Inequalities In Brazil

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Like many countries in Latin America, Brazil has had some success in reducing poverty and inequality over the last two decades – in contrast to the global trend of widening gaps between rich and poor, which has become a growing concern since the financial crisis. The world is waking up to the corrosive effects of inequality, not only on society, but also as a drag on further economic growth.

Brazil’s progress on inequality came, however, from a very low base. The income gap between the country’s top and bottom decile remains about five times as wide as in advanced economies. Brazil must still do much more to ensure that its GDP growth translates into broad-based improvement in living standards. But what policy areas most need attention? …show more content…

The country also scores comparatively well overall on a range of indicators related to the labour market; registered unemployment, for example, is lower than in many other countries. According to one estimate, changes in the distribution of wages and paid employment in Brazil accounted for 72% of its reduction in inequality between 2001 and 2012, pointing to the importance of labour market policies in making economic growth more inclusive.

However, the country’s businesses struggle with red tape: it takes more time to start a business, enforce a contract, deal with routine tax-related paperwork or resolve an insolvency than in almost all comparator countries, and and informality is perceived to be an issue. As many people derive much of their income from small business ownership or self-employment, an encouraging climate for starting and running enterprises is seen as important to foster inclusive growth. Brazil is perceived to lack a culture of enterprise, defined as the propensity to view entrepreneurial failure as a learning experience rather than an embarrassment; among upper-middle income countries in this regard, only Croatia and Bulgaria rate

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