...Arianne Cerize A. Aman The Meaning of Development: Brazil and Costa Rica Economic development is the presumed solution to absolute poverty and to many of the world's other most pressing problems. But what is development, and how do we know it when we see it? The term, development, has been used in several ways. Traditionally, it was equated with growth of per capita income. Since the 1970s, other indicators of development have become widely used by development scholars and development agencies such as the World Bank. The meeting of basic needs (or, equivalently, reduction in absolute poverty), the creation of modern employment opportunities, and the achievement of a less unequal distribution of income and farmland have all become important criteria in determining the level of development. Traditional measures of growth, especially in developing countries, may be misleading in that they fail to account for the environmental destruction that often accompanies spurts in temporary and unsustainable economic growth; and economists are devising measures of the national capital stock that includes environmental wealth. The United Nations has placed both educational attainment and health standards on equal footings with per capita income as development criteria, in the widely followed United Nations Development Program human development index (HDI). Some leading development scholars, such as Amartya Sen, Denis Goulet, and Dudley Seers, have gone further. They argue that more intangible...
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...Introduction: The Fast Economic Growth of Brazil Brazil is the world’s eighth largest economy by nominal GDP and ninth largest by purchasing power parity reached $10,513 in 2010, and is the largest among South American nations and is the second largest in the western Hemisphere after the United States. [1] Despite the fast growth of economy in Brazil last decade, Brazil is still considered a country with fairly high income inequality, the high poverty ratio in the Brazilian communities hindered the substantial growth of its economy. In this paper I am going to introduce the formation of anti-poverty program in Brazil, how the program was processed, and the results of the program. I. Poverty in Brazil Poverty in Brazil is most visually seen by the various “favelas”- slums. Favelas are mostly sprawl in the country's metropolitan areas and remote upcountry regions that suffer with economic underdevelopment and below-par standards of living. [6] From WWII to year 2000, the underlying Brazil's weak growth performance is its highly unequal income distribution and the prevalence of poverty. The poverty and income inequality contribute to sluggish growth, both by constraining many households' ability to invest in human capital and to obtain financing to start small firms, as well as by contributing to the fragility of the political equilibrium. The rate of poverty is in part attributed to the country's economic inequality. In 2000, Brazil ranks among the world's highest nations...
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...A STUDY ON PROGRESSIVE INCOME TAX A CASE STUDY OF US & BRAZIL ________________________________________ INSTRUCTOR: DALIA EL-EDEL ECON 310-02 TERM PAPER - BY: JIHAD MASHAMOUN 900-08-2910 LARA AZZAM 900-09-3033 LUJANE MULLA 900-10-1019 ABSTRACT There is no doubt that the widening income disparities were a major driving force fueling the recent uprisings within the Middle East. One solution that has been put forth for adoption is the progressive income tax. This paper intends to assess the theoretical bases and popular arguments surrounding this very dynamic topic. The first section provides a brief definition of progressive taxation in contrast with other forms of taxation. It also discusses the most dominant for and against arguments both from a theoretical and an empirical point of view. The second section provides a case study of progressive income taxes in a leading industrial and developed country; the US. The third section provides a comparative study from Brazil; an emerging economy that has recently adopted progressive taxation. Based on the theoretical analysis and the two case studies, the paper concludes by providing policy recommendations that should be implemented in order to complement progressive taxation and gain the best and most balanced results in terms of equality, efficiency and revenues. Finally taxation is only part of the economic equation; proper efficient tax system is only one step forward towards creating equal opportunities through proper...
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...Brazil under Lula: Off the Yellow BRIC Road In 2001 Goldman Sachs had created the term “BRIC” to denote the group of emerging economies with high growth potential, including Brazil, Russia, India and China. But Brazil was the underperformer of the group and had some of the worst business-environment indicators among BRIC countries. “The second Lula administration is committed to a strategy of faster economic growth and higher living standards based on investment promotion, redistributive policies and higher levels of education”. For that Lula solicited his ministers for tax-reform proposals and fiscal incentives that could boost capital investments, mostly in infrastructure, to achieve growth rates of 5% per year. During his first term Lula reduced poverty and income inequality. Lula´s cash-transfer programs reduced the number of poor people significantly and brought down the Gini coefficient of income inequality to its lowest level in recent history. Lula maintained a policy of price and exchange rate stability, increased government savings, paid off the balance owed to the IMF and managed to reduce interest rates steadily. In order to grow like China and India, Brazil would have to tackle “the Brazil cost”: * To reduce the size and importance of the informal sector * Correct some macroeconomics deficiencies (e.g the high real interest rate and a high government debt to GDP ratio) * Reduce red tape * Improve the quality of public services (e.g education...
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...Management of Organizations in Brazil Brazil belongs to BRIC, which is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development. According to Goldman Sachs, since the four BRIC countries are developing rapidly, by 2050 their combined economies could eclipse the combined economies of the current richest countries of the world. These four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world’s population. Brazil is one of the countries, which are among the biggest and fastest growing emerging markets. It is now the 6th largest economy in the world after United States, China, Japan, Germany and France. This fast development is also accompanied by socio-economic changes, and more particularly to an evolution of social classes. Does Brazil really become a sustainable middle-class country? In order to answer to this problematic question, we are going to explain why the Brazilian middle-class can be qualified with the adjective « new », why it differs from middle-class existing in others developed countries and why there are some risks class C setbacks. Then, we are going to demonstrate, according to the definition of « middle-class », that Brazil owns every characteristics which allow to qualify her as a sustainable middle-class country. One of the most impressive results of Brazil's...
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...Brazil is a country that has seen income inequality drop of the last decade, unemployment is at near record lows, and there has been substantial middle class growth. By most estimates, 40 million people have been pulled out of poverty in the last decade and extreme poverty had been reduced by 89 percent. Nocera, Joe; "Does Brazil Have the Answer," The New York Times, 20 Jan, 2014. Brazil is the largest of the Latin American countries and covers nearly half (47.3%) of the continent of South America. It occupies an area of 3,386, 470 square miles and is the fifth largest country in the world after Russia, Canada, China, and the United States. According to the Central Intelligence Agencies World Fact Book, Brazil's economy is characterized by a large and well-developed agriculture, mining, manufacturing , and service sector. Once a third world country, Brazil has experienced rapid growth and boasts a rapidly expanding middle class. Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments. In 2008, Brazil became a net external creditor and two ratings agencies awarded investment grade status to its debt. After strong growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in 2008. Brazil experienced two quarters of recession, as global demand for Brazil's commodity-based exports dwindled...
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...BRICS countries (comprised by Brazil, Russia, India, China and South Africa) have been at the forefront in this phenomenon. During these years, the real Gross Domestic Product (GDP) growth of the world (annual percent change - A% c) averages 3,83. It is worth mentioning that the above referenced countries reached 6,01 (157,02% more); and Advanced Economies - not yet recovered since the last financial crisis - reached 1,6 (47,78%). Meanwhile, different measuring models have found that in the world, just the top 20% of the population controls over 70% of the global revenue. These economies have been growing as well. The importance of this investigation is answering the questions: Are they reversing this lack of equality trend? And, Would be relevant to add equity in the development agenda?. This paper offers an analysis of these points and studies them as a strategy for sustainability and continuous growth. Key words: BRICS countries growth; National income distribution; Equity in the development agenda. 1. Introduction BRICS Countries are leading the growth of the economy in the world, and have done so for over 10 years. The International Monetary Fund (IMF) projected that from 2013 to 2017 it will maintain its growth at least 26% above World Growth GDP. Note: GDP, will be the measure utilized in this paper when referring to growing economies. This information comes from the IMF data base and calculations made by the author. Income distribution refers to how a...
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...Brazil – Country Report Introduction The country has been expanding its presence in international financial and commodities markets, and is one of a group of four emerging economies called the BRIC countries. Although struggling with social inequality and infrastructural deficits we think that Brazil is already a great world power. Also what attracted us to Brazil as a case study for this report is it’s exotic character. Not many people really know the extent of Brazil’s recent growth and improvements in social security and in overcoming poverty. We expect the labor force and operational costs to be low, like in the other emerging countries like China. However we take in to consideration higher costs involving security and bureaucracy. Chapter 1 – Short presentation of the country The Federative Republic of Brazil is the largest country in both South America and the Latin America Region. It is the world's fifth largest country, both by geographical area and by population, with over 193 million people. It is the largest Lusophone country in the world, and the only one in the Americas. Bounded by the Atlantic Ocean on the east, Brazil has a coastline of 7,491 km. It is bordered on the north by Venezuela, Guyana, Suriname and the French overseas region of French Guiana; on the northwest by Colombia; on the west by Bolivia and Peru; on the southwest by Argentina and Paraguay and on the south by Uruguay. Numerous archipelagos form part of Brazilian territory, such as Fernando...
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...by the United Nations Development Programme (UNDP). However, India’s rank out of 187 countries is no better than last year’s. With a HDI value of 0.554 and a rank of 136 among 187 countries, which it shares with Equatorial Guinea, India is placed in the “medium development” category. There has been steady improvement in its HDI value, which was 0.345 in 1980. In 1950, Brazil, China and India together represented 10 per cent of the world economy, while the six traditional economic leaders of the North accounted for more than half. According to projections in the report, by 2050, Brazil, China and India will together account for 40 per cent of global output, far surpassing the projected combined production of today’s Group of Seven bloc. | | | HDI is a composite statistic of life expectancy, education, and income indices used to rank countries in four tiers of human development. Since 2011, the UNDP report has included an inequality adjusted HDI, also known as IHDI, which attempts to include the effects of inequality on human development. The IHDI for India this year is 0.392. High gender inequality The country fails miserably on the front of gender equality. On the gender equality index, with a value of 0.610, India has one of the worst indicators in the medium human development category. For example, the country has only 10.9 per cent of seats in Parliament occupied by women. Countries like South Africa (41.1 per cent, HDI – 121), Timor-Leste (38.5 per cent, 134), Iraq...
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...Although Latin America has faced many social, political, and economic issues within the last three centuries, inequality remains one of the most important, historical, and omnipresent aspects of the region’s culture. As Europeans took over Latin America during the time of colonization, they implemented many elitist social structures that have held strong and are evident today (Harris). Income inequality is the most visible and greatest disparity that the region faces; yet inequality between gender, ethnicities, and education remain strong and significant problems with a necessity for improvement. Inequality of wealth and disparity of power and influence are Latin American’s greatest curses and are at the root of many of the developmental, social, criminal, and political problems that continue to plague the region (De Ferranti). Since inequality has pervaded into every feature of Latin American society, it is important to measure inequality accurately in order to obstruct the causes of the discrimination and prevent new ones from beginning. The Gini Coefficient is an effective way that people indicate the inequality of a country by measuring a frequency distribution of income or wealth. Using the "Gini Index" of inequality in the distribution of income and consumption, the researchers found that Latin America and the Caribbean, from the 1970s through the 1990s, measured nearly 10 points more unequal than Asia, 17.5 points more unequal than the 30 countries in the Organization...
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...Brazil was colonized by the Portuguese and later by other countries around the globe in search of power. During the 16th century, it went through the process of colonization, on April 1500 by a Portuguese diplomat on their way to India for goods. Brazil first colonizers were the Native Indians in the country, at first the Indians and Portuguese worked together during harvest but later on the Portuguese decided to enslave them. Since the enslavement of Indians did not work out they turned to the African slave trade for their workforce. For the next two centuries after the discovery of Brazil, it had to deal periodically with foreign powers on the hunt for Brazil’s resources. Such countries as England, France, and Spain sought out to fight the...
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...the Spanish or Portuguese languages prevail. These areas include Mexico, most of Central and South America, Cuba, Dominican Republic, Puerto Rico and Brazil. Latin America can be subdivided into different regions, such as North America, South America, Central America and the Caribbean. (Wikipedia, Retrieved 2010). Latin America consists of many different ethnic backgrounds and races. It is one of the most diverse regions in the world. Some of the predominant races/backgrounds include European-Amerindians (Mestizo), Amerindians, European, Mulatto, Black, Asian and Zambo (mixed Black and Amerindian). Latin America continues to be challenged by inequality and poverty. Poverty is defined as, “the state of one who lacks a usual or socially acceptable amount of money or material possessions.” (Merriam-Webster, Retrieved 2010). According to the World Bank, nearly 25% of the population of Latin America lives on less than $2.00 a day. At least 182 million people are living in poverty in Latin America and at least 68 million people are living in extreme poverty. Poverty is defined as living on less than $2.15 per person per day and extreme poverty as living on less than $1.08 per person per day. “The poverty rate in Latin America was halved from 60% in 1950 to less than 30% in 2000. However, during the same time period income inequality remained more or less the same, making both poverty reduction and economic growth more difficult; as...
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...provider of these needs by creating social policies that ensure the survival for those living in extreme poverty. Based on this, income transfer programs were created, with the purpose of, in the short term, alleviate the problems arising from poverty and in the long term, investing in human capital, breaking the poverty cycle. A conditional cash transfer (CCT) is a type of income transfer program with the aim to reduce poverty by creating welfare programs conditional to the beneficiary’s actions. The government only transfers the money to people who meet certain conditions, which may include the enrolment of children in school, going to the doctor and receiving vaccinations, among others. Bolsa Familia is the largest conditional cash transfer in the world and it was implemented in Brazil (World Bank, 2005). and it consists in the financial aid to poor families as long as they keep their children often at school and vaccinated. The program aims to reduce poverty in the short and long term through conditional transfers of capital, which, in turn, aims to break the generational cycle of poverty from generation to generation. The elements that determine the outcome of an election change considerably depending on the country, its historical moment, social, economic and political conditions and on the candidates who intend to occupy the position. In Brazil, this dispute has been polarized in the last two decades, around two...
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...Globalization in Brazil: Poverty, Labor, and Human Rights within a Neo-Liberal Framework By: Dylan Fermante 210015071 For: Prof. Hoosiyar AP/HREQ 3010 July 14, 2010 Since the collapse of the Bretton Woods system in the 70s a new framework for a global economic structure has been developing. This modern structure is an evolved form of capitalism, driven by neoliberal ideologies, which has adapted to the economic and social conditions of the current day. The recent phenomenon of globalization is in essence a modern form of global hegemony and dominance that establishes control through financial domination and capital exploitation. This paper focuses on this process of domination by examining the effects of neoliberal policies and structural reforms using the nation of Brazil as the unit of analysis. As will be discussed later in this report the government of Brazil has undergone significant structural changes over the last few decades that have resulted in an economic shift towards neoliberal policies. Policies promoting free enterprise capitalism, privatization of national assets, deregulation, tax reforms, flexible interest rates, trade liberalization and reductions in public expenditure have resulted in devastating outcomes for poor and marginalized groups within Brazil. These economic reforms have reordered government priorities resulting in cuts in social spending, worsening of wage inequality, displacement of workers, intensification of national debt and the weakening...
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...Introduction Racial disparity and discrimination is not a new concept to any nation. In fact, many were built on the back of slave labor, whether the slaves were indigenous peoples or imported bodies. While many nations have undertaken measures to overcome racial disparity, others have encouraged racial democracy. Brazil, a modern and industrialized nation, suffers from racial discrimination based on their position in the world economy and built on the ideology of the past. History Brazil’s history is rife with racism and slavery, dating back to its discovery by Pedro Alveres Cabral in 1500. Brazil was originally settled with the intention of harvesting Brazilwood. However, over time the profits from that were supplanted by sugar, which soon became the major export (Phillips 117). Over a short period of time, Brazil became the leading producer of sugar in the Atlantic world. The production of all these exports meant cheap labor was needed. During this time, the Portuguese were sending between 4,000 and 5,000 slaves per year to Brazil from Angola and West Africa; by the 18th century, one million slaves had been imported (117). The continually shifting landscape meant that Brazil’s exports continued to shift. By the time the 19th century came around, Brazil’s major export was coffee as sugar production had shifted to the Caribbean Islands. The continued influx of European slaves and citizens resulted in an uneven population. European labor was generally more skilled...
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