Brazil’s poor earning more, but still ignored

Deutsche Welle , 11/13/2012

Few countries can boast income inequality quite like Brazil. Now, current research shows that the incomes of low earners in Brazil have risen rapidly. But, will the improvements really help the country’s poor?

The perception that social inequality has been declining in Brazil can now be backed up with data. A study from the Institute for Applied Economic Research (IPEA), a Brazilian institution that works closely with the national government, shows a rapid retreat in economic disparity over the last 10 years. Inequality is now at its lowest point since census data began in the 1950s, the researchers say.

During the period between 2001 and 2011, income levels for Brazil’s poorest increased much faster than for the richest. The poorest 10 percent of the population nearly doubled their income during that time, while the richest increased their earnings by just one-sixth.

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The next crisis will arise in the BRIC countries

Ignacio de la Torre – Forbes, 07/14/2011

A steep rise in credit; rapid increases in house prices to levels way beyond available income; use of overvalued property as further collateral to demand additional funding from the banking system, resulting in even higher levels of debt; an increase in the amount of credit needed for the marginal growth of gross domestic product; a constrained installed capacity that yields to inflationary tensions; a labor force with double digit wage rises; limitless liquidity flowing into sectors with low productivity, such as real estate; a relaxation of the rules for granting loans; a rapid increase in corporate debt as a consequence of accelerated investment, mergers, and acquisitions, all fanned by the intoxicating feeling that demand will just keep going up; a central bank incapable of containing such a self-complacent liquidity binge, with interest rates far below those recommended by the Taylor rule; a political class living off an apparent bonanza, refusing to carry out the reforms needed to avoid disaster when the cycle eventually changes, ignoring calls for serious cutbacks in spending, or rises in taxes that could counteract the exuberance.

Spain in 2006? The U.S.? Britain? Iceland, Greece, Ireland? No. I am talking about emerging countries, in particular Brazil, Russia, India and China, the four known collectively as the BRICs. In my opinion, the BRICs are repeating many of the same errors committed by Europeans and North Americans in the lead-up to 2007, namely the following:

A housing bubble. Lax monetary policy has allowed unsubstantiated rises in the price of housing vs. available income, fuelled by bank loans. The growing value of houses has in turn brought about rampant consumerism coupled with even greater mortgage debt, piling yet more pressure on house prices.

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Brazil tackles ‘entrenched inequalities’

Fabiola Ortiz – AlJazeera, 05/15/2011

Jane de Meneses Coelho, whose son Julio Cesar died in a police operation, cries as Amnesty's Secretary General Salil Shetty watches during a meeting for victims of police violence at Cidade Alta slim in Rio de Janeiro. Photo: Reuters

Despite “considerable progress” made in reducing poverty, “stark inequalities” remain in Brazil, as well as high levels of police and gang violence in poor urban neighbourhoods, Amnesty International warns in its annual human rights report, released as it reaches its 50th anniversary.

The “Annual Report 2011: The state of the world’s human rights” documents specific restrictions on free speech in at least 89 countries, cases of torture and other ill-treatment in almost 100 countries, and unfair trials in at least 54 countries.

In the chapter on Brazil, the London-based global rights watchdog says the country’s “favelas” or shanty towns continue to face “a range of human rights abuses, including forced eviction and lack of access to basic services.”

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Six South American countries with the worst income distribution inequality

Kayla Ruble – Santiago Times, 11/01/2010

A newly released regional report on economic inequality ranked Chile as one of the top 15 countries in the world with the worst inequality of income distribution and declares Latin America and the Caribbean to be the region with the worst inequality worldwide.

According to the report, which was put together by the United Nations Development Program, 10 of the 15 worst countries in terms of inequality are in Latin America or the Caribbean, with the rest in Africa.

The Latin American country that ranked the worst in the UNDP report was Bolivia, with an index of 60 out of 100, a score it shares with Madagascar and Cameroon.

The ranking measures the distribution of per capita household income within countries and places them between Zero (absolute equality) and 100 (complete inequality).

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Business life in Rocinha favela

Samantha Pearson-The Financial Times, 11/04/09

A group of teenagers loitering outside Bob’s, Brazil’s equivalent of McDonald’s, adjust the machine guns slung over their shoulders as they turn to fixate on a passing tour bus.

“No pictures! No pictures!” shouts the guide at the English and American passengers, who stare back at the young men with a mixture of horror and delight.

Rio de Janeiro is well-known for its striking contrasts, both geographical and sociological, but it is here in the favela of Rocinha, estimated to be South America’s largest slum, that the disparities have become particularly stark over the past decade.

Clinging to the forested mountains overlooking the city, Rocinha and Rio de Janeiro’s hundreds of other favelas are home to about a fifth of the city’s population, according to the IBGE national statistics office. Rocinha also plays host to an increasing number of tourists, some seduced by the views but others by the stylised images of violent ghettos portrayed in films.

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Can Brazil be a Leader in Region?

Carlos Alberto Montaner-Miami Herald, 09/15/2009

Naturally, the United States would prefer it if the Latin American countries were democratic, prosperous and sensible, like those in the European Union, for instance, but Washington no longer feels an urgent need to guide them in that direction. However, Washington would like it if Brazil replaced it in that forsaken leadership and is trying to coax that country’s leaders to assume that role.

That wish is nothing more than a naive and unreal illusion.

Brazil is the size of the United States, with a population of 200 million, and has certain partially developed zones, such as Sao Paulo. But it is far from being a regional power. Brazil’s economy totals barely $2 trillion, and the nation is not the leader or an innovative force in any really important field. More than 30 percent of its population is very poor.

It has one of the world’s most unequal distributions of income, while its annual per-capita income, measured in terms of purchasing power parity, is barely $10,000. Eight Latin American countries surpass it in this regard, and one of them, Chile, does so by 50 percent.

Brazil’s level of corruption — 3.5, according to Transparency International — is shameful and worse than that of several African countries.

It maintains a protected economy that hampers competition and intense international trade. The Index of Economic Freedom assigns it a value of 56.7, which translates into a “nonfree economy” (the Index contains 104 countries that are freer than Brazil). Its bureaucracy is slow and clumsy. Its universities are mediocre, with few excellent learning centers. The number of its original scientific patents is ridiculously low, smaller than that of Israel, whose population is only eight million.

But there is something even more important than all of the above: Brazil hasn’t the slightest vocation for being a regional power.

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