Brazil's social security system suffers from some of the same problems as its U.S. counterpart. The resemblance does not end in demographics. What makes social security reform in Brazil even more imperative than in the United States, however, is that the existing system actually perpetuates, rather than reduces, social inequality. Workers in the informal sector receive no benefits, even though they represent slightly more than half the work force. Retirement ages for recipients differ according to whether they have or have not made contributions to the fund.
Civil servants have separate entitlements and can retire at full pay.
Thus, Brazil, for all its size and bombast, is well behind many other Latin American countries in crucial areas of economic modernization. Small wonder that the Brazilian ambassador in Washington, Paulo Tarso Flecha de Lima, let drop the comment during President Clinton's visit to Brazil that his country would not be heartbroken if Congress withheld fast-track authority from the White House. Under such circumstances, presumably the process of hemispheric integration would be postponed until Brazil could modernize its economic system, or, better yet, the whole FTAA project would collapse, and, without being forced into painful adjustments Brazil could draw all South America into its economic and political sphere of influence at its leisure. Many interesting economic opportunities in Latin America will be missed if Congress fails to give the president fast-track authority. In many qualitative aspects, its economy and society are far behind some of its neighbors.