Growing economy, declining underemployment rates and rising tax inflation — will Brazil be able to stay focused on the goal of economic stability? As the leading member of BRICS with an economy growing at an annual average of four percent (for the last five years) Brazil stands to struggle with inflation while attempting to maintain their rapid economic growth. In the years from 2003-2010 more than twenty million of Brazils citizens were lifted out of poverty with help from public welfare programs like ‘Bolsa Familia’ a conditional cash transfer program that issues ATM cards with monthly stipends, a program that is currently the largest targeted welfare system in the world (O’neil, 657). The downfalls of such programs is seen in the increasing tax issue that affects the citizens spending, and creates the stigma that Brazil’s economy is becoming increasingly “lethargic and expensive” (Sharma).
With the raise of the minimum wage, the inflation of public taxes and spending is one of Brazil’s rapid economic growth downfalls. The failure to expand the country’s public transit system by building roads and ports is quickly closing in on the once skyrocketing trade status of Brazil, then in turn deepening the failure to invest (Sharma). The inability for Brazil to take economic risks and its increasing spending on public welfare is having a reverse effect on the citizens that should in turn be benefitting from this growth. While focused on public welfare, Brazil continues to ignore their underspending problem with attention to their education system. While most countries see an increase in education retention rates in correlation with economic growth, Brazil however still maintains a seven year retention average, which is the lowest rate of any middle income country (Sharma). The result of poor education is showing through the working class where under qualified employees stand to be hired due to lack of engineers and technical workers.
For those that were once impoverished, the 25% increase of the minimum wage alongside the public welfare opportunities now offered the rapid growth has resulted in an ability to provide for their families. With a steady reduction of inequality and a increasing middle class Brazilian citizens thought they would see the improvement everyone was waiting for. We still see the ever increasing involvement of corruption and political unrest that is common in Latin America in Brazil, even in Rousseff’s presidency that stood to end political corruption. Overall Brazil may be leading the BRICS group, but they still face the downfalls of corruption, inflation and debt.
O’Neil, Patrick H. Cases in Comparative Politics. 5th ed. S.l.: W W Norton, 2015.