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?
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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
For the government to overcome deficiencies efficiently in the sectors of industry, the private sector must have an active involvement in capital investment and creation of services. Brazil’s potential in a global market is set back by inefficiencies in infrastructure that turn away private investment.
Globalisation has been crucial to the economic and social development of Brazil. In the late twentieth century Brazil face years of economic, political and social instability experiencing high inflation, high income inequality and rapidly growing poverty. However after a change of government in the 1990s and large structural changes in both the economic and social landscapes, the brazilian economy has been experiencing a growing middle class and reduced income gap. Since the start of the 21st century, brazil has benefitted from the move to a more global economy.
The Realm of Desire and Dream: Brazil and its Self-Constructing Middle Class of the 1980s, 1990s and Today
What about the 16 million Brazilians living in poverty? In Gordon Parks’ “Flavio’s Home”, the Life magazine article centers around the poverty-stricken da Silva family who reside in Rio de Janeiro, Brazil. He tells the story of a twelve-year-old boy, Flavio, and his misadventures as he and his family face poverty. Parks describes poverty as “savage”, it “claims victims”, and it “spreads like a cancer”. Notice what “savage”, “victims”, and “cancer” all have in common?
Poverty is not just an issue reserved for third world countries. Instead, poverty is a multifaceted issue that even the most developed nations must battle
De Lourdes Rollemberg Mollo, Maria and Alfredo Saad-Filho. "Neoliberal Economic Policies in Brazil (1994 – 2005): Cardoso, Lula and the Need for a Democratic Alternative." New Political Economy March 2006: 99-123.
Brazil is both the largest and most populous country in South America. It is the 5th largest country worldwide in terms of both area (more than 8.5 Mio. km2 ) and habitants (appr. 190 million). The largest city is Sao Paulo which is simultaneously the country's capital; official language is Portuguese. According to the WorldBank classification for countries, Brazil - with a GDP of 1,5 bn. US $ in 2005 and a per capita GPD of appr. 8.500 US - can be considered as an upper middle income country and therefore classified as an industrializing country, aligned with the classification as one of the big emerging markets (BEM) next to Argentina and Mexico. Per capita income is constantly increasing as well as literacy rate (current illiteracy rate 8%). Due to its high population rate (large labour pool), its vast natural resources and its geographical position in the centre of South America, it bears enormous growth potential in the near future. Aligned with an increasing currency stability, international companies have heavily invested in Brazil during the past decade. According to CIA World Factbook, Brazil has the 11th largest PPP in 2004 worldwide and today has a well established middle income economy with wide variations in levels of development. Thus, today Brazil is South America's leading economic power and a regional leader.
Przeworski, A., 2004. Capitalism, Development and Democracy. Brazilian Journal of Political Economy, Vol. 24, No. 4 (96), Pp. 489-497
In the Brazilian labor force, racial and gender disparities are evident. These disparities have to be addressed as the country rapidly develops as it has wide-reaching influences on many aspects of society, ranging from the individual’s occupational status and income to social mobility and perception.
Brazil is far from being a paradise on Earth. There is still a lot to be done. But from the eyes of an expat, I can see clearer the results of continuous transformations in Brazil than my fellow compatriots who are living and experiencing every small change over time. I have seen more changes in education and health happening lately than during my entire lifetime. I grew up hearing from several sources that Brazil would some day be the "country of the future." I thought that I would not live to see this day. Today, I can say that we are closer to the promised "future" than we ever were. Brazil is not the same as it was ten years ago. This country can finally be proud to honor the words written on its flag - "Order and Progress."
A brief background of Brazil, and history of the Favelas, specifically Rocinha, is necessary to understand the issue of poverty in Rocinha. Brazil is the largest country by population and area in South America. Its economy is booming, and has been on the rise since 2004. According to the Wall Street Journal, for the last 100 years Brazil has been the land of opportunity in South America, with it being the largest economy in South America, and the tenth largest economy in the world (...
In the current economic times the development and growth of any economy has come to a near stop or at least to a drastic slow down. The face of the global economic environment has changed and many new countries are starting to change the way their country and the rest of the world does business. One such nation is Brazil, who has turned around their own economic troubles and is becoming one of the fastest growing economies in the world (World Factbook). Brazil has started developing its economy and using the opportunity to achieve a level of respect in the world.
After struggling from dictatorship and hyper inflation, Brazil’s economy improved and the investments in infrastructure and tourism continued to improve due to hosting the Olympics. In 2013, the idea of gentrifying the favelas was introduced. “This more generalised process of gentrification in Rio has three components: first, through a pattern of favela removal, usually inhumane and unjustified by any public purpose; second, (ironically) through social integration programmes of security and urbanisation; and, third, through the ‘favela chic’ phenomenon, wherein a class of newcomers, as consumers of place, is migrating to select favela communities”(Lees, 84). Although the government tries to urbanize the favelas, it is extremely difficult for lower class residents to afford to live there, when services such as electricity and the internet are making the prices of the houses go up. “The real problem of economic displacement will be experienced over the longer term, as centrally located favelas become middle-class enclaves.
The middle class income levels are now so widespread because of this trend, that the middle and lower classes seem to be blending. To support this data, Forbes released a report which revealed that in the past ten years, over 35 million people in Brazil have joined the middle class, equaling out to around 38 percent of the total population. If this trend were to continue in the next decade, by 2022, it is estimated that over 60% of Brazil’s population will be housed under the middle
However, this wealth has not created the quality of life for Latin Americas peoples than it should. The origins of poverty in Latin America are quite complicated but its main origins come from a long history of authoritarian governments exploiting Latin America natural resources by very rich economies like Spain before their independence. These diverse farming systems fed millions of Americans five hundred years ago. Today they are largely demoted to the poorest 10% of agriculture, yet still generating about 45% of the regions livestock’s.