The poorest people in Brazil have seen their income grow at a much faster rate than the richest over the last decade. While other BRICS countries have seen significant increases in income inequality over the last decade, Brazil has bucked the trend in a manner that demands attention with income levels amongst the poorest growing faster than the Indian economy as a whole.
The ODI research paper ‘Building blocks for equitable growth; lessons from the BRICS’ identified four key factors central to securing fairer growth:
- Access to assets, above all skills, enables people to participate in activities that generate income; Brazil has, for example, been successful in increasing people’s access to assets through conditional cash transfer programmes that incentivise improvements in maternal and child health and education
- Investment in productive activities that generate jobs and opportunities for the majority; Although this is not explicitly mentioned as one of the key reasons for Brazil’s equitable growth pattern, the Brazilian government has placed emphasis on stabilising the economy in order to enable investment in productive activities and generate jobs.
Social transfers guaranteeing minimum incomes. Here, Brazil has been successful in reaching the elderly and children through targeting households rather than individuals with social entitlements.
A political economic context that has inclusion as a priority. In Brazil, principles of social inclusion are embedded in the Constitution, and are also protected by a series of checks and balances. Large social transfer programmes have been implemented to promote social inclusion, and transparency and scrutiny have curbed corruption and other malpractices.
“Brazil’s success demonstrates that economic stability, expansion of social protection and consolidation of reforms are key elements in achieving fairer growth.
We know that focusing on families, and children as well as specific policies such as minimum wage increases and increased social expenditure have paid dividends.”