Brazil’s middle class starts to lose ground

Samantha Pearson – Financial Times, 5/12/2015

Ten years ago, Brazilian musician Max Gonzaga shot to fame with “Middle Class”, a hit song about the millions of Brazilians who were emerging from poverty to join the middle class, often referred to in Brazil as “C Class”.

“I hate buses. I have a car that I bought in installments . . . I’m always at the limit of my overdraft,” say the lyrics, capturing some of the cynicism many wealthier Brazilians felt about the consumerism that had gripped the country.

Since Brazil’s ruling Workers’ Party (PT) took power in 2003, more than 40m Brazilians have joined the middle class, thanks to government benefit schemes such as Bolsa Família and an economic boom that boosted wages and brought more stable employment.

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Brazil’s middle class starts to lose ground

The United States and Brazil: On Reaping What You Sow

Jan Knippers Black – NACLA, 3/6/2015

It was often said in Latin America in the early 1960s that when the United States sneezed, Latin America caught pneumonia. In fact, it was repeated year after year until the fall of 2008, when the United States caught pneumonia and Latin America sneezed.

Brazil, in particular, after a short spell of sneezing, rebounded to its pattern of robust economic growth, grounded in sophisticated research and development, diversified products and trading partners. Through years both of boom and, more recently, slump, redistributive domestic programs, like Bolsa Familia, and higher minimum wages have enabled Workers’ Party (PT) governments to narrow the country’s income gap. Meanwhile, the U.S. sinks deeply into debt to China and the domestic income gap continues to grow. The one percent are thriving; not so the 99.

The changing relationship between the United States and Brazil over the last couple of decades responds in large part to changes in the global power game and to how each of the countries has played the game. Currently undergirded by socially responsible civilian leadership and the legendary diplomatic skills of Itamaraty, the foreign ministry, Brazil can expect to be taken into account on issues of global import; moreover, its collaborative outreach has served to strengthen national self-confidence elsewhere in Latin America. Does that mean that the United States can be counted upon now to treat Brazil, and Latin America in general, with respect, like good neighbors rather than subservient and potentially subversive clients? Apparently not.

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The United States and Brazil: On Reaping What You Sow

Brazil-US Relations: Common Ideas, Little Dialogue

Monica de Bolle – The Huffington Post, 2/20/2015

It is unfortunate that Brazilian-American relations have become strained in recent years. This sense of frustration is further enhanced by the fact that the two largest countries in the Americas have very similar agendas when it comes to tackling inequality and income disparity. President Obama’s proposals towards “middle-class economics” and the recently released Economic Report of the President for 2015 highlight just how close the two countries are in their thinking about these issues and on how to make economic policies work more equitably for everyone. And yet, rather than coming together, the distance between the two countries has widened.

President Dilma Rousseff’s newly reelected government has vowed to rebalance Brazil’s economy – plagued by fiscal disarray and mounting inflation – in a way that preserves the legacy of the PT (Brazil’s Workers’ Party) achieved over last twelve years: the impressive social inclusion that has raised millions from the lowest ranks of the income distribution to the middle class. Aided by the macroeconomic stabilization of the 1990s and the unprecedented favorable external conditions that dominated the economic landscape between 2004 and 2010, the PT governments have set in motion their own version of “middle-class economics.” Remarkable social mobility took hold, and many were able to raise their overall quality of life as a result of targeted cash transfer programs such as “Bolsa-Família,” as well as specific programs aimed at allowing working mothers to remain in the marketplace and programs to help small and medium entrepreneurs tap into credit markets, among many other initiatives.

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Brazil-US Relations: Common Ideas, Little Dialogue

Nightmare in Brazil: An interventionist government and bribery scandals have darkened the country’s prospects

Financial Post, 1/13/2015

On January 1, 2011, Dilma Rousseff became the first female President of Brazil and hand-picked successor of out-going President Luiz Inácio Lula da Silva. On handing over the presidency, Lula enumerated with pride the social and economic advances that occurred during his eight years in office — the creation of 15 million jobs, expansion of the Bolsa Familia, (an income support received by 13 million families), and a 67 percent increase in the minimum salary. These measures, along with robust economic growth, lifted 28 million people out of poverty.

In spite of the rhetoric of his left-leaning Workers Party, Lula’s administrations had continued the “conservative” macroeconomic policies of the previous Cardoso administration and Brazil had benefited from the rapid growth of the Chinese economy, which raised prices of its agricultural and mineral products on world markets. In his farewell address, Lula highlighted the enormous economic potential of the recently discovered Pre-Sal offshore oil field, and its promise of making Brazil one of the top ten oil producers in the world. Development of these fields would require more than US$200-billion in investment. Lula left office with an 80 percent approval rating, and would have undoubtedly been re-elected for a third term if the Brazilian constitution had not restricted him from running again. Many observers felt that Brazil had entered a period of sustained economic growth.

In January of this year as Dilma begins her second term in office, many Brazilians believe the dream of continuous economic and social advances has become a nightmare. A massive corruption scandal has enveloped Petrobras, Brazil’s flagship petroleum company that is 64 percent owned by the Brazilian government. Investigations by the Brazilian Justice Department revealed that the directors of Petrobras received kickbacks, totalling more than $100-million from 23 construction companies. More than 28 politicians have been linked to the bribery scandal, and many more names will likely be revealed in the coming months.

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Nightmare in Brazil: An interventionist government and bribery scandals have darkened the country’s prospects

Brazil focuses on nurseries, schools and jobs to fight poverty

Sam Jones – The Guardian, 11/24/2014

Expanding nursery provision, improving educational standards and providing more vocational training to adults will be at the heart of Brazil’s efforts to fight poverty and inequality over the next few years, according to the country’s social development minister.

While she trumpeted the successes of the bolsa familia poverty-relief programme – the cash handout given to almost a quarter of Brazilian families on condition that their children go to school and get vaccinated – Tereza Campello insisted that the country still had a long way to go in creating a fairer and more prosperous society.

Introduced in 2003 by the government of President Luiz Inácio Lula da Silva, the bolsa familia is estimated to have kept 36m families out of extreme poverty and to have been responsible for a dramatic drop in infant mortality, with 0-5 deaths from diarrhea falling by 46% and deaths from malnutrition down by 58%.

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Brazil focuses on nurseries, schools and jobs to fight poverty

“This is not a speech. It is a life”

H.J. – The Economist, 09/18/2014

Brazil’s president, Dilma Rousseff, who is hoping to be granted a second term in next month’s elections, has claimed that only a vote for her can ensure the continuation of the country’s best-known anti-poverty programme, the Bolsa Família. Since 30m people out of an electorate of around 140m are directly or indirectly dependent on the programme’s cash handouts, this is potentially enormously damaging to her opponents, of whom Marina Silva is the best placed in the polls.

Ms Silva’s response was broadcast on television in her electoral advertising on September 16th. To feel the full force of her words, you need to know that she was born in the Seringal Bagaço, a poor, rural part of the Amazonian state of Acre, to parents who were rubber-tappers. Unlike almost anyone else in Brazilian politics, she knows how hunger feels. The video below is in Portuguese, subtitled. Our translation into English is underneath—but if you want to understand why this woman, who was not even a presidential candidate until her running mate, Eduardo Campos, died in a plane crash on August 13th, has a strong chance of becoming Brazil’s next president, you should watch the video with the sound turned up. It’s only two minutes long.

“Dilma! Know that I’m not going to fight you with your weapons. I’m going to fight you with our truth. With our respect. And with our policies. We are going to keep the Bolsa Família. Do you know why? Because I was born in the Seringal Bagaço, and I know what it is to go hungry. All that my mother used to have for eight children was an egg and a bit of flour and salt, and some chopped onion. I remember looking at my father and mother and asking: Are you not going to eat? And my mother answered… my mother answered: We are not hungry. And a child believed that. But afterwards, I understood that for yet another day, they had nothing to eat. Someone who has lived through that will never end the Bolsa Familia. This is not a speech. It is a life.”

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“This is not a speech. It is a life”