The World Bank In Brazil

In Brazil, structural bottlenecks resulted in a meagre average GDP growth (0.6 percent) over the past decade, despite favorable demographics. Productivity growth remains weak, due to a complex tax system, a cumbersome business environment that discourages entrepreneurship, slow and unequal human capital accumulation, ineffective State intervention policies (at the sectoral level), low savings, and compressed public investment to accommodate higher current spending and increasing pension obligations.

The COVID-19 pandemic left Brazil with one of the highest global death tolls, but a rapid vaccine rollout program launched in mid-2021 and a comprehensive economic support policy contributed to a return to relative normality. As of March 30, 2023, 85 percent of Brazilians had received at least one dose of the vaccine, and 77 percent had received two.

In 2022, real GDP grew by 2.9 percent, largely propelled by household consumption, which advanced 4.3 percent in the year. The labor market recovery continued, as unemployment dropped to 7.9 percent by December 2022—the lowest level since 2015—with improved labor conditions for women, youth, and Afro-Brazilians. Brazil’s unemployment rate increased to 8.4 percent in January 2023, interrupting a sequence of ten consecutive retreats in the margin, and 0.5 percentage point above the levels of December 2022, but still 2.8 percentage points below January 2022. Additionally, labor force participation stood at 61.9 percent in January 2023 (down from 62.3 percent in January 2022), and closed below prepandemic levels (63.3 percent).

Inflation has been a persistent challenge for Brazil: its peak at 12.1 percent in April 2022 led to a significant monetary tightening cycle that brought the policy rate to 13.75 percent in December 2022. Fiscal consolidation continued in 2022, supported by higher revenues (8.2 percent of real growth), economic recovery, and favorable terms of trade. As a result, Brazil’s primary surplus stood at 1.3 percent of GDP (0.6 percentage point higher than in 2021), and public debt reached 72.9 percent of GDP (down from 78.3 percent in 2021).

In 2023, real GDP growth is expected to slow to 0.8 percent due to monetary tightening, still high inflation, and subdued global demand. Together, these factors are likely to depress private consumption, exports, and investment. On the fiscal front, public debt is expected to increase gradually to 78.5 percent of GDP by 2025 due to higher refinancing costs, and temporary higher social expenditures. Restoring sustainability still represents one of the most urgent economic challenges for Brazil, despite the ongoing fiscal consolidation achieved throughout 2021–22. The medium-term growth outlook is also subject to risks if total factor productivity remains at current levels. Achieving a higher potential output trajectory would require a revitalized impulse toward implementing structural reforms that could boost and support both investment and productivity.

An expansion of federal social transfers continues to play a key role in providing income support to the poorest segments of society and reducing poverty rates. These transfers contributed to reducing poverty rates to 24.3 percent in 2022, down from 28.4 percent in 2021 (the poverty rate is based on the US$6.85/day, PPP). An overhaul of the Bolsa Família program, including an extra benefit of R$150 per child (ages 0–5) in all recipient families and a strong consolidation effort, is expected to contribute to a slight reduction in poverty to 23.9 percent in 2023. Further reductions may occur as the economy recovers, but they will remain volatile in the absence of stronger investment in human capital among the less well-off.

Striking the right balance between protecting the poor and ensuring public finance sustainability, including at subnational levels, will be a key policy challenge in the years ahead.

Supporting the transition to a greener and more resilient growth model also remains a major challenge. Brazil holds more than 60 percent of the Amazon rainforest, the largest tropical forest in the world. It also has a high share of renewables in its energy matrix, but its high exposure to climate risks and deforestation calls for a strong reform agenda to address these challenges.

Due to the recent increase in deforestation emissions, Brazil is no longer on track to meet its national determined contribution (NDC) targets: a 37-percent reduction in greenhouse gas emissions by 2025, and a 43-percent reduction by 2030, relative to 2005 levels. In addition, Brazil has yet to develop an integrated long-term national strategy to achieve its climate goals. Recent reforms in the infrastructure sector, together with the federal administration’s renewed interest in the climate agenda, provide sound opportunities for Brazil’s green recovery and for lifting millions of Brazilians out of poverty.

Last Updated: Apr 27, 2023

The World Bank Group’s twin goals of reducing poverty and promoting shared prosperity are as relevant as ever in the current Brazilian context, given that preexisting economic, social, and climate challenges were aggravated by the COVID-19 pandemic. As the country emerges from unprecedented overlapping shocks, it faces the aggravation of some preexisting structural challenges, namely: high inequality; low levels of educational attainment; deterioration in the poverty outlook and in human capital accumulation; high public debt; infrastructure bottlenecks; low total factor productivity; and mounting pressures on natural resources, including deforestation.

Brazil remains systemically important for the world’s economy and natural assets, including the Amazon (60 percent of which is in Brazil). The country contributes to global public goods, and serves as a policy innovation lab with relevant lessons for other countries, as demonstrated by its experience with Bolsa Família (BF), the Food Purchase Program (Programa de Aquisição de Alimentos—PAA), and Crop Bonds (Cédula de Produto Rural—CPR), among others.

The World Bank Group has been working with the Brazilian government to address capacity, institutional, and regulatory gaps in the way of the country’s sustainable recovery and accelerated inclusive growth—at both the federal and subnational levels. In addition to addressing the immediate impacts of COVID-19, a green, inclusive, and sustainable recovery from the pandemic calls for reforms that support fiscal sustainability, poverty reduction, and productivity.

 The Country Partnership Framework (CPF) for Brazil covering FY18–FY23 is supported by three pillars:

1.       Fiscal sustainability and improved service delivery. This pillar focuses on fiscal adjustment support at the federal and subnational levels, including pension and social protection systems. It also addresses greater efficiency in public service delivery, especially education and health.

2.       Productivity growth and private sector investment. Goals under this pillar relate to efforts to reduce the regulatory barriers that undermine competitiveness, as well as to correct distortions in the credit market and mobilize investment in infrastructure.

3.       Inclusive and sustainable development. The goal here is to support Brazil’s ambitious nationally determined contribution (NDC) under the Paris Agreement by promoting global partnerships.

In May 2022, the Performance and Learning Review (PLR) for Brazil took into account evolving government priorities and the unprecedented impact of the COVID-19 pandemic on the country. Based on this, the PLR proposed to focus the remainder of the CPF implementation on addressing the impacts of the pandemic and supporting a greener, more inclusive, and fiscally sustainable recovery. This is being done through a mix of WBG financing, analytics, and institutional strengthening efforts. Preparation of a new CPF (FY24 onwards) has begun recently, reinforcing the role of fiscal sustainability in promoting (i) productivity-led growth, (ii) inclusion, and (iii) climate action.

Brazil’s new administration is now facing the challenge of ensuring recovery from past shocks and building a future with more opportunities for the entire population. In this regard, the Opportunities for All—Brazil Policy Notes 2023 proposes a priority agenda around issues of fundamental relevance for Brazil's recovery and future resilience. The Policy Notes are based on seven recent World Bank Group reports and are addressed to policy makers and Brazilian society. This document provides the WBG’s diagnosis of Brazil’s main economic and social development challenges, and charts a possible course to address them.

Last Updated: Apr 14, 2023

Brazil’s project portfolio spans across all key sectors of the country’s economy and has had significant positive impacts on people’s lives—including, in particular, the most vulnerable. The IBRD portfolio includes 22 active projects with a net total commitment of US$3.65 billion, and another four projects financed by Recipient-Executed Trust Funds with a net total commitment of US$160 million.

The next section presents some highlights of the World Bank’s operations in Brazil, divided by the three pillars of the Country Partnership Framework (CPF).

Pillar 1. Fiscal Sustainability and Improved Service Delivery

Education

In the 15 years prior to the pandemic, the quality of education in Brazil had been improving slowly and gradually. However, despite this moderate progress, learning levels lagged behind comparable peers. This challenge is illustrated by the fact that, in 2019, 4 out of 10 Brazilian youths had not finished secondary school by the age of 19. Furthermore, a significant share of children under the age of 3 still lack access to early childhood education. Altogether, these facts impose a number of obstacles to economic and social development, which will be exacerbated as a result of the pandemic.

In this context, the Bank has consistently engaged with Brazil through investment projects that, in addition to providing financial support, also help to strengthen local capacity by sharing global expertise and knowledge.

The Support to Upper Secondary Reform in Brazil Operation advocates an ambitious reform in the upper secondary school curriculum across the country. Along with financial support to expand the full-time school network and implement a competence-base curriculum, this US$250 million project addresses some of the new challenges brought about by the pandemic, including: (i) introduction of a hybrid model that is compatible with the new curriculum; (ii) lack of connectivity at schools; and (iii) infrastructure to facilitate distance learning.

The US$250 million Recovering Learning Losses from COVID-19 Pandemic in Brazil project promotes learning acceleration strategies concentrated in the most vulnerable states in Brazil’s North and Northeast. This Program for Results (PforR) will support the Brazilian strategy to promote learning recovery and address the increase in school dropout rates resulting from the health emergency crisis.

Another five multisectoral projects where the education component plays a key role (in multiple states and one municipality) are also part of our institutional support.

Among subnational projects, the Salvador Social Multisector Service Delivery Project, and its Phase II, which supports pandemic recovery, aims at improving the efficiency of social service delivery in the municipality of Salvador, one of the largest yet poorest urban areas of Brazil. The project supports innovation to consolidate and accelerate the acquisition of foundational skills and prevent school dropouts in primary and lower secondary education.

Most generally, this program also includes a rich set of analytical activities (including impact evaluations and assessments), a Brazil Human Capital Review, and technical support.

Health

Portfolio

The Paraná Public Sector Modernization and Innovation for Service Delivery Operation will support the expansion of hospital capacity to deliver COVID-19-related treatment, restructuring public health service delivery, and introducing new technologies to rationalize the Paraná state hospital network and strengthen coordination across different levels of care. It will also invest in environmental and disaster risk management information systems to improve service delivery and public sector management interventions.

The current portfolio also includes subnational operations focusing on (i) maternal and child health care, (ii) chronic diseases, (iii) strengthening of primary health care, and (iv) strengthening of health management systems.

For example, in its Phase I, the Salvador Social Multisector Service Delivery Project improved the delivery of public health services through the expansion of primary health care (PHC) coverage, reaching 55 percent of the population in 2022, from a baseline of 46 percent, and the consolidation of secondary and tertiary care under municipal governance. These investments helped the municipal government to improve results at other levels of health care, as demonstrated by the drop in the percentage of low-risk patients in Brazil’s intermediate-level Emergency Care Units (Unidades de Pronto Atendimento—UPAs).

Notable results have also been achieved in the use of technology to improve health care management, as evidenced by some of the project indicators. As of December 2022, the number of municipal health care facilities with an operational electronic medical record system had increased from a baseline of 0 to 174 units (surpassing the original target of 126); the number of municipal health care units providing health services under the municipal regulation system (Sistema Vida+) had increased from 22 to 129 (surpassing their target of 136); and the number of municipal primary care units with a management system in place had increased from 30 to 175.

Phase II of the project, in effect since October 2021, continued to support progress in these areas, in addition to facilitating the emergency response to the COVID-19 pandemic. For example, by September 2022, the number of hospital admissions for conditions which could be treated with primary health care interventions decreased from 27 percent to 22 percent; home visits by multidisciplinary health care teams increased from 1,046 to 3,829; and the percentage of municipal health facility patients with electronic medical records increased from 60 percent to 96 percent.

The Rio Grande do Norte Regional Development and Governance Project has enhanced the offer of health care services targeting women and children by increasing the number of maternity wards and functional beds for newborns. It also aims to increase the number of emergency health care units in the state, and has strengthened their capacity to treat cancer and to diagnose various diseases in two new laboratories. The project has allocated about US$5 million to respond to the COVID-19 pandemic through the acquisition of medical and personal protective equipment.

The World Bank is also supporting analytical work in a range of areas. This includes technical assistance related to the COVID-19 response (for example, for testing and risk management strategies, telehealth, and pandemic prevention, preparedness, and response), and well as support to analytical work and technical assistance to strengthen health care systems, including on topics related to funding, efficiency, equity, and quality of care.

Social Protection

The support provided by the Bank to the COVID-19 social protection response was anchored in a large federal operation (US$1 billion) in partnership with the Ministry of Citizens’ Rights to help mitigate the negative economic effects associated with COVID-19 on income, and the risks affecting the human capital of poor families. The project was approved in October 2020, and ended in December 2022. It financed the expansion of the Bolsa Família conditional cash transfer program to newly and previously uncovered affected groups.

On the analytical front, the Bank is focused on informing a medium-term reform of the social protection system to respond to the challenges arising from global megatrends and to new emerging priorities resulting from overlapping shocks. This will be done by delivering a robust set of advisory and analytical services focused on:

• A Social Protection System for the Brazil of the Future: This policy note explores the gains to be reaped from coordinated multisectoral policy reform to reduce poverty and increase shared prosperity in a fiscally sustainable manner, taking into account the new challenges posed by megatrends. It offers 10 policy reform proposals that could enable Brazil to take advantage of changes in the world of work, technology, and delivery systems, and to “build back better.”
• Human capital: The goal is to redesign Criança Feliz, the world largest early childhood development (ECD) program, and implement an impact evaluation of the Bolsa Família grant in terms of coverage, targeting, and fiscal cost.
• Economic inclusion of Bolsa Família beneficiaries: Strategies for labor market inclusion of Bolsa Família beneficiaries, review of its graduation rule, and exploration of the factors that explain why and how long beneficiaries stay in the program.
• Delivery systems: Policy note on the challenges related to Auxílio Brasil, and how a return to Bolsa Família might affect poverty and inequality rates.
• Social insurance rightsizing: Study on regulatory activities to achieve better fiscal sustainability for pension schemes at the subnational level, and suggestions for reform of the unemployment insurance system in Brazil. 
• Migration: Ongoing work to assess the barriers faced by Venezuelan migrant women when trying to enter the labor market, as well as options to change the SINE and CRAS protocols so as to better serve these groups.

The following studies are now available:

• Human Capital Review: This study looks at the evolution of the human capital index (HCI) in Brazilian states and municipalities in 2007–19, analyzes existing population gaps and its drivers, and assesses the impact of the COVID-19 pandemic on human capital.
• Brazil Poverty Assessment: This study aims at providing relevant evidence on the drivers of poverty and inequality in Brazil, with a strong focus on understanding the welfare of Brazilians during and after the COVID-19 pandemic.

Pillar 2. Productivity Growth and Private Sector Investment

Agriculture

The World Bank's agriculture and rural development programs support states in promoting and/or strengthening productive activities that help increase the quality of life and income of family farmers. They also provide expanded access to technical assistance and technological innovation aimed at the adoption of environmentally sustainable practices and improved productivity. Innovative projects empower local communities in poor regions in the Northeast, as well as in other parts of the country, to invest in improving the quality of their products and thereby increase access to institutional and private markets—mainly through collective channels, such as producer associations and cooperatives. These projects also foster the development of sustainable and environmentally-friendly agriculture.

In addition, they invest in complementary infrastructure to support agricultural activities, such as agrologistics, alternative energy sources, reduction of agroclimatic vulnerabilities, and water supply and sanitation. One such example, the Bahia Sustainable Rural Development Project—Bahia Produtiva, which ended in December 2022, supported strategic investments in several links of identified value chains, as well as in the formation of market alliances between producers and private companies to enable the necessary investments to meet market requirements in terms of both quality and quantity. This approach also benefits the recovery of different biomes through the adoption of agroforestry practices and systems and several other practices that increase production and strengthen climate resilience.

Other projects, such as the Paraíba Sustainable Rural Development Project, focus on providing water access to poor family farmers and producer organizations and investing in production. This project enables vulnerable farming communities to increase their food and water security in Brazil's driest region by reducing/eliminating the time spent by families fetching fresh water, diversifying food production, and improving overall income from farming activities and crop sales.

The Bank is also supporting the adoption of climate-smart, resilient, and inclusive policies for the agricultural sector. For example, the State of Goiás Sustainable Recovery Development Policy Financing (DPF), approved in May 2022, helps steer the state’s agricultural sector toward climate-smart practices, including the adoption of a state climate mitigation and adaptation plan. This DPF supports measures that reduce greenhouse gas emissions and increase carbon storage in the soil, and aims at a 10-percent annual increase in the use of nonchemical fertilizers and phytosanitary products. It strengthens the climate focus of the state environmental licensing framework by reducing compensation fees for GHG emission-neutral enterprises. Finally, the DPF will support land tenure regularization for smallholders through regulations that are environmentally sound, inclusive, and gender-balanced.

Furthermore, the Bank is contributing to integrating agricultural (including livestock) and environmental policies through a partnership with the Ministry of Agriculture, Livestock, and Food Supply and the Ministry of the Environment aimed at the implementation of Global Environmental Facility Grants such as the Vertentes GEF FOLUR. In this project, sustainable agricultural practices are disseminated in large tracts of Cerrado landscapes through the use of field technical assistance provided by the National Rural Learning Service (SENAR).

Inclusive, Resilient, and Sustainable Cities

The World Bank recognizes the importance of Brazilian cities. They concentrate more than 85 percent of the country's population, and are drivers of economic growth and development. However, these cities also suffer from a high concentration of poverty, as well as dramatic sociospatial inequalities, all exacerbated by the rising frequency and intensity of extreme climate events, which affect the poor and vulnerable in a disproportionate manner.

The World Bank's support for promoting inclusive, resilient, and sustainable cities comes in different ways, including traditional one-on-one engagement with municipalities. These efforts aim to address their specific multidimensional challenges related to policy planning, design, and implementation, and the provision and maintenance of infrastructure and services at the local level.

The Fortaleza Sustainable Urban Development Project, for example, benefits more than 300,000 people through a set of urban and environmental improvements, which are expected to drive the transformation of the entire western (underprivileged) portion of the city. This project comprises the implementation of a 10-km-long linear urban park; the reduction of point-source pollution along the coastline; and an increase in the municipality’s own-source revenue capacity.

In addition, the World Bank has been investing in innovative ways of providing municipalities with finance to support integrated urban resilience projects. A recently approved operation granted access to a World Bank loan through which Brazil’s Southern Regional Development Bank (Banco Regional de Desenvolvimento do Extremo Sul—BRDE) will be able to act as a financial intermediary and lend to small and medium-sized municipalities in southern Brazil interested in promoting the resilience agenda. This project comprises a specific credit line to finance disaster risk management and mitigation projects for events such as floods, landslides, and coastal erosion.

Transport

The Brazilian transport portfolio has provided support to mobilize greater investment in infrastructure to improve services, including through PPPs and various activities such as: (i) supporting the upgrade of 7,300 km of roads, including under PPPs with WBG investment, and the construction or rehabilitation of 11,700 km of rural roads; and (ii) providing more efficient and greener urban transport solutions to urban citizens in São Paulo and Rio de Janeiro, especially the most vulnerable population (earning under four minimum wages per month).

Besides, projects for three new bus rapid transit systems in São Paulo, Itajaí, and Belo Horizonte are currently being developed. Other transport projects have also supported the implementation of public investments in three major passenger rail PPPs: Metro Lines 4 and 5, both in São Paulo; and SUPERVIA, Rio de Janeiro’s suburban rail system. In addition, the Bank is also supporting the extension of São Paulo’s Metro Line 2.

These projects were pioneers in the field and allowed for strong private participation in sectors previously only invested in by the public sector. With these investments, high-quality transport services are being provided with private financing, improving people’s accessibility to jobs, health services, and leisure options; reducing travel times; and generating deep and direct benefits to more than 3 million people a day—most of whom are poor and were previously subject to “super commutes”.

Pillar 3. Inclusive and Sustainable Development

Environment

Few countries have ecosystems as rich, diverse, and critical to the well-being of their population as Brazil. Brazil holds one third of the world’s tropical rainforests, 20 percent of the world’s freshwater supply, and the Cerrado biome—a tropical savanna with the world’s highest rate of biodiversity. A significant part of the Brazilian economy relies on the use of natural resources. Brazilian forests are also huge carbon sinks and an important asset for maintaining the global climate balance.

In recent years, Brazil has enhanced its environmental legislation and implemented several initiatives to combat climate change, with significant emission reductions. The Brazil Amazon Sustainable Landscape Project (ASL) aims at:

(a)  Improving integrated governance and management at landscape level;

(b) Expanding the uptake of sustainable practices and participation in production chains linked to timber/nontimber and fisheries, as well as identifying and fostering opportunities for new sustainable uses of native biodiversity;

(c)  Expanding ongoing efforts and exploring new approaches to strengthen the implementation of key legal instruments for forest recovery; and

(d) Improving Brazilian stakeholders’ implementation and collaboration capacity.

The Amazon Region Protected Areas Program (ARPA), which is a component of the ASL, started in 2002 and currently supports the consolidation of 119 protected areas. Ongoing technical studies aim at the creation of 19 new federal and state-level units, with an estimated total area of 4.96 million hectares. In addition, activities under implementation include:

• Training new Voluntary Environmental Agents in the state of Amazonas;
• Signing nine additional fishing agreements in the state of Amazonas, and supplying equipment for community-based tourism, seedling nurseries, signage, and so on;
• Assessing proposals for four protected area management plans;
• Creating a fish-landing monitoring system at two ports;
• Developing restoration proposals for three areas;
• Analyzing and validating 16,445 Rural Environmental Cadaster (CAR) records.

In the Amazon region, the Bank is supporting the implementation of environmental legislation and incentives to combine forest protection and sustainable development. For example, the Amazonas Fiscal and Environmental Sustainability Programmatic DPF (approved by the Board in December 2020 and ended in December 2022) sought to address regulatory loopholes and institutional gaps, as well as support the provision of incentives for climate-friendly investors and poor communities to sustainably use state forest resources.

With the operation’s support, the state of Amazonas strengthened its state environmental, regulatory, and institutional framework by (i) adopting a state deforestation action plan, which provides clarity on institutional “command and control” roles; (ii) adopting state legislation for the sustainable management of forest concessions, based on sound international environmental and social standards; (iii) adopting state regulations that streamline the environmental regularization process and clarify the requirements to address conservation deficits; and (iv) strengthening the state’s fiscal and financing framework for a pioneer payment for environmental services (PES) program to benefit poor communities, thus paving the way for the creation of local carbon credit markets.

In Brazil, the World Bank is supporting the government in better managing and conserving the Cerrado, the second largest biome in South America, which is being deforested twice as fast as the Amazon as a result of increased land clearing for agriculture and cattle ranching.

The Cerrado is a driver of economic growth and is essential for food security, biodiversity conservation, water regulation, and carbon sequestration. Investments under way are tackling deforestation drivers by making agricultural production more sustainable, providing monitoring and information, and building capacity to detect, prevent, and fight forest fires.

So far, the Cerrado biome projects have achieved positive results in terms of management and use of anthropogenic areas; better governance and integrated land management system; and production and management of information. Below is a list of some of the highlights:

• 20,025 farmers were trained in low carbon farming, with a 93,844-hectare increase in the area under low carbon agricultural practices.
• 190,072 landholdings, and 32 traditional community territories (totaling about 35.5 million hectares) were formally included in the National Rural Environmental Cadaster System (SICAR)
• 36 Indigenous communities, 12 quilombola communities, and 12 traditional communities received assistance to maintain and improve their livelihood and sustainable development; and 20 representatives of Indigenous peoples and traditional communities from the Cerrado biome were supported in conservation and other REDD+-related processes at regional, national, and global level.
• 11 states (Tocantins, Bahia, Piauí, São Paulo, Paraná, Mato Grosso, Mato Grosso do Sul, Distrito Federal, Goiás, Minas Gerais, and Maranhão), the Brazilian Forest Service, and the Ministry of Agriculture, Livestock, and Food Supply were supported with improved environmental and land planning management systems.
• Cerrado deforestation rates were made public. The data is available at: http://cerrado.obt.inpe.br/ or http://terrabrasilis.dpi.inpe.br/app/dashboard/deforestation/biomes/cerrado/increments.

In addition, the recently approved Brazil Climate Finance Project will support the expansion of sustainability-linked finance and strengthen capacity to access carbon credit markets. In collaboration with Banco do Brasil, one of the largest financial institutions in Latin America, the project will adopt, for the first time ever, a sustainability-linked lending approach to help Brazil meet its climate goals.

The project aims to deliver robust mitigation benefits. Up to 90 million tCO₂e in emission reductions are expected by 2030, the equivalent of about 4.5 percent of what Brazil needs to achieve in order to stay on track with its net-zero commitments. The project is also expected to mobilize up to US$1.4 billion in private capital through the scale-up of financing by Banco do Brasil and private investors. As a leader in the Brazilian agribusiness sector, with around 60 percent of all rural credit in financial markets, Banco do Brasil is committed to supporting customers, partners, and society in the transition to a low-carbon economy, with methodologies, lines of credit, and sustainable solutions.

Water

Water scarcity and floods are growing problems in Brazil, and are further exacerbated by climate change.

Key challenges in water resource management include the need of increasing its strategic priority in the national political agenda, while improving communication with society and decision makers about its results and benefits. 

Despite the progress achieved over the past few decades, Brazil still faces persistent deficits in access to water supply and sanitation (WSS) services, with important negative environmental, social, and economic impacts. 

The World Bank’s strategic partnership with Brazil in the water sector goes back several decades. It includes a broad scope and multi-instrumental programs: investment financing, technical assistance, analytical and advisory services, and sectoral dialogue implemented in close partnership with key sectoral institutions at the federal, state, and municipal levels.

Ongoing investment projects in the states of Ceará, Paraíba, and Espírito Santo, in the municipality of Fortaleza, and with the SABESP utility in São Paulo aim to address many of the challenges above, including improving sustainable water resource management, promoting water and soil conservation, preventing and responding to extreme hydrological events, increasing access to sustainable water and sanitation services (in particular for vulnerable people), and improving quality of life. Attention is also given to rural areas, where WSS gaps are higher, through operations targeting rural populations in Ceará, Paraíba, and Rio Grande do Norte, as well as activities that benefit Indigenous communities in Acre.

In addition to lending operations, the World Bank: (i) promotes a rich water-sector policy dialogue with the government at all levels; (ii) uses trust funds and analytical and advisory services to build evidence, complementarity, and innovation in the water sector, including initiatives to build capacity against drought events and ensure the safety of dams, and to improve water utilities’ performance and efficiency (Utility of the Future); and (iii) promotes capacity building, exemplified by the recent technical assistance provided to the National Water & Sanitation Agency (ANA) with a view to incorporating its new mandate and regulatory role under the new law.

A recent diagnostic assessment is a flagship report titled Policies, Institutions Regulations, and Expenditures in the Water and Sanitation Sector in Brazil, which aims to produce evidence to inform the government’s proposed policy reform agenda and reorient investments in the sector, following the approval of the new law. 

Some results for the period 2018–21 include:

• 610,000 people with improved access to sanitation (urban)
• 585,000 people benefiting from more reliable water services (urban)
• 243,000 people with improved access to water (rural)
• 52,000 people with improved access to sanitation (rural)

Transport

Brazil is a highly urbanized country, with 85 percent of its population living in urban areas. One of its top priorities is to provide more inclusive and sustainable urban services, as well as to promote socioeconomic development to small rural producers and vulnerable groups. Brazil still suffers from poor logistics performance, with stagnant road infrastructure since the 1990s.

In addition to that, the transport sector is a large contributor to GHG emissions, with road transport accounting for 86 percent of all transport emissions. Furthermore, Brazil’s road death toll is among the highest in Latin America and the Caribbean (23 deaths/100,000 people per year), and road accidents cost around 4 percent of the country’s GDP.

Besides the rail projects cited under Pillar 2, the World Bank is promoting the development of inclusive, green, and high-tech BRT corridors in the cities of São Paulo and Belo Horizonte, and in the Itajaí River region. These projects aim to enhance urban mobility with a focus on reducing GHG emissions, improving road safety, and increasing job accessibility for the poor. Public transport, besides being the main mode of transport for the poor and for women in general, could help to significantly reduce air pollution.

At the federal level, the WB is supporting the technological transition to electric mobility by enhancing Brazilian cities’ structuring capacity through bus service PPPs, with business models that aim to improve competition and formalization in this sector.

Through a road transport project in the state of Bahia, which ended in June 2022 , the WB contributed to improving the efficiency and safety of the state’s transport and logistics operations, while enhancing the Borrower’s capacity in environmental and disaster risk management. In Tocantins, a WB project (closed in December 2021) helped to improve road safety. In addition, the project supported the Borrower's efforts to: (i) increase efficiency in selected public services; (ii) integrate development and social agendas; and (iii) address gender-based violence in project areas.

In the state of São Paulo, three WB projects (already completed) contributed to enhancing road resilience and improving rural accessibility. This was achieved by upgrading and rehabilitating roads used to transport commodities and agricultural exports from rural areas; strengthening road safety; providing connectivity to Indigenous communities and rural areas (in all seasons); and promoting a proactive gender agenda, whereby those projects were able to amplify their results by promoting gender empowerment and equipping communities to fight sexual exploitation and child prostitution.

Analytical work

The following studies under this pillar are expected to be published by June 2023:

• Amazon Economic Memorandum: This study will look into how to reconcile inclusive economic development in the Brazilian Legal Amazon with the conservation of its natural forests.
• Brazil 2040: This report aims at fostering public discussions on policy options to achieve long-term inclusive and sustainable growth. Brazil faces many challenges on its path to the year 2040, and the report will inform a debate in Brazil about how to overcome them, considering different "alternative futures." It will serve as a basis for discussions on how to reduce poverty and inequality by 2040, while strengthening sustainability.
• Brazil Country Climate and Development Report (CCDR): This pioneering report is a new core diagnostic tool that aims to explore the interplay between climate change and development, and to support countries in identifying high-impact climate actions, while recognizing related trade-offs. The study explores how Brazil's development objectives are exposed to risks and opportunities arising from climate change, climate related natural disasters, and other environmental stressors, as well as global and domestic decarbonization trends. It assesses the economic implications of climate change on metrics such as growth, income distribution, and private sector competitiveness.
• Brazil Infrastructure Assessment: Enhancing the quality of Brazil’s infrastructure requires a more robust investment framework. Improved spending on infrastructure will raise productivity directly and make other investments more productive. Unfortunately, Brazil’s infrastructure stock has been depleting since 1990, when, for the first time ever, infrastructure spending fell below the level required to maintain it (about 3 percent). The causes are not hard to understand: budgetary constraints that favor earmarked spending over investment, limited government capacity for project planning, and poor procurement and contract/asset management practices. This report presents an analytical framework that seeks to understand the relationship between infrastructure and productivity, inclusion, and climate change in the Brazilian context. Key findings and core messages may be summarized as follows: (i) Brazil urgently needs to increase public investment in infrastructure to stop its deterioration, expand access, improve quality, and thereby increase the productivity and competitiveness of the economy; (ii) in order to maximize the impact of its infrastructure investments, Brazil needs to establish a set of strategic investment and policy priorities that will yield cost savings and enhance productivity and global competitiveness; and (iii) Brazil needs to increase technical capacity, particularly at subnational levels, to plan, deliver, and better manage infrastructure assets, while increasing private participation.

Open Brazil website

In 2021, the World Bank Group and the Government of Brazil launched a “one-stop-shop” innovative, open, and interactive online platform: Brasil Aberto/Open Brazil. It offers real-time data on the performance of the WBG Program in the country. Open Brazil geolocates WBG spending and helps to visualize the WBG portfolio footprint against social, economic, and environmental indicators at the local level. It also automatically tracks CPF indicators by drawing on the government’s open data platforms. It leverages social media to track public sentiment on selected reform areas and features a “Smart Supervision App,” which showcases results on the ground and includes a dedicated interactive dashboard on COVID-19 in Brazil.

Through this platform, the World Bank Group seeks to foster transparency and improve its relationship with its stakeholders, bringing benefits to various sectors of Brazilian society.

Since its launch, the Open Brazil platform has attracted over 4,400 users, an average of 300 per month.

For more details, please visit Open Brazil.

Last Updated: Apr 14, 2023