Jennifer Oh
History 388
Professor David Ludden
December 10, 2004
Poverty in Brazil
The term “third world”
does not come into existence until the 1950s.
It refers to a group of nations which were formerly colonized but now
independent from foreign powers. With
the dissipation of the Communist, “second world”, the term “third world” has
been replaced with North-South geopolitical distinctions, but whatever the
label, the category of “third world” remains sensible today because of the
unique shared experiences of these former colonies and the common legacy which
many of them have been forced to deal with in the task of nation-building
following decolonization. The legacy of
colonialism has proven hard to escape in many of these nations. They face social, political, and economic
obstacles to development which did not exist for industrialized nations. Most importantly for the purposes of my
argument, I will focus on the economic legacy of colonialism in the country of Brazil,
and how that has affected the process of economic development in post-colonial Brazil. Then I will briefly analyze the face of
poverty in Brazil
and finally, consider one policy program which has met with some success in
some of Brazil’s
more rural areas.
The economic
legacy of colonialism in Brazil
is like many others in the third world. The
economies of colonized countries were developed to support the colonial power’s
needs. Their first encounter with
modernism and technology was by way of extraction of their resources. Since the economies of the colonies are
dependent on the needs of their colonizers, many made a sudden shift from
subsistence to export crops. But surplus
of export crops, like coffee, cannot be transferred for food needed to
survive. This produced famine situations
in many countries, as in Brazil. Even after its independence, Brazil
was stuck with the colonial trade paradigm, depending on cash crops for the
main source of revenue. Its economy was
severely misdeveloped as well as underdeveloped. The colonial economy in Brazil
remains deeply embedded throughout the twentieth century. After a period of provisional government
following independence between 1930 and 1937, a New
State (Estado
Novo) was established under the leadership of Vargas and remained in place
until 1945. His aim was to create a
strong centralized state with a strong national army. On the economic side, his objective was to
centralize and industrialize. His plan
to break with the old required adopting import-substitution industrialization,
measures designed to protect the domestic middle-class so that Brazil
could eventually enter the global market.
It is best described as a form of state-guided capitalism. In the next couple decades to follow, after
the end of World War II, it became more difficult to justify and prop up a
dictatorship in the new world order. In
this international climate, Vargas agrees to step aside and calls for parties
in the next elections. But this change
is superficial and the populist authoritarian model of government
continues. On the surface, while formal
democratic institutions are given more attention, the economy begins to show
signs of strain. Facing much criticism,
in 1954, Vargas commits suicide. None of
his successors can keep it together. Kubitschek, one of his successors, projects a positive
image that progress is being made and the economy is growing. However, the public does not buy this and
there is a genuine concern about economic breakdown and workers are frustrated. In 1964, a military coup against the civilian
government restores authoritarian rule to Brazil. The government recommits to economic
development and modernization. They
undertake a large-scale development project which costs a lot of money. In the late 1970s, Brazil
starts to borrow heavily to fund these projects, including loans from
commercial banks. Unable to pay back the
interest, the economy slows down. The
military government decides to bring democracy back to displace the blame and
allows elections.
Brazil’s
transition to democracy is not a smooth one.
Solving the economic crisis in Brazil
proves to be a huge challenge. Exports
are pushed but default on loan payments creates an insurmountable national debt
crisis. Wealth continues to be
concentrated in the hands of wealthy landowners, a practice continued from the
period of colonialism, when client-patron relationships governed local
community politics. As a result of this
deeply entrenched colonial practice, Brazil
has one of the largest inequality rates in the world, with a ratio of 30. In 1992, Franco chooses Cardoso
as the Minister of Economics and he commits Brazil
fully to structural adjustment policies (SAP), moving away from the ISI model
of economic development. Brazil
opens its doors for trade, embarks on a model of fiscal austerity by cutting
spending heavily, and tries to privatize some of its factories and oil
companies in order to attract foreign investment. The consequence of these tough economic
reforms is that it creates many ‘losers’, particularly within the working
class. The initial advantages of wealthy
land-owning elites is entrenched in Brazil’s
economy, and inequality proves to be Brazil’s
most serious challenge. The inability of
Cardoso to create a mechanism by which to distribute
economic growth evenly is something that the new administration must face.
An extensive
report on the status of poverty in Brazil
was released by the World Bank in March of 2001. The central message of the report is that Brazil
has achieved much progress in its social indicators, especially health and
education and achieved significant progress in the reduction of income poverty
in the past couple decades. Overall,
policy reforms seem to be on the right track and life for those living in
poverty in Brazil
has improved considerably. However,
those results need to be taken with a grain of salt. Poverty still remains unacceptably high for a
country with Brazil’s
average income levels. This is telling
of the high degree of inequality in income distribution among Brazil’s
inhabitants. The poorest people are
concentrated in the Northeast region and in the smaller urban and rural
areas. Another message of the report is
a hopeful one: with targeted policy-making and action to back up those
policies, Brazil
could potentially achieve many further improvements in social indicators,
including its objective of reducing the rate of income poverty by 50% by the
year 2015. This, however, will require a
strong commitment on the part of the government to carry out the necessary reforms.
The report in 2001
estimated that Brazil
had a poverty rate of 22.6%, as measured by the extreme poverty line set by the
World Bank. This amounts to 34.9 million
Brazilians living in households where the per capita income is below the
poverty line. A little over half (52.5%)
of the poor live in urban areas. 57% of
the urban poor live in the Northeast. Overall, the poor are concentrated in the
Northeast and in the rural, small, and medium sized urban areas. Both in absolute and relative terms, poverty
is highest in rural areas and within urban areas, poverty improves with urban
size. Although poverty is most visible in Brazil’s
large cities, like Sao Paulo, Rio
de Janeiro, and Belo Horizonte, this report reveals
that these areas only actually constitute 3.7% of Brazil’s
poor. Brazil’s
poverty struggle remains largely a rural problem. In addition to identifying where the poor
are, this study also attempts to answer the question ‘Who are the poor?’ Even after controlling for other household
characteristics, location is the strongest explanatory variable for explaining
poverty. What the study tries to show is
that households with the same characteristics are more likely to be poor in
poor rather than in rich areas. Poverty
in poor areas is not just related to a large number of households with
characteristics related to poverty, but also linked to the low average income
of the area. Other factors strongly associated with
poverty include education levels, household size, and absence of urban services.
Brazil
is a country of both abundance and lack.
The existence of mass hunger is a fact to which too little attention has
been paid. While Brazil
is the fourth largest food exporter in the world, Minister of Food Safety, Jose
Graziano da Silva states
“Nearly a third of the Brazilian population is in a situation of food
insecurity.” Reporters Xico Sa
and U. Dettmar undertook to document the geography of
hunger in the semi-arid region of Brazil. In this report, they move into the backland
municipalities of Iraucuba and Caridade. In these regions, they describe, “the local
folk spend most of their time waiting for rain that rarely comes.” The harsh climate proves to be susceptible to
drought and famine. However, the recent
arrival of provisions—rice, beans, sugar, flour and coffee by the Zero Hunger
program give them some hope. The Zero
Hunger program, launched in January of 2003, is coordinated by Frei Betto, the liberation theologist and President’s senior advisor during the later
years of military dictatorship. As with
most of President Lula’s policies, the program struggles to actually carry out
its promises. Frei
Betto speaks about results that the program will
deliver to Brazil,
but it remains unknown whether these promises will translate into tangible
benefits for the masses of people living at or below subsistence level. But so far, there have been positive
results. The program’s first target was Guaribas,
a town of 5,000 and among the country’s most impoverished. As exemplified by the index of child
mortality, since the program was instituted, the news there has been
encouraging. Many who had migrated to
the cities looking for food were choosing to return to this rural community. Of course, this accomplishment only seems to
make a dent in the huge task that lies ahead.
But, its success does bode well for many other towns in Brazil
which resemble it. The program is not
simply a welfare handout. It aims to
empower its residents under the guidance of state social workers. The objective of the program is to have the
impoverished people use credit card-style food cards in nearly 200 areas in the
impoverished North and drought-stricken Northeast states. Each family which is a part of the program receives
50 reais (US $18) in credit per month. In this documentation, the reporters
introduce us to fifty-seven-year-old Benedito Severino da Silva and his wife, Osmarina Ferreira da Silva, a
couple with fourteen children, who received their first emergency benefit from
the Zero Hunger program. Four of their
children died in their first year due to malnutrition. Help
has arrived, and Osmarina comments, “nowadays it’s easier to live”. It appears that the state has caught on to
the plight of rural poverty and hunger and is doing something about delivering
assistance.
From the onset,
this program has taken on a moral character, with all its terminology and
statement of objective steeped in philosophy and ethics. This campaign has been described as a
“community-based collective campaign”, with cooperation along many levels. Ford Brazil,
Brazil’s
largest supermarket chain, has pledged its supports with over 200 tons of
food. And Companhia
Vale do Rio Doce, Latin America’s
largest mining firm, is providing a matching donation of one ton for every
nonperishable good donated by its employers.
The policy tries to target the neediest people first. These include landless families, indigenous
communities, members of Afro-Brazilian quilombo
communities, and eventually, aims to reach urban areas. In this way, it has been faithful in
responding to the report by the World Bank that raised awareness of where aid
needs to be concentrated. Although its short-term objective is to get food to these areas, its
long-term objective is to promote jobs, create self-esteem, and educate the
masses of impoverished people. On the
level of leadership, Lula’s devotion to the program has proven unswerving. At his inaugural address, Lula said, “If by
the end of my mandate, all Brazilians are able to have a daily breakfast, lunch
and dinner, I will have accomplished by life’s mission.”
Some might say
that the success of the program remains to be seen. Some of the criticisms against the program
have been voiced by the residents of one town chosen to be in the pilot version
of the program. They noted that what
they really need is greater access to clean water and not food. They also complained that they were only allowed to
spend the monthly payment on foodstuffs, not on medicine, clothing, schoolbooks
or other items that they might need more.
However, Graziano continues to stand behind
the program, saying, “We are starting with those measures that require the
smallest investment. But this is a
long-term program with more than 60 elements.” It remains to be seen whether this program
will fulfill its intended goals, but it can be said in its favor that it
recognizes the problem of poverty concentrated in the Northeast and rural areas
and is taking steps towards combating it, not only by providing short-term aid,
but by striving to equip the people in these areas with the necessary skills
for self-sufficiency in the future.
