Sun, Dec 23, 2012 - Page 9 News List

Feel-good Brazil facing problems

Millions of people emerged from poverty in the past decade, but inequality, slow growth and poor investment threaten those gains

By Jonathan Watts  /  The Guardian, RIO DE JANEIRO, Brazil

Until that changes, Brazil’s efforts to boost consumption will simply create greater demand for foreign goods and poverty reduction will remain fragile.

Jose Afonso Mazzon, an economics lecturer at the University of Sao Paulo, said increases in the minimum wage, welfare programs and increased access to credit had pushed up the spending power of those just above the poverty line. However, this has yet to translate into solid structural gains for the economy. As a result, he said Brazil is unlikely to reach the government’s 3.5 percent growth target next year unless GDP picks up in the leading economies.

“Europe and the US haven’t seen much change. India and China are the only countries that have been growing, but more slowly than a few years ago. So, I don’t see an optimistic scenario for 2013. I think it will be a little bit better than 2012, but not 3.5 percent. I doubt GDP will even reach 3 percent,” he says.

Millions of people have no income at all. Many others remain trapped in poverty or debt.

However, further action is needed: 8.5 percent of Brazil’s population lives on less than 70 reals a month, equivalent to US$1.50 a day. Education and health standards are woeful. The steep narrow alleys and breeze-block homes of the favelas of Rio are as crowded as ever.

Marques is no longer among them, but for her this is the result of a lucky break — a university bursary arranged through a family member — rather than government policy or a global trend.

“I am an exception inside an incoherent and unfair system,” she says.

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