Facts About Poverty in BrazilThough major improvements have stimulated Brazil’s economy over the past few decades, the country still faces a major poverty deficit. While the country does have one of the top 10 economies in the world, poverty in Brazil is still a major issue. The percentage of the population that lives beneath the poverty line struggles to make it from one day to the next. Four components that influence poverty in Brazil are the pertinent numbers, the unemployment situation, the influence on housing and the current global lockdown’s impact.

The Numbers

With over 200 million citizens, Brazil has the fifth largest population in the world. While the poverty rate is now impressively less than 10%, 16 million Brazilians still live unsustainable lives.

Many of the families living in poverty do not have access to education, clothing, clean water, food or fuel. Kim Lango, a humanitarian who has spent a number of years helping to relieve poverty in Brazil, told The Borgen Project in an interview that “We once drove a Pre-Med student home one evening only to discover his home only had three walls….” On their way to the house, Lango passed by dead and wounded people on the streets who were waiting for an ambulance that would only come if the family had sufficient funds.

According to a Getulio Vargas Foundation study, an alarming gap exists between the wealthy and poor, and it is increasing. Marcelo Silva de Sousa and Víctor Caivano state that Brazil ranks with the “most unequal nations in a broader region where the gap between rich and poor is notorious.” During the seven years of the study, the richest Brazilians increased their income by over 8%. However, the income of the poorest population decreased an entire 14%.

The gap shows Brazil’s drastic inequality. In fact, only 10% of Brazil’s citizens earn half of the income in the country.

Lango gave her perspective on some of the reasons for this gap. She first stated that “lack of access to adequate education[…] creates a vicious cycle.” Those living in unsafe and inadequate places often find themselves stuck there due to the rigor and expense of the education system. Lango also said that discrimination plays a significant role in this gap and that many consider poor people unsafe and ones they should not connect with.

While the poverty rates are startling, Lango offers hope: “the most beautiful acts of overcoming will always be from Brazilians helping their own people.”

The government has a welfare program devoted to alleviating poverty. The Family Grant, known as the Bolsa Família, offers a monthly allowance to families in poverty.

Unemployment

Another of the components that influence poverty in Brazil is unemployment. When a major recession hit between 2014 and 2016, the unemployment rate hit 13% and emerged as a major issue contributing to poverty in Brazil. While the unemployment rate had improved somewhat since then, it had yet to recover enough to significantly impact the poverty in Brazil.

Unfortunately, in 2019, Brazil’s unemployment increased to a 12.4% unemployment rate, leaving millions of Brazilians out of work and desperately searching for the means to make money. Still, the available jobs often have an informal and inconsistent nature.

According to Mark S. Langevin, Director of Brazil Works, Brazil has reached a “historic and dismal record” of citizens not contributing to the workforce. Langevin stated that the number is over 65 million.

Housing

Because of extreme poverty, many Brazilians do not have access to proper shelter, or even shelter at all. In fact, according to Habitat for Humanity, over 50 million people in Brazil do not have adequate housing. The country requires 6 to 8 million new houses to sufficiently shelter its people.

Habitat for Humanity is working to develop proper housing for those living in the slums. Due to the successful implementation of their programs, Habitat for Humanity is currently working on over 1,500 houses in Pernambuco, one of Brazil’s states.

A report determined that the 2010 census revealed that over 5% of Brazilians live in makeshift settlements called favelas. Brazilians often build favelas using materials that they scavenged. Moreover, these homes often do not have appropriate water access.

The government has been working since 1993 to improve these conditions. During that year, 20% of Brazil’s population lived in favelas, so the Municipality of Rio de Janeiro developed a program to help improve the housing and road access for those who lacked sufficiency in those areas. The program, the Favela-Bairro project, also funded social programs for children.

While some are making efforts to improve the conditions, the poor housing situation remains prevalent.

The Current Lockdown’s Impact

The last of the components that influence poverty in Brazil includes COVID-19’s impact on the country. With the current global lockdown due to Covid-19, poverty in Brazil could increase drastically. There are over 30 million informal workers who have unprotected jobs that the lockdown now threatens.

The lockdown has come at an unfortunate moment due to social program cuts that came as a result of the recession in 2014. During that time, many workers became sporadically self-employed, which severely weakened the economy.

Humanitarian groups have had to scramble to increase food programs. One of these groups, a Catholic relief group called Caritas, has oriented its focus entirely to providing food.

While those already in poverty or unpredictable work situations are facing an uncertain future, the government has begun to respond to the issue. It adapted the emergency aid fund rules to improve worker’s lives during the shutdowns. The banks have more restrictions and there has been a loan suspension for school funds.

Though the poverty here is vicious, wonderful programs, both governmental and humanitarian, are stepping up to fight the deficit. Hopefully, continued aid and government efforts will eradicate poverty in Brazil in the future.

– Abigail Lawrence
Photo: Flickr

Brazil’s Economic Recession
Brazil began the 21st century on an almost exclusively positive note. Before Brazil’s economic recession, people included it in the same conversation as Russia, India, China and South Africa, leaders of the developing world and countries poised to make considerable economic gains in the decades to come. The first years of the 2000s reinforced that perception, as Brazil’s economy continued to grow and expand. This prompted a bid for both the 2014 FIFA World Cup soccer tournament and the 2016 Olympic Games. In 2007, FIFA granted Brazil the event, and in 2009, the International Olympic Committee announced Rio de Janeiro as the host for the 2016 Games.

Economic Depression

These highly visible international events combined with the emergence of Brazil in the international arena seemed to legitimize the country’s efforts. However, after Dilma Rousseff took over for the highly popular Luiz Inácio Lula da Silva, government spending ballooned, partly due to the infrastructure required to host international sporting events. Under her direction, Brazil suffered its worst economic depression on record.  The government’s spending, combined with mismanagement of inflation, a decrease in consumer spending and the sharp decline in oil prices in 2015, produced a two-year slide that embodied Brazil’s economic recession, and poverty naturally increased as a result of all of these factors.

 This sharply contrasts with the efforts that Lula da Silva undertook to mitigate poverty and economic hardship as the leader of Brazil’s Workers’ Party, lifting 36 million people out of poverty. In a resounding success for him and Rousseff, by 2014, unemployment reached its record low, the U.N. removed Brazil from its Hunger Map, and the number of people living during Brazil’s Economic Recession in poverty dropped to 5.2 million. In 2017, however, more than 14 million people found themselves homeless and in extreme poverty, according to the World Bank’s definition of less than $1.90 U.S. a day. The situation was more grave than just poverty and homelessness, as a study conducted between 2012 and 2017 intimately linked the effects of Brazil’s economic recession and poverty with adult mortality. It found that there was an uncanny correlation between the state unemployment rate and the mean municipal mortality rate.

Reasons for Brazil’s Economic Recession

How did a country with such promise and success completely reverse course and regress so quickly, resulting in Brazil’s economic recession and poverty? Dilma Rousseff increased public spending upon entering office in 2011, raising the minimum wage and promoting expanded lending by the state’s banks. Simultaneously, the central bank’s discount rate dropped, sparking inflation which Rousseff exacerbated by cutting sales tax and lowering prices on food, gasoline and bus fares. One entity hurt most by this was Petrobras, the Brazilian state-run oil company, as investments stalled. Rousseff boosted wages to combat inflation, but this did not work. Inflation outpaced wages and resulted in inhibited consumer spending. When oil prices fell in 2015, the dollar strengthened and companies cut production and jobs as the currency-the real-collapsed, increasing the expense of imports and further raising inflation. To make matters even worse, Brazil experienced a political crisis in the midst of this, as the government impeached Dilma Rousseff for improperly moving government funds between budgets, and threw Lula da Silva in jail for corruption.

Looking Forward

The peak of the crisis came in 2017, and the economy recovered to its 2014 level, but experts caution against optimism. A BBC article in May 2019 identified four things wrong with the Brazilian economy, recession and poverty. It said that no economic recovery lies on the horizon, unemployment still runs rampant at 12.7 percent, the election of Jair Bolsonaro did not bring the anticipated market rally and the fiscal deficit still grows. It looked in May like the worst would occur, as the country’s Gross Domestic Product shrank by 0.2 percent during the first quarter of 2019, even though it aligned with the forecasted 0.5 percent annual growth.

 Much to the relief of many, the second quarter provided a rebound of 0.4 percent, a surprise to those most knowledgeable in Brazil. Little consolation came to President Bolsonaro, though, as his reform agenda did not produce the immediate results he had hoped. Still, his administration intends to focus on reforms to pensions and the government’s overall structure, to the praise of the International Monetary Fund. The IMF said that these reforms could boost the Brazilian GDP by 2.4 percent in 2020 and that Brazil could make more improvements with an opening of the country’s tariff and non-tariff barriers and a commitment to closing the infrastructure gap. Reuters agrees that the future of Brazil as an economy and emerging market hinges on fiscal reforms, that will hopefully put the last five years of Brazil’s economic recession and poverty behind them and return to the pace that Lula and Rousseff set.

– Alex Myers
Photo: Flickr

Facts About Poverty in South America
Substantial parts of Africa, Western Asia, South America and the Caribbean are regions that grapple with scant economic growth and poverty. South America alone consists of twelve sovereign states, most of which are subject to low per capita GDP and high rates of poverty. Here are ten facts about poverty in South America:

10 Facts About Poverty in South America

  1. South America (SA) suffered the onslaught of European colonization roughly from the 15th to the 17th Centuries. The Iberian colonial policies led to uneven distribution of land and insecure property rights, which in turn contributed to persistent economic and political inequality until the 19th and 20th Centuries. Oxfam reported in 2016 that Latin America still has the most unequal distribution of land in the world, which in turn “limits employment; increases urban poverty belts, as people are expelled from rural areas; undermines social cohesion, the quality of democracy, environmental health; and destabilizes local, national and global food systems.”
  2. In 2016, there was an estimated rise in poverty in SA from 28.5 percent in 2014 to 30.7 percent. In fact, 61 million people live in extreme poverty and 220 million people live on less that $10 a day in this region.
  3. The entire region of SA was majorly affected by the economic crises of the two largest countries on the continent — Brazil and Argentina between 1998-2002. By 2001, the IMF feared that Argentina’s fiscal policy, public debt and currency board would become unsustainable. The holdouts case in Argentina (2005) and the Petrobras scandal in Brazil (2014) later created a chaotic and fragile economic scenario. In fact, Argentina is still trying to recover from high inflation and its currency crunch. Brazil’s external debt in 2017 was 26.5 percent of its nominal GDP and government debt was 74.04 percent of the GDP. Venezuela’s wavering economic policies, economic collapse and inflation have also contributed to the scale of poverty in the region.
  4. Of the ten facts about poverty in South America, eco-political causes hold a special mention. Discovery of rampant corruption and bribery in Brazil’s state-controlled oil giant, Petrobras, and other industries led to largescale arrests of company officials and many politicians. This in turn caused a loss of jobs for thousands of employees and a huge economic set-back. A dip in international oil prices further affected the Brazilian economy, as did the the arrest of Odebrecht’s chief executive and lay-offs in 2015. The unemployment rate in Brazil remains at a high of 11.8 percent. Argentina, too, has suffered the economic consequences of a sovereign debt default since 2001. It has encountered a decline in GDP and inflation, resulting in recession. The MIT Billions Project in 2014 quoted an annual inflation rate of 40 percent in Argentina. Venezuela is on the verge of defaulting its foreign debt and has encountered a massive decline in its GDP accompanied by inflation. Ever since the 2014 economic recession, Venezuelans have been suffering from poverty, high mortality rates, unemployment, lack of medical facilities and hunger.
  5. Large-scale unemployment followed by economic recession, strict government regulations, corruption and other factors have led to the creation of a parallel or informal economy in many of these SA countries. These illegal businesses evade state-regulations, taxation, social security contributions, market standards, minimum wage/work hour policies and thrive as shadow economy. While a certain portion of the money earned is spent directly on the official economy, these underground businesses lead to tax evasion, reduced tax revenue, increased tax rates, lower wages and work hours, corruption and inflation.
  6. According to the World Hunger Report, despite being successful in tackling food insufficiency, SA saw a rise in undernutrition from 5 percent in 2015, to 5.6 percent in 2016. As of 2018, the economic crisis in Venezuela led to devastating food shortage and starvation. The United Nations Organization for Food and Agriculture estimates that more than 42 million people in South America are suffering from hunger.
  7. The Word Bank observes that while more children have started going to school, there still remains a disparity in access to education based on the huge income gap in these countries. The other factor affecting education lies in the urban-rural divide, with the latter having lower rates of secondary-school enrolment.
  8. Brazil and Colombia, which make up a large portion of the region’s population, have been experiencing a decline in fertility and mortality rates alongside new health problems from industrialization and urbanization. The health infrastructure in these countries are not up-to-date and people have limited access to safe water and sanitation facilities. Economic inequality adds to the lack of equal distribution of health services and access to healthcare.
  9. Despite the scale of poverty in SA, consistent steps are being taken to ameliorate poverty across the region. Oxfam has been urging the governments to redistribute land evenly, protect territorial rights of indigenous communities, prevent depletion of natural resource and establish fair taxation. The U.N.’s Food and Agriculture Organization and the International Fund for Agricultural Development have been proposing ways to end rural poverty and increase employment. Since the 1990s, attempts have been made by the governments to improve the healthcare system through reforms. Several banks have been trying to ease the monetary policies and rates of interests.
  10. The 2018 World Economic Situation Prospects Report states that the region’s economy has grown by one percent in 2017 and is expected to increase to 2.5 percent in 2019. The recovery will be largely a result of improved economic activity in SA.

Future Efforts

The ten facts about poverty in South America listed here provide a general yet critical understanding of aspects of poverty in the region. Unequal land/wealth distribution, corruption and eco-political instability still remain some of the common and overarching reasons behind the region’s struggle with poverty and its aftereffects.

– Jayendrina Singha Ray
Photo: Flickr

Causes of Poverty in Croatia
Croatia, a beautiful country home to numerous tourist destinations, is quickly becoming the EU’s poorest and slowest growing nation. With 19.5 percent of the population below the poverty line and an unemployment rate of almost 12 percent, the situation is dire.

While these numbers may not seem especially concerning, they are deceiving, as significant income disparities exist in Croatia. The poor in Croatia experience greater income differences among themselves than most countries. Those living in small towns in the east and southeast regions and in rural areas are especially at risk.

These areas suffered the most from the Homeland Wars in the 1990s. The wars and the corrupt privatization of state-owned companies hurt Croatia’s industrial sector. Once an industrial powerhouse, Croatia now has turned to a less dependable and less lucrative service-based economy that relies on tourism for jobs and income.

 

Main Causes of Poverty in Croatia

 

  • Rising Foreign Debt: Croatia’s external gross debt has risen to €46.4 billion, which equals 108 percent of the annual GDP and is an all-time record. The debt is still trending upward and shows no sign of stopping. Consequently, Croatia’s credit rating continues to drop and the country cannot accumulate as much of the foreign aid it desperately needs.
  • A Six-Year-Long Recession: The Great Recession of 2008 severely impacted the Croatian economy for years. During this period, child poverty increased by more than 50 percent. The recession exacerbated issues already present in the Croatian economy and is a large reason why the country’s growth rate remains under 2 percent. Furthermore, the poor economic performance has contributed to a doubling of the public debt that has resulted in high taxes and fewer jobs.
  • High Unemployment: The last of the main causes of poverty in Croatia is high unemployment, especially among youths. Among those aged 15 to 24, Croatia has the third highest unemployment rate in the European Union. The youth unemployment rate reached an all-time high of 49.8 percent in 2013 and currently fluctuates around 30 percent.

 

However, Croatia is working to improve these conditions. For example, as a member of the European Union, it has committed itself to the Youth Guarantee Programme. Through this initiative, Croatia receives funding from the EU to build a support system for Croatian youths that would feature more opportunities for vocational education and apprenticeships in the public and private sectors. The goal of this program is to ensure that youth members receive a job offer within four months of registering as unemployed.

Croatia also is implementing the Strategy on Combating Poverty and Social Exclusion in Croatia (2014-2020), which aims to reduce poverty and social exclusion in Croatia through a regional approach. Through initiatives like these, the government hopes to address the causes of poverty in Croatia and lift itself into economic prosperity.

Lauren McBride

 

Hunger in Spain
2008 may seem like a distant memory to many, but to those still suffering the repercussions of Spain’s recession of the same year, the time has crawled by. Despite economic growth, poverty and hunger in Spain continue to affect millions.

Spain’s recession saw devastation throughout the city streets. Mothers with their children and young adults who had just begun to learn the feeling of job security, rummaged through discarded bins of leftover produce: their next meal. At local wholesale fruit and vegetable markets, produce that had rolled off trucks was spotted and hastily collected by hungry onlookers. Those not willing to scavenge in the streets turned to food pantries.

Food pantries and soup kitchens saw a 33 percent increase in visitors, all of whom had never required previous nutritional aid. Families met with the new and unexpected inability to provide for themselves felt deeply ashamed for seeking such help. Some families would even visit pantries in neighboring towns to avoid meeting anyone they knew. That was in 2012, already four years deep into the recession. Economic recovery was slow, and there was little progress toward ending hunger in Spain.

The city of Girona retaliated with a disheartening response. Instead of solving the issue of hunger, the city decided only to solve the issue of public scavenging. The city padlocked all of its supermarket trash bins. The locks were deemed a “public health precaution.” However, no such precautions were taken to aid those who had been forced to scavenge in the first place.

Miraculously, between 2015 and 2016, certain individuals set out to tackle hunger in Spain by way of repurposing food waste.

In the Basque town of Galdakao, Alvaro Saiz created Solidarity Fridge. It’s exactly what it sounds like: based on cooperation and mutual support, this fridge sits on a sidewalk in a small fenced in area. Individuals, restaurants and stores can bring their perfectly good leftovers to the fridge. Then, those in the area who are unemployed or tight on cash can take what they need.

Saiz said the idea for Solidarity Fridge started with the 2008 economic crisis. The pictures of people searching dumpsters for food got him thinking about how much food is wasted daily.

Mireia Barba went right to the source with another method to combat hunger in Spain. Barba is the founder of Espigoladors, meaning “gleaners,” an organization that takes to the fields of Catalan post-harvest. It may come as a surprise to most regular grocery shoppers, but farmers discard massive amounts of unwanted crops considered unmarketable. Espigoladors coordinates with farmers to harvest their unwanted crops and deliver them to food banks.

Like Solidarity Fridge, Espigoladors emerged out of necessity in the aftermath of the recession. Europe wastes an appalling 88 million tons of food each year, which translates to about $168 billion. In addition to feeding the hungry and improving diets, gleaning can also reduce pressure on land use and provide work for the socially excluded. The Espigoladors initiative seemed a logical solution in a country suffering from economic strain and hunger.

It is amazing what simple neighborly compassion can do in a time of need. It will take hard work and continuing innovation to improve hunger in Spain. Solidarity Fridge helped local businesses recognize the corners they were cutting by throwing out leftovers, and Espigoladors returned to the source of the hunger crisis. The bottom line is this: Spain won’t get to the root of the problem without getting a little soil on its hands.

Sophie Nunnally

Photo: Flickr