Brazil inequality, unemployment buck improving trend

Anadolu Agency

SÃO PAULO — Brazil saw increases in unemployment and inequality in 2013, according to new official figures released Thursday by the country’s office of national statistics, the IBGE.

Brazil’s Gini Index, a measure of inequality by income distribution, rose from 0.496 in 2012 to 0.498 in 2013, where ‘zero’ represents perfect equality. The increase breaks a years-long downward trend in inequality experienced since 2001, when it was 0.563.

[Important update 19 Sept: The IBGE later announced it had made “serious errors” in some of its calculations, the most noteworthy of which being the Gini Index, which in fact fell to 0.495 in 2013. The IBGE said this still constituted a “stagnation”. The government has called for an inquiry into the errors.]

At 0.523, the most unequal region was the northeast, with the country’s worst result, 0.566, found in Piauí state.

The IBGE described the slight deterioration in the Gini Index as a “levelling-off” of the inequality indicator.

“We had seen significant drops year on year, but we’re not seeing movement in these indices now,” the IBGE’s Work and Income Coordination director Maria Lúcia Vieira was quoted by local media as saying. “We are back to the same situation as in 2011.”

Income increased 5.7 percent in real terms between 2012 and 2013, giving the average worker a monthly salary of 1,681 Brazilian reais (around $712).

Monthly income for the poorest 10 percent of Brazilians increased by 3.5 percent during that period, while the richest saw their income boosted by 6.4 percent.

“We now need to think about new policies to allow the country to advance on inequality,” IBGE President Wasmália Bivar said. “Despite the major improvements seen in the last few years, Brazil remains really quite an unequal country.”

Although major strides have been made against inequality over the last decade under the Workers’ Party-led government of incumbent President Dilma Rousseff and her predecessor, Luiz Inácio Lula da Silva, the news will come as a blow to Rousseff, who is vying for a second term in office.

The annual IGBE study surveyed 362,555 people in 1,100 municipalities on a range of topics, including income, literacy and gender equality.

Unemployment up; illiteracy down

The IBGE’s figures on joblessness in 2013 provided more bad news: the rate increased to 6.5 percent from 6.1 percent in 2012. It was the first increase in unemployment since 2009, when the economy was weathering the global economic downturn.

Industry was worst-hit as the number of employees shrank 3.5 percent.

Economists had expected unemployment to rise at some point, given the current lackluster performance shown by the economy, which is currently set to grow by just 0.33 percent in 2014 according to the latest market forecasts. However, the IBGE highlighted that the 2013 figure was still the second best unemployment figures since the series began in 2001.

The yearly cross-section of the 203-million-strong population also showed a number of improvements, including in schooling and literacy.

The rate of illiteracy in Brazil fell to 8.3 percent, restarting its downward trajectory halted by a slightly rise in 2012. Some 7 million of the country’s 13 million illiterate over-15s are from the poor northeast region.

[UPDATE 19 Sept: The IBGE now says the illiteracy rate stood at 8.5%, and not 8.3% as previously announced.]

The study also showed that a record number of Brazilians are now connected to the Internet via a home computer, 43.1 percent of the population, and that 50.1 percent of the population now regularly use the Internet — breaking the 50 percent barrier for the first time.

‘Electoral price’ for Rousseff

The mixed news comes a little more than two weeks before the first-round vote in the presidential elections on 5 October, and could prove a problem for Rousseff.

Media outlets in Brazil have focused on unemployment and inequality figures, but Rousseff’s presidential rivals are still digesting the new data before reacting to the figures that are embarrassing to the government.

Commentators say the new figures are damaging for the president’s re-election campaign and her rivals will take advantage of the situation:

“These new results will prove to be an issue for the Rousseff campaign. She is finding out the policies oriented just at reducing poverty are simply not enough any more,” Carlos Pereira, a leading political scientist at the Fundação Getúlio Vargas in Rio de Janeiro, told the Anadolu Agency (AA).

Great strides have been made in curbing severe poverty, evidenced recently by a new United Nations report that removed Brazil from its World Hunger Map for the first time. The government’s Bolsa Família social program, which gives families modest cash handouts in exchange for making sure their children attend school and are vaccinated, has been singled out for praise, and Brazil has exported its poverty-busting policies to other countries.

Pereira says, however, that although salaries, including the minimum wage, have so far continued to rise, a limit will eventually be reached given the current state of the Brazilian economy, and rival parties will likely seize on the worst results of the IBGE’s study.

“It appears that the government’s policies have hit a ceiling. Economic growth is now needed to cross it. This is the biggest problem now facing Rousseff’s campaign, and she will pay the electoral price for it,” Pereira told the AA.

The news also puts more pressure on Rousseff to provide a concrete manifesto of election proposals, which has been so far resisted due to disagreements between the government and the Workers’ Party.

Other presidential hopefuls, including Socialist Party candidate Marina Silva, have already set out their proposals on a range of topics, from the economy to their stance on the legalisation of abortion.

Recent polls put Rousseff ahead in the first round of voting, but tied with Silva in a highly-likely second-round runoff, set to be head of on 26 October if no candidate breaks through a 50-percent threshold in the first round.

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