SEATTLE — For more than a decade Brazil has been recognized as one of the world’s top emerging powers. The country has experienced remarkable economic growth, a rapid increase in living standards and some significant victories in the fight against global poverty. Brazilian officials hoped this decade would highlight their country’s rise to prominence with the hosting of the Olympics and World Cup, instead they are now facing a major crisis.
After several years of lower than average rainfall, southern Brazil is facing its worst drought in 80 years. The regions most affected are also the country’s most important economically, including the city and state of Sao Paulo, Rio De Janeiro and Minas Gerais, an important state for agriculture.
This is supposed to be the rainy season, but last month the region received less than half of its average monthly rainfall, adding to the already existing drought. City reservoirs are on the verge of drying up. One of Sao Paulo’s principle reservoirs currently holds only five percent of its full capacity, while some of Rio’s hold less than one percent. Many fear these reservoirs will be empty within a couple of months.
The result has been widespread water shortages. The government has responded to the crisis by reducing the amount of water pumped out of the reservoirs, which has resulted in periodic cuts in service. Some neighborhoods, particularly poorer ones, have lost access to running water completely. Many cities have begun to ration the amount of water available by cutting service for several days a week and many expect that Rio de Janeiro and Sao Paulo will soon have to do the same.
Many other industries have been severely harmed by the drought, particularly agriculture. With less rainfall and cuts in the amount of water available for irrigation, local farmers have been forced to plant less, sometimes up to 50 percent less. Even worse, many of the crops that have been planted have died off due to the shortage of water and excessively hot temperatures. The region hit the hardest is also one of the most agriculturally important in the country.
This has caused a significant increase in food prices, which are expected to continue to rise. Brazil’s consumer price index rose substantially in January and crop prices have doubled. The 12-month inflation rate has risen to more than seven percent. Economists consider the rise in food prices to be the primary cause and expect inflation to worsen.
Worst of all, the drought also threatens to trigger a major energy crisis. Seventy percent of Brazil’s electricity comes from hydropower, but with hydropower reservoirs at just 17 percent capacity, the amount of energy being produced has declined substantially. At the same time, demand for electricity has increased as a result of the heatwave accompanying the drought. This has led to frequent blackouts, some lasting for several days. Some have temporarily shut down Sao Paulo’s subway. Brazil has responded by increasing fossil fuel usage, but even so there are fears that Brazil may also need to start rationing electricity in addition to rationing water.
Scientists blame the drought on climate change and deforestation. Many also blame poor leadership and lack of planning by government officials, who locals accuse of ignoring the worsening crisis that began over a year ago. Some still fear the response to the crisis has been too slow and inadequate and threatens to make the situation worse down the road. Economists are predicting negative GDP growth for 2015 as a result of the drought. The worst case scenario sounds frightening and apocalyptic and predicts widespread riots and looting. While Brazilians hope for rain, the future of the country’s economy may be equally dependent on the policies of elected officials and the level of commitment from the general public.
– Matt Lesso