So Rich Brazil, So Many Poor Brazilians!

    Trash dump in Brazil

    Trash dump in Brazil A few days ago, I thoroughly enjoyed reading the book Lula of Brazil: The Story So Far by Richard Bourne. It provided an in-depth and mostly accurate account of Lula’s tenure as president of Brazil. One particular passage was particularly striking. Bourne writes on page 170 that, “Talking to ordinary Brazilians, one is constantly asked, “If the country is so rich in resources, why are so many of us poor?'” And, “Why doesn’t this country get a move on?”

    After reading these sentences I began contemplating these intriguing questions. I also remember being asked by my Brazilian family and friends a similar question that went like this: “If Brazil is one of the largest economies in the world, rich in almost every natural resource, why are the Brazilian people still so poor?”

    Obviously there is no simple answer to this dichotomy. The social problems that plague Brazil, in fact, afflict most of the third-world. South Africa, India, Colombia and Mexico are a handful of countries that encounter similar social dilemmas.

    More importantly, today’s profound social inequalities are what I believe to be a product of historical failures that promoted exclusion and perverse inequality that is now beginning to be rectified. Even considering today’s modest advancements in equality much more investment to reduce social disparities is desperately needed.

    A few months ago I saw an editorial piece by daily Folha de S. Paulo columnist Eliane Cantanhêde where she began to reflect on this age old question. Her online piece entitled, “Que país é esse? (What country is this?)” notes that according to the World Bank, Brazil’s economy was the 10th largest economy in the world producing a Gross Domestic Product (GDP) of 1.585 trillion dollars nearly 2.88 percent of the world’s wealth, in 2005, and equal to half of the total economy of South America. She goes on to contrast this with the dire conditions many Brazilians endure despite living in one of the largest economies in the world (1).

    If you divide Brazil’s GDP by its 190 million inhabitants you calculate a per capita figure of about 8,342 dollars. This is an impressive figure for any third-world country although misleading. The per capita number assumes that all of the wealth is equally distributed. This is not true for Brazil or for any other country.

    The social conditions for the majority of the Brazilian people remain grossly unjust. In July 2006, the Superior Electoral Tribunal (TSE) released a detailed depiction of the national electorate. Nothing less than 73.3 million Brazilian voters, or 58.26%, of a total 127.4 million voters, did not complete the 4th grade (ensino primário).

    Of this group 8.2 million are illiterate (6.46% of all voters). Another 21.3 million voters told the TSE that they had basic reading and writing ability. The number of illiterates and semi-illiterates are an astounding 23.95% of all voters, equal to 29.5 million people, larger than the total number of voters in São Paulo, Brazil’s most populous state (2).

    70% of the electorate that is illiterate and never having completed primary school live in the Northeast region of Brazil. In the Northeast alone, 4.2 million people are illiterate, making it the region with more illiterates than the rest of the country combined (3).

    Only an estimated 7.1 million, or 5.65%, of all voters obtained a higher education degree (ensino superior). The silver lining is that number of voters who did not complete the ensino primário in 2002 was 62.49% of voters, a higher percentage than the current figure (4).

    After coming to terms with these figures I wondered how this hierarchy was built. I found a few of the answers to be in the historical formation of Brazil as a country.

    When Brazil abolished slavery in 1888 no land was redistributed to former slaves. Brazil, like the rest of Latin America, never completed a substantial land reform. Millions of Nordestinos, residents from the Northeast, fled to the cities of São Paulo and Rio de Janeiro in search of greater economic opportunity.

    Without public housing or decent paying jobs, many poor Nordestinos erected favelas (shantytowns) on public land. This migration and settling continues today. Also important was the fact that after the Brazilian Empire crumbled, in 1889, the all-powerful economic elite remained in firm rule over the new republic.

    The First Republic (1889-1930) was officially organized by a rural oligarchy nicknamed “coffee and milk”. The presidency rotated between the coffee barons of São Paulo and the farmers from Minas Gerais. Yet in 1894, due to property and illiteracy requirements, a small clique of wealthy Brazilians elected their first civilian president.

    The first civilian president, Prudente de Morais, was elected by 84% of the votes of the total 300,000 eligible voters. The total number of eligible voters made up 2.2% of Brazil’s total population. These elite members of society continued to exercise their exclusive right over the presidency and country’s future political, economic and social structure (5).

    It was not until the 1930 election that the number of voters surpassed one million voters. That year Julio Prestes won 57.7% of a total 1.9 million votes, yet the total number of voters in that election amounted to just 5% of Brazil’s population (5).

    By 1960, the last democratic election before the military coup of 1964, the voter base leaped to 12.6 million voters yet this was still less than a fifth of the total population (6). With the tacit approval of the middle-class and the rich, the military seized control of the country suspending democratic elections until democracy was restored in 1985. It was not until the Constitution of 1988 that voter enfranchisement extended to all Brazilians effectively giving illiterates the right to vote.

    The lack of democratization by excluding the masses from the vestiges of power had a devastating consequence on average Brazilians. The government was not a representative body to the interest of the majority of Brazilians. The state catered to elite interest of the country.

    The disparity of public education exemplifies the lack of commitment to the interests of the majority of the population. In 1960, South Korea and Brazil had 80% and 90% of its labor force, respectively, with less than 8 years of education. Both countries invested the same percentage of the GDP in education while both countries, at that time, were relatively poor.

    Brazil’s economy was beginning to show signs of economic distress while South Korea was in the midst of recovering from the Korean War. The one big policy difference between both countries is that throughout the decades, Korea invested 80% of their education budget went to elementary and high school. Today, the result is evident: only 20% of Korean workers have less than 8 years of education (7).

    On the other hand, Brazil, over these past decades, divided education expenditures by 50% between basic (elementary and high-school) and higher education. A sizable education budget developed world-class universities, which Brazilians should be proud of. The hope must have been that an elite segment of the population would spur the needed economic development for the rest of population. But after 3 decades the result of this strategy is visible: 80% of the labor force has less than 8 years of education (8).

    Besides the allocation of funds, the actual amount of funding in education was also pitiful. From 1970 to 1973, Brazil’s entire education budget equaled less than half the cost of Tucuruí, a 6-billion dollar power dam in the Amazon. During that time, 30% of the population could not read or write, fewer than half of all children finished high school and 4% of the total population went to college. As one author puts it, “It was as if the entire country was being prepared to compete in the 19th century” (9). The political class rules over the Brazilian people while governing for the entrenched elite.

    Thus it is not surprising that the level of inequality in Brazil remains perverse. According to the Institute for Applied Economic Research (IPEA) 10% of the population, equivalent to roughly 19 million people, garner a fortune equal to 75% of the country’s total income. The salary of the rich is 23 times larger than those who are poor. The current level of inequality is about the same as it was during the military era (1964-85) but remains slightly higher than prior to 1964 (10). Land inequality is also dominated by a handful of large-scale farmers exacerbating the rural conflicts.

    Black and White

    There is also a racial component to this injustice. Too many Brazilians believe that because of the country’s historical mixture of races that it has overcome racism, discrimination or prejudice. Much of the data emanating from the country tends to contradict these notions. One study from 1999 to 2005 demonstrates that most white Brazilians die of diseases while blacks tend to die from homicide (11).

    Other studies show that blacks and pardos (brown) make up the majority of unemployed in the country even though together they represent 42.8% of the working-age (12). According to the Brazilian Institute of Geography and Statistics (IBGE) blacks and pardos earn half the salary of what whites make.

    This gap in salary is in large part due to the sizable disparity in educational opportunities (13). Blacks and pardos also have lower life-expectancy, higher infant mortality and illiteracy rates than whites in every region. The fact that there are poor whites does not disregard that fact blacks and pardos must overcome greater obstacles.

    The poorest region is the Northeast region, where the majority of African descendents worked as slaves on the sugar field. It has the highest illiteracy rate in Brazil. Half of those who are poor in the country reside in the Northeast region. Unfortunately too many Brazilians want to avoid all of these racial disparities that exist by arguing that Brazil never legally excluded blacks like America or the Europeans.

    I feel that racism only manifests itself differently in Brazil due to its unique history. Predominantly white college-educated Brazilians also argue that the American and European concept of race is dividing Brazil between these artificial racial lines that did not exist in Brazil because of the historic race-mixing.

    My lens is that Brazil has always been a divided society and that racism, prejudice and discrimination does not end because of misogyny. I strongly believe that the elites conjured the myth of ‘racial democracy’ to sustain their hegemony over power and the state. The tiny elite in Brazil could not have physically excluded blacks and their descendants, like Americans or Europeans did, because the white Europeans were vastly outnumbered, until the 20th century, thus risking their economic and political grip over the country.

    Throughout Brazil’s entire colonial period it imported 3 to 4 million of a total 10 million slaves worldwide. In comparison, the United States of America imported a total of 500,000 to 750,000 slaves.

    The Brazilian political elites, in the early 20th century, saw blacks as a handicap to development. It believed that whiter population would make the country developed so the elites promoted a ‘whitening’ of the population through European immigration and race mixing to destroy the “genetically inferior” black race. American and European laws against race-mixing were obviously based on their racist mentality but ending this horrific practice alone did and does not eliminate deep-seated structural racism.

    The all-important tangible political, social and economic benefits elude too many Afro-Brazilians in Brazil and in fact for all black descendants throughout Latin America.

    Yet since 2002, Brazil is slowly trending towards greater income equality. Lula’s social and economic strategy is beginning to bring down income inequality. From 2001 and 2005, the income of the poorest 10% increased by 36% while the richest 10% saw a 1.2% decrease (14).

    According to pollster DataFolha, 28% of Brazilians say that their family earns “too little”, down from 45% before Lula assumed power in 2002. Almost 12 million electorates have left the lowest income categories, D/E, for class C making it the largest class with 46% of the population.

    Between 2006 and 2007, the richest A/B class fell from 18% to 15%, the social class C grew from 36% to 46% and the lowest D/E class collapsed from 46 to 39% (15). Since 2002 the Gini Index – the Gini coefficient measures income inequality in a society – shows inequality fell from .540 to .502 and IPEA (Institute of Applied Economic Research) expects it to further drop to .490 by 2010 (16).

    There are various reasons to explain the reduction in income equality. The supplemental income from Bolsa Família (Family Voucher) boosts the income of the poorest families. Almost all children attend elementary school, which will improve the average education of the population in the future further reducing income inequality. But more money needs to be invested in basic education especially in high school (ensino médio) of which only a third of Brazilians attend.

    Also the steady adjustments in the minimum salary from about 240 reais in 2002 to 415 reais (US$ 258) today coupled with stable prices improved the purchasing power for millions of working-class Brazilians. Unfortunately, inequality remains entrenched.

    The regressive tax system punishes the poor. According to IPEA director Márcio Pochmann, the poorest 10% pay 32.8% of their income in taxes while the richest 10% only pay 22.7% (17). A much more progressive tax code is urgently needed to find the necessary funding for the social problems that currently reside. 

    American journalists Bill Moyer on equality during a recent media reform conference:

    “Extremes of wealth and poverty cannot be reconciled with a truly just society. Capitalism breeds great inequality that is destructive unless tempered by an intuition for equality which is the heart of democracy. When the state becomes the guardian of power and privilege to the neglect of justice for the people who have neither power or privilege you can no longer claim to have a representative government.”

    Extreme inequality allows a powerful interest to exert a tight control over government.  Growing inequality in most of the world forces governments to be mere representatives of a plutocracy not of the people who democratically elected them.  Government is one important entity that can spur the redistribution of this wealth in a more equitable manner.  All segments of society from social movements, private sector to civil society must play a role in improving the current situation.  By reducing inequality, Brazil can strengthen its nascent democracy. 

    Clearly, the reasons outlined are only a few reasons for the historic inequality.

    Having a large economy, abundant natural resources, does not necessitate that the average person benefits the enormous wealth being produced.  Investment in basic education, and health care, for all is urgently needed but it only begins there.  Investment in other vital basic social services (sanitation, housing etc.) must be an integral component to any commitment to social and economic justice.   

    By 2050, it is expected that Brazil will have the 4th largest economy in the world.  Investing billions in upgrading the economy will not build a more accessible and equitable society.  The real question to contemplate is: will the projected economic growth bring about prosperity to all Brazilians or continue to exclude the vast majority while rewarding the few?   

    End Notes

    (1) Cantanhêde, Eliane.  “Que país é esse?” Folha Online.  19.12.2007. accessed 12/19/2007.  http://www1.folha.uol.com.br/folha/pensata/elianecantanhede/ult681u356519.shtml

    (2) Moraes, Marcelo.  “58,26% dos eleitores não completaram o ensino primário.” Estadao.com.br.  11.06.2006.  accessed 7/12/2006.  http://www.estadao.com.br/ultimas/nacional/eleicoes2006/noticias/ 

    (3) D’Elia, Mirella.  “Baixa escolaridade atinge mais de 50% dos eleitores, diz TSE”.  G1 globo.com.br.  16/01/2008.  accessed 2/8/2008.  http://g1.globo.com/Noticias/Politica.0,MUL262335-5601,00.html 

    (4) Moraes, Marcelo.  “58,26% dos eleitores não completaram o ensino primário.” Estadao.com.br.  11.06.2006.  accessed 7/12/2006.  http://www.estadao.com.br/ultimas/nacional/eleicoes2006/noticias/ 

    (5) Love, Joseph.  “Political Participation in Brazil, 1881-1969.”  Luso-Brazilian Review, Vol. 7 No. 2. (Dec., 1970) pp 9. 

    (6)IBID 

    (7) Caixeta, Nely.  “Educação” A Era FHC.  Ed.  Bolivar Lamounier and Rubens Figueiredo.  São Paulo: Cultura Editores Associados, 2002. pg. 548-49. 

    (8) IBID       

    (9) Henry, James.  The Blood Bankers.  New-York: Four Walls Eight Windows, 2003.  pg. 143

    (10) Graner, Fabio.  “Ipea aponta que 10% dos brasileiros concentram 75% da riqueza”.  Estadao.com.br.  15.05.2008.  accessed 5/19/2008.  http://int.estadao.com.br/Multimidia/ShowImpresSão.action?xmlPath

    (11) “Negros morrem mais de homicídio; brancos, de doença.” Folha de S. Paulo.  20.11.2007.  accessed 5/19/2008 http://www1.folha.uol.com.br/folha/cotidiano/ult95u346872.shtml 

    (12) Spitz, Clarice.  “Negros e pardos são maioria de desempregados, diz IBGE.  Folha Online.  17.11.2006.  accessed 3/25/2007.  http://www1.folha.uol.com.br/folha/dinheiro/ult91u112453.shtml 

    (13) Spitz, Clarice.  “Negros e pardos recebem metade de salários de brancos, diz IBGE”  Folha Online.  17.11.2006.  accessed 3/25/2007.  http://www1.folha.uol.com.br/folha/dinheiro/ult91u112452.shtml

    (14) “Brasil melhora em ranking de distribuição de renda”  G1 globo.com.br 10.04.2007.  4/27/2007.  http://g1.globo.com/Noticias/0,,MUI20272-5599,00.html  

    (15) Camacho, Karen.  “Quase 12 milhões de brasileiros deixam classe D/E.”  Folha Online.  26.03.2008.  accessed 4/2/2008.  http://www1.folha.uol.com.br/folha/dinheiro/ult91u386046.shtml

    (16) Ribeiro, Jefferson.  “Salário dos ricos é até 23 vezes maior que dos pobres, diz Ipea.”  G1 Globo.com.br.  23.06.2008.  6/23/2008.  http://g1.globo.com/Noticias/Economia_Negocios/0,,MUL611013-9556,00.html

    (17) Graner, Fabio.  “Ipea aponta que 10% dos brasileiros concentram 75% da riqueza”.  Estadao.com.br.  15.05.2008.  accessed 5/19/2008.  http://int.estadao.com.br/Multimidia/ShowImpresSão.action?xmlPath

    Daniel Torres is a political science and economics major at the University of Massachusetts. Comments welcome at dftorres@gmail.com.

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