The high level of poverty witnessed in Brazil has a close relationship with the forced movement of black immigrants into the country to provide labour in farms and mining industries. The promotion of agendas to create a predominantly white population in cities such as Sao Paolo created a culture of discrimination that separated the rich from the poor (Buono & Lara 2007, p. 123). The social exclusion of blacks beginning from the 19th century led to the current state of poverty and inequality in Brazil considering that the country has a high per capita income compared to countries with acute poverty. The poor in Brazil represent about one third of the country’s population and receives less than 1.2 percent of the national income (Chellakan 2007, p. 73).
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The stagnation in demographic transition has played a key role in hampering access to education and increased poverty as children drop out of school early to fend for their large families (Tosto 2005, p. 97). The lack of meaningful employment leads to a cycle of poverty within families, which expands the inequality between the rich and the poor. Poverty in Brazil has been unresponsive to growth due to the challenges of eliminating inequality, as opposed to the lack of resources (Hulme & Toye 2013, p. 213).
The Brazilian government has implemented programs such as Fome Zero, which aims at minimizing income inequality by boosting the earning of impoverished families through cash transfers on the condition that children attend school and have access to basic healthcare. Lula’s government in collaboration with financial institutions has achieved success in taming inflation by raising interest rates (Klasen 2009, p. 57).
Other approaches adopted in addressing poverty in Brazil include a floating exchange rate, support for maternal nutrition, gas subsidies, elimination of child labour and fiscal stimulus to support investment in both the private and public sector. Dudley Seers’ theory of development as a social phenomenon that depends on the balance of poverty, unemployment and inequality represents the case of Brazil. The traditional theory of development, which focuses on measuring growth in respect to change on output, does not address the concept of inequality in Brazil (Luna & Klein 2014, p. 231).
Simon Kuznets’ hypothesis that the income distribution in a country worsens as economic growth begins and inequality improves in later stages of development highlights the phenomenon in Brazil. The World Bank report on the economic situation in Brazil proposes that the country can half its poverty levels by ensuring a 3 percent annual growth rate and reduction of inequality by at least 5 percent annually (Reis & Moore 2005, p. 173).
The poverty eradication programs have had success in reducing about 19.8 percent of the poverty rate in Brazil between 2002 and 2006. The ranking of Brazil on the inequality index had declined to about 0.56 in 2006, which is an illustration of the redistribution of income (Sachs 2009, p. 79). The Bosla Famila program has greatly transformed the welfare of the poorest segment in Brazil and increased enrolment in public schools. By 2004, Brazil posted a 5.2 percent increase in the real GDP largely due to an increased inflow in foreign capital (Thomas, 2003, p. 83). Challenges on eradicating poverty and inequality in Brazil relate to the shift in public spending which could have detrimental effects on the country’s middle class. There is the need for a delicate balance in reforming health, education and other key institutions to avoid excluding the middle class.
Buono, R & Lara, J 2007, Imperialism, neoliberalism and social struggles in Latin America, Brill, Leiden. Web.
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