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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Brazil’s revolution isn’t leading to a welfare state

Arthur Ituassu – The Guardian, 08/10/2011

Brazilian success is being vastly praised inside and outside the country and there are good reasons for this. In the last two decades, the Brazilian economy not only conquered the hyperinflation of the 1980s, but also reduced poverty by almost 70% since 1994. Due to stabilisation, economic growth and social policies, the old social pyramid – that many generations have learned in schools as the class representation in Brazil – has now been replaced by a diamond-shaped picture, showing the recent and huge increase in the country’s middle class.

At the same time, the Brazilian democracy survived the transition period from the military rule (1964-1985) and shows itself today as a very mature and solid regime – in spite of the constant challenge of corruption scandals. In a moment when Europe and the United States are not in good shape, Brazil’s future and potential may look even brighter. After all, this is a large western multicultural democracy with no religion disputes.

However, the path to Brazilian success seems to be guarded by the two faces of Janus – one looking to the future, the other to the past. Some new and old problems persist and this is especially important for the world in terms of identity and example. If one has to lead, it would be better to do so as an example of positive values to the global community – as Europe and the US once were.

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Taxing the poor

Milagros Salazar – Inter Press Agency, 06/02/2010

Not only do Latin America and the Caribbean collect less tax revenue than any other region in the world, in spite of positive economic growth this decade, but national tax systems are unfair, as they rely heavily on indirect taxes that are levied equally on rich and poor, according to a new study by ECLAC.

The tax burden in Latin America averages 18.4 percent of GDP, only half the average in the Organisation for Economic Cooperation and Development (OECD), which includes all the industrialised nations, says ECLAC (the United Nations Economic Commission for Latin America and the Caribbean).

But the average figure hides even wider discrepancies between countries. In 2008, Brazil led the region in tax receipts with 35.5 percent of GDP, followed by Argentina with 30.6 percent and Uruguay, after a 2007 reform aimed at correcting its traditional tax inequality, with 23.3 percent of GDP.

At the other end of the scale is Mexico, with tax revenues of only 9.4 percent of GDP, according to the ECLAC report titled “Time for Equality: Closing gaps, opening trails”, which was launched May 30 at the 33rd session of the U.N. regional agency, held in the Brazilian capital.

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Brazil: Key facts and figures

BBC News, 05/27/2010

Brazil is Latin America’s largest country and the fifth more populous in the world with nearly 193 million people. Its economy is forecast to grow 6.5% this year. A social welfare scheme introduced by President Lula in 2003 has transformed the lives of millions of poor people, although the gap between rich and poor remains high.

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