Notes on Inequality and Poverty in Brazil: Current Situation and Challenges
Brazil is one of the most unequal countries in the world. The paper analyses the causes of this inequality in terms of Brazil’s development process, which has traditionally ‘managed poverty’ without making efforts to promote change in the socio-economic order: what the author terms ‘conservativemodernisation’. Accordingly, universal education and social security were not prioritised, and urban segregation, rural exclusion, and regressive taxation were reinforced. Since 2001, levels of inequality and extreme poverty in Brazil have fallen, the result of various socioeconomic factors. The paper particularly notes the positive impact of policies supporting wealth redistribution, such as increasesin the minimum wage, expansion in social security coverage, and support for small-scale agriculture. Yet, a stubborn concentration of income, wealth, and assets amongst a minority remains. The author concludes that further progress will require radical urban, land, and fiscal reforms, along with greater political efforts to combat gender and racial discrimination.
This background paper waswritten as a contribution to the development of From Poverty to Power: How Active Citizens and Effective States Can Change the World, Oxfam International 2008. It is published in order to share widely the results of commissioned research and programme experience. The views it expresses are those of the author and do not necessarily reflect those of Oxfam International or its affiliate organisations.Brazil as a ‘Belindia’: a large, poor India coexisting with a small, rich Belgium 1
Brazil is one of the most unequal nations in the world, although it is one of the wealthiest. According to the United Nations Development Programme (UNDP), income inequalities as measured by the GINI index 2 are higher only than those of some very poor African countries such as Sierra Leone, Swaziland, Lesothoor Namibia. However, the World Bank ranks the Brazilian economy among the 10 richest in the world, with a Gross Domestic Product (GDP) of $1.7 trillion PPP 3 , similar to the Italian GDP. Considering that the country has a population of 187 million 4 , its per capita GDP is in the order of $ 9,000 PPP. The country's high income concentration is revealed in figures: the richest one per cent of thepopulation - less than 2 million people – have 13 per cent of all household income. This percentage is similar to that of the poorest 50 per cent – about 80 million Brazilians. This inequality results in poverty levels that are inconsistent with an economy the size of that of Brazil. According to data provided by the Institute for Applied Economic Research (IPEA), 5 30.3 per cent of the populationor 54 million people, are considered poor 6 and, within this group, 20 million people or 11.5 per cent of the population, are ranked as extremely poor 7 . This poverty level is much higher than the average 10 per cent in countries with a per capita income similar to that of Brazil: those countries have a poverty level more than three times lower than that of Brazil. Inequality is keenly felt inrural areas, where a small number of large landowners - large farmers, owners of unused land and large rural entrepreneurs, who monopolise most rural areas in the country - coexist with millions of small landowners, landless workers and rural workers living in precarious conditions. Starting from an existing high level, land inequalities in Brazil are becoming yet more pronounced: the GINI indexfor land ownership rose from 0.827 in 1960 to 0.856 today. In other words the percentage of the total area occupied by the 10 per cent largest properties is approximately 78 per cent (Hoffmann, 1998; Gasques & Conceição, 2001). The gap between the rich and the poor can be clearly observed in urban areas, where over 80 per cent of all Brazilians live today. The living conditions of a significant...
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