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christian_aidThis is a report that should interest British readers in particular, for two reasons. First, it applies Richard Wilkinson and Kate Pickett’s pioneering study,The Spirit Level, to Brazil. Second, like Wilkinson and Pickett, it notes increases in inequality in developed societies, such as notoriously in Britain under New Labour. Those of us in affluent countries should therefore realise that we live in glass houses when we are tempted to throw stones at notoriously unequal countries such as Brazil. Nevertheless this study suggests that Brazil has its own mechanisms for reproducing inequality different from those in richer countries, which reinforce inequality even when the economy grows.

There is much to celebrate in Brazil today. In 2012 Brazil has the fourth government in succession for which reducing poverty is an explicit aim, from Fernando Henrique Cardoso’s timid start in 1999 to President Dilma Rousseff’s Eliminating Extreme Poverty in Brazil programme launched in June 2011. However, even though inequality declined from 2003 to 2009, the period of the first Lula government, this was not enough to deactivate Brazil’s historic mechanisms for defeating inequality. When an international comparison is made, the index of Brazilian inequality continues to be among the 10 highest in the world, making the country lose several positions on the Human Development Index (HDI) when adjusted for inequality, according to the UNDP methodology. Furthermore, the 10 per cent richest received an average income 40 times higher than the 10 per cent poorest. Despite the figures being lower than those in 1980, the inequality level is similar to that for 1960, although the country’s total income is eight times higher than it was 50 years ago and the per capita income is three times higher.

There is a joke in Brazil about how the rich are irritated at the way the airports, which previously they had to themselves, are now getting crowded with a different sort of person. As the report notes, this is a metaphor for social change in Brazil, and goes along with talk about the ‘new middle class’. One of the report’s aims is to counter what it calls the ‘triumphalism’ of the current Brazilian government about its social policy.

cebrapThe report examines the impact of various anti-poverty measures introduced by the two Lula governments, especially the Bolsa Família grants, the land settlement programme for small farmers, and the earlier rural pension, and finds that they have had little effect on inequality. This is because what really makes a difference to the income of poor people is their wages and, while the Lula government’s successive increases in the minimum wage have been important in reducing poverty, they have not narrowed the gap between the top earners and the lower earners. The land settlement policy, a pale shadow of agrarian reform, does not affect inequality because ‘the area occupied by them in recent years is tiny when compared to that of the large landowners benefiting from the new technologies, access to the outside market and recourse to cheap labour, often in a deprived situation that dates back to the days of colonial Brazil’.

The report is not just an academic analysis, but seeks to ‘create a critical mass on which to base a development strategy anchored in the desires of the social movements’, and has specific policy recommendations, including support for cooperatives and other small business initiatives accessible to the poor, maintaining economic growth and increasing social spending, continuing the policy of real increases in the minimum wage, plus enforcing collective labour agreements nationally, fiscal and tax reform to end the regressive character of Brazil’s tax system, and ‘incorporation of the fight against inequality into all public policies in order to reduce increasingly the disparities in opportunities and income by gender, race/colour, levels of education and generation’.

Extremely significant for British aid agency policy is the remark by Christian Aid’s director, Loretta Minghella, in her Foreword: “Inequality is the major challenge to development efforts. It should form the core of the post-2015 successor to the millennium development goals, and be a major focus of aid spending by donor countries and multilateral institutions such as the World Bank. And yes – if that means supporting countries that have their own aid programmes, or space programmes, then so be it.” Let’s hope that Justine Greening, Britain’s new Secretary of State for International Development , is listening.

While the complete report is fascinating, it is extremely detailed, and the punchy six-page summary by Christian Aid’s Andrew Hogg and Claire Kumar provides a helpful introduction.

Read the report:

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