Brazil

During the last century, Brazil was one of the fastest growing economies in the world. Between 1901 and 2000, Brazil's Gross Domestic Product (GDP) per capita grew at... Show More + an average annual rate of 4.4 percent. Brazil's long-run growth has rivaled that of counties such as South Korea, universally praised as a stellar performer. Brazil does not received the same praise. Perhaps one reason is that more has been expected of Brazil, especially by Brazilians themselves. After all the country is richly endowed with natural resources and is blessed with an energetic people. Perhaps is that economic growth in Brazil has been more erratic than in other countries, or it may be that this economic growth performance has been accompanied by high inequality, thus diminishing the "quality" of growth. How is it that the country with the fastest growth in the region also has the highest inequality? Are the two facts related, and if so, what can be done to improve the pattern of future income growth across the social classes, and reduce its extreme inequality and the breadth and depth of its poverty? The first volume summarizes the overall conclusions for policy drawn from the seven background papers presented in the second volume, and other relevant research, as well as giving a historical account of the driving forces behind Brazilian growth since the 1960s. Show Less -

This report, conducted jointly by researchers in Brazil and at the World Bank, aims to address the debate on how the Brazilian labor market functions. It does so not... Show More + by focusing on labor market functioning but on its outcomes. What is central are labor market outcomes, such as adequate employment growth so that job-seekers can find gainful employment, acceptable worker productivity levels that are fairly compensated, and reasonable income security for workers and their households. This report is structured as follows: Chapter 1 argues that labor laws have begun to show signs of obsolescence. Chapter 2 shows this is reflected in deteriorating outcomes. Key indicators--employment growth, labor force participation, unemployment rates, and income security--all point to worsening labor market functioning since the mid-1990s. The report then examines how changed macroeconomic circumstances call for changes in labor market institutions, regulations, and interventions. Using a characterization of the economy in which informality has a central role, Chapter 3 illustrates the correspondence between the three main macroeconomic phenomena of the 1990s--greater openness, stabilization, and fiscal adjustment--and Brazil's labor market priorities. Chapter 4 concludes that the labor market has signaled the shortage of educated workers since the 1990s, and the onus is now on the education and training systems to respond. Analysis of how Brazil's labor market functions in Chapter 5 points to evidence that indicates that Brazil's poorer workers and smaller firms are especially disadvantaged by how the labor market functions. The report identifies three sets of priorities for reform: changes in mandated non-wage benefits and minimum wage setting to price labor correctly and encourage empoloyment growth (Chapter 6), changes in severance legislation and functioning of labor courts to better align incentives and increase productivity (Chapter 7), and improvements in interventions to increase income security for all workers (Chapter 8). Chapter 9 summarizes and highlights the main policy implications. Volume 2 contains in-depth examination of the issues of interest in Brazil and the relevant international experience, on which Chapters 1 through 8 of the first volume are based. Show Less -

This report finalized in March 2001 constitutes a step toward the objective of designing an integrated strategy for rural poverty reduction in Brazil, The report contains... Show More + an updated and more detailed profile of the rural poor in the northeast (NE) and southeast (SE) of Brazil; identifies key determinants of rural poverty in these regions; and proposes a five-pronged strategic framework in which to couch a set of integrated policies that could effectively help to reduce rural poverty in Brazil. This tentative set of policy options was identified via an analysis of rural poverty determinants complemented with an evaluation of relevant current public programs and six in-depth thematic studies that bear on critical components of the proposed integrated policy approach aimed at reducing rural poverty in the NE and SE of Brazil: 1) the dynamics of the Brazilian small farm sector, 2) rural labor markets, 3) rural land markets, 4) rural non-farm employment, 5) rural education, and 6) rural pensions. While this study emphasizes primarily microeconomic events--such as the impact of schooling, income transfers, and access to land and credit--poverty reduction requires both economic growth (macro-level) and specific anti-poverty policies (micro-level). Show Less -

This report addresses the role public expenditure can play in the alleviation of poverty in the Brazilian northeast, involving both regional growth, and social services.... Show More + Notwithstanding relatively high growth in the past two years, the northeast lags behind the rest of the country, with a per capita GDP just under sixty percent of the country's GDP, with no significant variations since 1965. Based on national statistical data, the study identifies private investment as a principal determinant of regional growth, and, although public investments do not appear to effect growth directly, it does indirectly in so far private investment can be stimulated. The analysis further indicates that certain type of infrastructure investments, that lower local cost of production in the region (i.e., electric power, and water supply) are associated with increased private investment. However, public infrastructure investments (i.e., transportation, and communication) that increase regional integration with the rest of the country, have mixed effects. Results largely confirm that public investment should be complementary to private investment, by providing goods, or overcoming other market failures, rather than substituting for private activities. And also, results point to a possible interregional externality, i.e., that the returns to state investments in education may well accrue to other states. It is suggested that infrastructure supporting the creation of off-farm employment is necessary, that guiding urban development is a high priority, while in the short-run, agriculture will remain a prominent feature of the northeast economy. Show Less -

The first central message of this report is that Brazil has over the last years achieved great progress in its social policies and indicators. The second central message... Show More + is that poverty remains unacceptably high for a country with Brazil's average income levels. The worst remaining income poverty is mostly concentrated in the Northeast region, and in the smaller urban and rural areas. The third central message is that, with decisive action, Brazil can achieve ambitious targets for further improvements in social indicators, including the objective of reducing the rate of extreme income poverty by 50 percent by the year 2015. Poverty is a complex and multi-dimensional phenomenon. Recognizing the rich literature on poverty in Brazil, this report attempts a few specific contributions. First, it presents a new 1996 poverty profile with a breakdown by city size, incorporation of the imputed value of owned housing, and regional price deflators. Second, it provides analysis of the incidence of selected public social spending based on the 1996/7 "Pesquisa sobre Padroes da Vida (PPV)." Third, it selectively synthesizes other work on poverty in Brazil in order to present an overview of cross-sectoral comparisons of the effectiveness of policy interventions. Fourth, it provides suggestions and selective inputs for devloping a national poverty reduction strategy. The report updates a previous World Bank assessment (report no. 14323) and builds on earlier work on urban poverty strategy. Show Less -

Although the State of Ceara, in Brazil, is a model of good economic, and fiscal performance given its poverty status, recent analysis show poverty remains severe, in... Show More + spite of significant reductions over the last decade. The combination of good governance, and sound fiscal management, industrial promotion, and public investments have been successful, but the report questions whether different policies, could have led to higher growth, and poverty reduction, or, whether it is simply a matter of time to further reduce poverty rates. Arguably, Ceara can continue to develop economically, based on favorable assets, such as agriculture, or tourism, on a large labor force with wages comparatively low by Brazilian standards, and on fiscal responsibility. But development is constrained by low productivity, low education levels, and by large populations living in stagnant regions, where water accessibility is limited. While alternatives either suggest to: strengthen the existing policy on industry development; focus on massive public investments, namely education, and infrastructure; or, exercise an explicit welfare strategy, recommendations stipulate improvements in education, development of public-private partnerships, removal of industrial incentives through reform policies, implementation of institutional framework for water resource management, and, overall social safety nets to reduce poverty. Show Less -

The authors estimate that about 24 million Brazilians, 17.4 percent of the population fell below the poverty line in 1990. Measures of poverty encompass many dimensions... Show More + including low income, hunger, and poor health, just to name a few. Poverty in Brazil today is commanding more attention as President Cardoso has made social justice a priority for the administration. The concern lies in the fact that during the 1980s the number of poor rose by about 1 million and became more visible because that increase took place in urban areas. The concern also lies in the fact that mechanisms that enabled Brazil to reduce poverty in the 1960s and 1970s, ie expanding formal sector employment, rising wages, migration to the large cities of the Southeast, were reversed in the 1980s. All this in mind, it is still noted that the level of poverty in Brazil is well above the norm for a middle-income country, even so the authors estimate that for a cost of less than 1 percent of the GDP a government could improve significantly the welfare of the poor. The authors suggest policies which would increase levels of education, thus decreasing population growth and illiteracy among the poorest groups. Also suggested are employment programs for both rural and urban areas, pointing out the need for off-season employment for rural workers, as well as greater opportunity for land ownership. For urban areas, an expansion of the formal sector is suggested. Finally the authors cite the need for stronger social safety net programs, ie an increase in social program spending and social security benefits to increase levels of health, education and decrease risk in unemployment situations. Show Less -

This report assesses Brazil's current macroeconomic situation against the background of recent stabilization attempts and medium-term prospects. Volume 1 contains four... Show More + main chapters. The first provides some background on the economic developments during the last few years. The second chapter covers 1988 economic developments, particularly the Government's June economic program. The third chapter assesses 1988 macroeconomic performance. The last chapter deals with some of the main issues facing the Brazilian economy today, such as inflation, the fiscal deficit, the burden of the internal and external debt, and the need to increase investment, particularly private investment. Volume 2 contains seven annexes, including recent economic trends, recent developments and prospects on fiscal policy, performance of public enterprises, monetary policy and internal debt, and external debt. An analytical evaluation of the interrelationships among fiscal deficits, monetary policy and inflation is the subject of annex seven. Show Less -

This report synthesizes country working papers on the effects of the Latin American depression of 1980-86 on the poor. It reviews the economic background to the present... Show More + situation: decades of rapid development, crisis and depression. The social consequences of the depression are reviewed: employment and unemployment, the rural urban balance, wage trends, social services and social indicators. A concluding section follows, which suggests that the effects of the crisis on the poor are extremely serious; that it would be unwise to wait for resumed growth before reforming government agencies dealing with health, education, nutrition, and other social services. The emphasis must be on targeting the most vulnerable groups in society and on reallocation of public social services away from the middle classes and in favor of the poor. Show Less -

This special report on Brazil focuses on population dynamics and on the development of human resources or, from a somewhat different point of view, the provision of... Show More + basic services in the broader context of development. Its aim is to facilitate the search for effective policies and efficient programs. The specific objectives are: (i) to assess the historical evolution of various socioeconomic indicators; (ii) to relate the evolution of these indicators to a broader historical framework of population and development; (iii) to analyze available data and estimate the quantitative relations between variables pertaining to population dynamics; human resource development; and labor markets, income distribution, and basic macroeconomic variables; and (iv) to articulate these quantitative relations in simple simulation models and to analyze costs and outcomes of selected policy interventions. The report concludes that the benefits of rapid economic growth have not been distributed evenly and that meeting the basic needs of the entire population is a political rather than economic issue. Show Less -