Between 2004 and 2014, tens of millions of Brazilians emerged from poverty and the country was often cited as an example for the world. High prices for the country’s raw materials and newly developed oil resources helped finance social welfare programs that put money into the pockets of the poorest.
But that trend has been reversed over the past two years due to the deepest recession in Brazil’s history and cuts to the subsidy programs, raising the specter that this nation has lost its way in addressing wide inequalities that go back to colonial times.
“Many people who had risen out of poverty, and even those who had risen into the middle class, have fallen back,” said Monica de Bolle, a senior fellow at the Washington-based Peterson Institute for International Economics.
The World Bank estimates about 28.6 million Brazilians moved out of poverty between 2004 and 2014. But the bank estimates that from the start of 2016 to the end of this year, 2.5 million to 3.6 million will have fallen back below the poverty line of 140 Brazilian reals per month, about $44 at current exchange rates.
Those figures likely are underestimates, de Bolle said, and they don’t capture the fact that many lower-middle class Brazilians who gained ground during the boom years have since slid back closer to poverty.
Economists say high unemployment and cuts to key social welfare programs could exacerbate the problems. In July, the last month for which data are available, unemployment was close to 13 percent, a huge increase from 4 percent at the end of 2004.
Lines of job-seekers stretching several blocks have become commonplace whenever any business announces openings. When a university in Rio this month offered low-skilled jobs paying $400 a month, thousands showed up, including many who stood outside in the rain a day before the process began.
But that trend has been reversed over the past two years due to the deepest recession in Brazil’s history and cuts to the subsidy programs, raising the specter that this nation has lost its way in addressing wide inequalities that go back to colonial times.
“Many people who had risen out of poverty, and even those who had risen into the middle class, have fallen back,” said Monica de Bolle, a senior fellow at the Washington-based Peterson Institute for International Economics.
The World Bank estimates about 28.6 million Brazilians moved out of poverty between 2004 and 2014. But the bank estimates that from the start of 2016 to the end of this year, 2.5 million to 3.6 million will have fallen back below the poverty line of 140 Brazilian reals per month, about $44 at current exchange rates.
Those figures likely are underestimates, de Bolle said, and they don’t capture the fact that many lower-middle class Brazilians who gained ground during the boom years have since slid back closer to poverty.
Economists say high unemployment and cuts to key social welfare programs could exacerbate the problems. In July, the last month for which data are available, unemployment was close to 13 percent, a huge increase from 4 percent at the end of 2004.
Lines of job-seekers stretching several blocks have become commonplace whenever any business announces openings. When a university in Rio this month offered low-skilled jobs paying $400 a month, thousands showed up, including many who stood outside in the rain a day before the process began.
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