Global Crisis/Innovation Blog

Brazil Helps the Poor – And Helps Itself

By Shlomo Maital

   Check out Brazil!   While eyes are focused on nations drowning in debt (US, Europe), according to the World Bank:

  Brazil weathered the global financial downturn with relatively minor impacts. The country was one of the last to fall into recession in 2008 and among the first to resume growth in 2009. Brazil’s GDP grew 7.5 percent in 2010 and is expected to grow approximately 4 percent in 2011. Brazilians are benefiting from stable economic growth, low inflation rates and improvements in social well-being. 

   Credit former President Lula da Silva with policies that maintained stable economic growth in a stable political climate, while making sure to spread the benefits to the underclass, the uneducated, the unskilled. 

●  Poverty ( US$2 per day) has fallen markedly, from 20 percent of the population in 2004 to 7 percent in 2009.

● Extreme poverty (  US$1.25 per day) also dropped dramatically, from 10 percent in 2004 to 4 percent in 2009.

●  Between 2001 and 2009, the income growth rate of the poorest ten percent of the population was 7 percent per year, while that of the richest ten percent was 1.7 percent.  This helped decrease income inequality (measured by the Gini index) from 0.596 to 0.54 in the period.

●  Key drivers of this have been low inflation, consistent economic growth, well-focused social programs, and a policy of real increases for the minimum wage.

  Brazil’s new  President,    Dilma Rousseff,  promises to continue Lula’s policies.  

  Perhaps, in addition to studying how Brazil makes ethanol out of sugar cane, the world needs to benchmark how it advances the working classes.

   It is of course true that Brazil still has one of the world’s most unequal distributions of income and wealth. But at least, it is working to mitigate it. 

    Many countries simply accept growing inequality as a fact of life.  It isn’t. Brazil is proof.