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Brazil - Inequality and Poverty

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Brazil - Inequality and Poverty

Income inequality in Brazil has a personal and a regional dimension. The highly concentrated distribution of income worsened in the 1960 to 1990 period. The Gini coefficient (see Glossary) for the country as a whole increased from 0.50 in 1960 to 0.56 in 1970, 0.59 in 1980, and 0.63 in 1990. The 1990 coefficient means that the richest 5 percent of the population received 36.6 percent of the national income, while the poorest 40 percent received only 7.2 percent. Moreover, the pattern of income distribution was similar in all of Brazil's five regions. In 1988 the South had the lowest Gini coefficient (0.58) and the Northeast had the highest (0.64). The difference is not remarkable; inequality is pervasive.

A substantial number of Brazilians are poor because Brazil has a large population, a medium-range income per capita (as compared with the United States, which is in the high range), and a high level of inequality. Estimates indicate that in 1990 almost a third of Brazil's total population, or 39.1 million persons, were poor. Approximately half of these poor lived in rural areas and half in urban areas. In relative terms, however, the proportion of the urban poor (22.5 percent) was substantially lower than that of the rural poor (50.1 percent). The rural to urban migration since 1950 markedly reduced the rural population, but it did not improve the lot of those who remained behind.

As for regional inequality, in 1991 the more developed Southeast and South regions, which occupy 17.6 percent of Brazil's total territory, had 58.7 percent of the total population and generated 74.3 percent of the country's GDP (in 1985). By contrast, the poverty-stricken Northeast, which occupies 18.3 percent of the total area, had 28.5 percent of the total population and generated only 13.1 percent of Brazil's 1985 GDP. The huge North (Norte) and Center-West (Centro-Oeste) regions, which occupy 64.1 percent of Brazil's total area, had 12.8 percent of the total population and generated 12.6 percent of Brazil's 1985 GDP. The Southeast had the largest urbanization rate (88.3 percent in 1991); the Northeast had the second largest proportion of the population in rural areas (41.6 percent in 1991), slightly below that of the frontier North (43.9 percent).

As a result of the economic boom, Brazil's per capita income experienced a marked increase in the 1970s, from US$1,253 to US$2,266; in the stagnant 1980s, it declined, reaching US$2,154 in 1990. In 1970 the per capita income of the Southeast exceeded the national average by 53.2 percent, while that of the Northeast was 44.4 percent lower. This discrepancy has declined, but only marginally: in 1988 the per capita income of the Southeast was 43.6 percent higher than the national average, and that of the Northeast was 37.5 percent lower. Of Brazil's 39.1 million poor in 1990, 53.1 percent were in the Northeast and 25.4 percent were in the prosperous Southeast. In the Northeast, the majority of the poor lived in rural areas, while in the Southeast the largest portion of the poor lived in cities.

Brazil's major urban areas warrant examination, given the large and growing number of urban poor. In 1991 nine Metropolitan Regions (MRs), including Belém, in the North; Fortaleza, Recife, and Salvador in the Northeast; Belo Horizonte, Rio de Janeiro, and São Paulo in the Southeast; and Curitiba and Porto Alegre in the South, had a combined population of 42.7 million people, almost one-third of Brazil's total population. The smallest MR, Belém in the Amazon, had 1.3 million inhabitants, and the largest, São Paulo, had more than 15 million inhabitants. The three largest MRs were in the Southeast. They had a combined population of 28.6 million, nearly 67 percent of the total metropolitan population and almost 20 percent of Brazil's total population. The four MRs in the North/Northeast had a combined population of 9.0 million--a large number for an underdeveloped or frontier area. The South's two MRs had a combined population of 5.0 million.

The metropolitan Gini coefficients for 1970 and 1988 show that all the MRs except for Curitiba experienced a deterioration in income distribution. The coefficients for 1988 also show that the distribution of income was worse in the Northeast MRs and better in São Paulo and in the two Southern MRs, but the differences were not large.

The metropolitan average household real income shows that all MRs, except for Rio de Janeiro, had increases between 1970 and 1988. In 1970 and in 1988, the average household incomes of the North-Northeast MRs were significantly lower than those of the Southeast-South. However, the gap between the two groups has declined somewhat. In 1970 the average household income of Fortaleza (the MR with the lowest average) was only 36.6 percent of that of São Paulo (with the highest average); in 1988 this average had increased to 53.3 percent. This does not mean that the Northeast MRs were prospering. Rather, it means that São Paulo, flooded with migrants, had a sharp increase in the number of households, moderating the rise in its average household income.

Estimates indicate that in 1990 the nine MRs had a combined total number of poor of almost 12.3 million people, or 28.9 percent of the total population of the MRs. São Paulo and Rio de Janeiro had the largest absolute number of poor (over 3 million, or nearly 24 percent of the total MR poor each), but the highest levels of urban poverty were in the MRs of the North/Northeast.

In 1989 the proportion of the poor unemployed was 11 percent, while that of the rest of the work force was only 3 percent. The proportion of the poor employed in informal occupations was 38 percent, while that of the remaining population was 26 percent (still quite a high percentage). And, the proportion of poor children, age seven to fourteen, out of school was 14 percent, while that of the nonpoor was only 6 percent.

Data as of April 1997



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