Guillermo Parra-Bernal – Reuters, 11/29/2014
Brazil’s efforts to bring down its debt will translate into renewed investor confidence and additional room to continue poverty-reduction policies for the years to come, incoming Finance Minister Joaquim Levy said on Saturday.
Levy said in a video posted on the presidential palace’s Facebook page that a slow economic recovery will allow the government to post a primary budget surplus equivalent to 1.2 percent of gross domestic product next year. The surplus – the excess of revenue over expenses before debt payments, will increase to at least 2 percent in the following years, he noted.
“Having our debt stabilizing, falling is key to creating the necessary confidence for kick-starting growth and economic activity, while generating the resources that the government needs to continue with its policies of social inclusion,” Levy said. It was unclear when the interview was recorded.
Armando Barrientos & Ed Amann – The Guardian, 4/17/2014
Brazil isn’t getting the best press at the moment, with ongoing problems with the construction of the World Cup stadiums and protests about public services. Recently economic growth in the country has slowed, with some commentators arguing the recent government response sounds “the death knell for Brazil’s economic strategy“.
It’s remarkable how far and fast Brazil has fallen from grace. Only a couple of years ago, the IMF and others were lauding the country for its resilience to the global financial crisis and its sound economic management.
We need to get this into perspective, because behind the hyperbole, there’s much for other developing countries to learn from Brazil’s recent experiences. Countries such as Zambia, which has seen positive growth rates that haven’t translated into poverty reduction, or Nigeria, which has seen inequality dramatically widen over the past 20 years.
The World Bank, 3/22/2014
If there is one thing Brazil does well, it is globalization. It made soccer and its soap operas global phenomena, transforming Brazil into a global brand. Now it’s time for the country’s poverty reduction model to have its day.
Brazil is convinced that eliminating this relentless social scourge at home and around the world will be more effective if it becomes a truly joint effort.
In keeping with this philosophy, the South American giant has created the first global center for poverty reduction, Mundo Sem Pobreza (World Without Poverty), which will effectively become a market of ideas and experiences in applying programs to benefit the most disadvantaged citizens.
Otaviano Canuto – Project Syndicate, 2/21/2014
One often hears that Brazil’s economy is stuck in the “middle-income trap.” Since the debt crisis of the 1980’s, Brazil has failed to revive the structural transformation and per capita income growth that had characterized the previous three decades. But, with the right mix of policies, it could finally change its fortunes.
The prevailing explanation for Brazil’s failure to achieve high-income status lumps the country together with other middle-income economies, all of which transferred unskilled workers from labor-intensive occupations to more modern manufacturing or service industries. While these new jobs did not require significant upgrading of skills, they employed higher levels of embedded technology, imported from wealthier countries and adapted to local conditions. Together with urbanization, this boosted total factor productivity (TFP), leading to GDP growth far beyond what could be explained by the expansion of labor, capital, and other physical factors of production, thereby lifting the economy to the middle-income bracket.
Progressing to the next stage of economic development is more difficult, reflected in the fact that only 13 of 101 middle-income economies in 1960 reached high-income status by 2008. According to the dominant view, success hinges on an economy’s ability to continue raising TFP by moving up the manufacturing, service, or agriculture value chain toward higher-value-added activities that require more sophisticated technologies, higher-quality human capital, and intangible assets like design and organizational capabilities.
Aleszu Bajak – Christian Science Monitor, 1/21/2014
Hundreds of people were forced from their ramshackle homes in the heart of São Paulo this month, as legions of garbage men dismantled informal shelters scrap by scrap. The city government decided to break up the shantytown just blocks from the municipal theater where the symphony plays. Referred to commonly as Cracolandia, or Crack Land, it takes up several downtown streets in this city of 11 million. Some 400 displaced squatters will be funneled into motel rooms and a state-run treatment program called Operation Open Arms.
But the timing of the initiative – and the nine-month duration of the subsidy and treatment regimen – has some critics accusing São Paulo officials of focusing more on beautifying the streets before the June kick-off of the World Cup than providing this population with long-term solutions for rehabilitation, job training, and housing.
“By taking down the structures, you’re not solving the problem,” says Marcela Pontes, a young physician working at an area clinic, and charged with tracking down many of her patients in the shantytown. Brazil‘s public health system recruits community health teams to follow up on the most at-risk patients. HIV and tuberculosis is rampant in this population, so offering treatment is a priority. Plenty fall through the system, though.
Megan McArdle – Bloomberg, 1/23/2014
Joe Nocera discusses Brazil’s approach to economic development in his most recent New York Times column:
“What I saw was no illusion. Though its starting point was quite extreme, Brazil is a country that has seen income inequality drop over the last decade.Unemployment is at near record lows. And the growth of the middle class is quite stunning. By most estimates, upward of 40 million people have been pulled out of poverty in the last decade; extreme poverty, says the government, has been reduced by 89 percent. Per capita income has continued to grow even as G.D.P. growth has slowed.
“Nevertheless, the economists I spoke to were uniformly bearish about the short-term future of the Brazilian economy. They pointed, for starters, to that slowdown in G.D.P., which they didn’t expect to pick up anytime soon. Despite the country’s enormous economic gains since the beginning of this century, there has been very little accompanying productivity gains. Indeed, several economists told me that the main reason unemployment was so low was that the economy was terribly inefficient. …
Taylor Barnes – The Christian Science Monitor, 11/17/2013
The streets in this run-down town of 130,000 are nearly empty during work hours. There are few jobs here. But in the wee hours of the morning, bleary-eyed workers pile into buses headed for Rio de Janeiro, about two hours away, or the Petrobras state oil refinery under construction in nearby Itaboraí.
But one office in Maricá is bustling: the government benefits center. About 20 women and children fidget on the worn chairs lined in front of the cramped office where notebooks filled with applications for antipoverty programs are stacked almost to the ceiling.
Many are here applying for the Bolsa Família conditional cash transfer (CCT) program, a landmark poverty reduction effort in Brazil that has helped raise 36 million Brazilians out of extreme poverty and is currently celebrating its 10th anniversary. In Maricá alone, some 6,000 families receive monthly payouts.
Camila Nobrega – The Guardian, 11/05/2013
Ten years ago, Brazil was just one of many countries struggling against extreme poverty. Today, it has become a worldwide reference – an example of how to fight poverty.
Thanks to a programme that no Brazilian politician now dares to go against: Bolsa-Família.
Evoking admiration and criticism, the programme is now 10 years old. Brazil still struggles to create real alternatives of income generation and decent employment for all citizens. But Bolsa-Família is one of the largest existing instruments of income transfer, benefiting 13.8 million families (almost 50 million people.) It means that approximately one in four Brazilians receives the benefit – the total population is about 198 million people. Considering the scope of the programme, it has a major impact on the Brazilian economy and on people’s lives.