re-
gional development, besides the reorganization of the
own producers.

The encyclical letter Mater et Magistra of his Ho-
liness Pope John XXIII on the evolution of the social
question, in the light of Christian doctrine, offers a plan
for the next rulers of Brazil, both at the national, state
and local levels. Here are the demands of the common
good that should become dogmas for economic devel-
opment:

Eliminate or reduce imbalances between
the agriculture, industry and essential public

196

services sectors ; adapt as far as possible the
productive structures and progress of the sci-
ences and technicians; to moderate the living
content and improve the present state of geog-
raphy , with the intention of preparing a better
future for future generations.

We can not but mention the preoccupations of the
pope of venerable memory with the question of human
labor. According to him, the intervention of the public
authorities in economic matters must seek, in various
ways, to employ the greatest possible number of work-
ers; maintain a fair proportion of wages and prices by
making goods and services of general interest accessi-
ble to the greatest number of citizens. It is appropriate
to point out that "education is the master key of the fu-
ture," as the late Pope John Paul II said during a visit to
ECLAC (Chile) in April 1987. On receiving the Peace
Medal of the Nations United Nations, the Supreme
Pontiff said, among the strong applause of the techni-
cians of this scientific entity:

That individuals, individuals, institu-

tions, and multiple forms of private initiative

should concentrate their greatest efforts on the
promotion of education.

In fact, in addition to education, productive occu-
pation is a fundamental right for the human person. The
man without work is wounded in his dignity, he teaches
us the social doctrine of the Church.

197

No nation among developed countries has ad-
vanced in industrialization without going through a
deep social and cultural transformation, supported by
education.

Fighting poverty without education is like having
a boat sailed ashore.

198

PRINCIPLES OF THE NEW RURAL STRAT-
EGY

"The agricultural problem will not
be solved in the lab or at the conference
table."

MAX MILLIKAN

It is not possible to overcome the difficulties of
agricultural backwardness by maintaining the same tra-
ditional strategies of the past. They will not work. The
most fundamental of the requirements for the progress
of sustainable and poverty-free agriculture is the
change in the attitudes of government and institutions
to the role of agriculture in general economic develop-
ment. The adoption of a new strategy for the rural sector
is an urgent need of our time and a prerequisite for au-
thentic economic and social development.

Rural development must be carried out with struc-
tural change, but without geographical mobility of the
rural population. In other words, progress should be
made inland and not the population to immigrate to
metropolitan areas.

In this new approach, it is necessary to adapt or
establish agricultural establishments with greater pro-
duction capacity. Rural economic development will not
be achieved without simultaneously increasing produc-
tion and agricultural productivity.