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Brazil: Growth must include curbs on inequality

June 11 2012 - Despite an economic boom that has catapulted Brazil into the ranks of the wealthiest countries, inequality levels there remain among the worst in the world.

Although it is said to have produced 19 millionaires a day since 2007, some 16 million people – equivalent to the population of the Netherlands – continue to live in abject poverty.  More than twice that number, 40 million people or around 20 per cent of the population, fall below the World Bank’s national poverty line.

Research commissioned by Christian Aid from CEBRAP (the Brazilian Centre for Analysis and Planning), in a new report, ‘The Real Brazil: The inequality behind the statistics’, starkly illustrates how inequality continues to blight progress in a country with a GDP now higher than that of the UK.

The report was inspired by a UK study The Spirit Level: Why more equality is better for everyone’ which indicated inequality was more important than income levels in understanding a whole range of human health and social outcomes.

While that study detailed the situation in countries industrialised for more than two centuries, The Real Brazil explores whether the same is true in one of the giants of the developing world.

The report says that structural inequalities that divide Brazilian society have limited the impact of a rise in average income and improved access to social services.

Its key finding is that while absolute per capita incomes have a larger effect than inequality, failing to address inequality effectively means the benefits of growth are cut in half, so the potential for much greater social progress is simply wasted.

The findings are based on analysis of the disaggregated social and economic indicators for urban and rural areas, as well as different social groups, and divisions according to gender, race/colour, academic qualifications and age groups.

The research shows that the lack of empowerment of those in poverty affects life expectancy, the opportunity of a decent education, and access to secure employment.

Politically charged factors contributing to Brazil’s position in the world’s ten most unequal countries include the regressive tax system and the highly unequal distribution of land – both of which the government has failed to address.

Christian Aid senior economic justice adviser Clare Kumar said: ‘Academics and the development community have been quick to praise the changes introduced by former President Luiz Inácio (Lula) da Silva and carried on by his successor Dilma Rousseff

‘Employment is up, and a number of social reforms have taken place including the introduction of a minimum wage, state pensions, a welfare programme that includes cash transfers to the poorest and primary school education for all.

‘But while inequality may have fallen statistically, a huge gulf still separates the haves from the have-nots in Brazilian society, with rural areas particularly badly off.’

‘The authors assess pattern of human development across Brazilian states. They find a clear role for both per capita income differences and for inequality in explaining why life is better or worse in different states.’

The report’s key findings include:

• Ninety per cent of the jobs established in the formal sector have been at the lower end of the income scale. And although industrial productivity has grown steadily, workers’ average earnings had not kept pace, meaning that industrial capital is pocketing most of the gains.

• Because of inequality of opportunities and access, black Brazilians have less schooling, occupy worse jobs, have fewer possibilities of social mobility and live in regions with worse infrastructure.
 
• Great inequality exists between the quality of basic state and private education, with significant disadvantages for the former. In 2009 more than three out of four of the poorest 20 per cent of children failed to complete even primary education. Barely one in 200 students from the same group completed higher education.
 
• In recent years, thanks to the growth of agribusiness, there has in fact been an increase in the concentration of property in the hands of landowners.

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More information from Andrew Hogg on 0207 523 2058 or 07872 350534 or call duty press phone 44 (0)7850 242950

Notes to Editors:

1. Link to executive summary of report: http://www.christianaid.org.uk/images/real-brazil-summary.pdf

2. Link to full report: http://www.christianaid.org.uk/images/real-brazil-full-report.pdf

3. Christian Aidworks in some of the world's poorest communities in nearly 50 countries. We act where the needisgreatest, regardless of religion, helping people build the lives they deserve.

4. Christian Aid has a vision, an end to global poverty, and we believe that vision can become a reality. Our report, Poverty Over, explains what we believe needs to be done– and can be done– to end poverty.  Details at: http://www.christianaid.org.uk/Images/poverty-over-report.pdf

5. Christian Aid is a member of the ACT Alliance, a global coalition of 100 churches and church-related organisations that work together in humanitarian assistance and development. Further details at: http://www.actalliance.org

6. Follow Christian Aid's newswire on Twitter: http://twitter.com/caid_newswire

7. For more information about the work of Christian Aid visit www.christianaid.org.uk