Social policy in Brazil (2004-2014): an overview

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The point: I tried to demonstrate the relationship between the positive evolution of social policies in Brazil during 2004 – 2014 with the expressive decline in poverty and inequality. Especially the period after 2004 was a different period for the Brazilian economy, with sustained economic growth. According to the Brazilian Institute of Geography and Statistics (IBGE) data the Gross Domestic Product (GDP) increased from US$ 1.5 trillion in 2000 to US$ 2.8 trillion in 2014. Inequality indicators also showed a decrease over this period, with the Gini index decreasing from 0.570 in 2004 to 0.515 in 2014. As consequence, poverty alleviation was expressive since the extreme poverty rate decreased almost 68% between 2004 and 2014, an average reduction of about 10% per year. The positive economic context (generating primary surpluses), with an increasing appreciation of the minimum wage, the “Bolsa Família” Program, as well as the creation of the Ministry of Social Development (MDS) in 2004 favored governmental action in attention on social policy, especially the social public expenses. In this sense, highlighting some areas of social policy, Brazil had some positive evolution of total public spending from 13% of GDP in 2002 to 17, 5% in 2015. In this sense, spending elevation represent more than 3 percentage points of GDP, with featured areas: a) Education and Culture, an increase of 0.74 percentage points (pp) of GDP; b) Social Assistance (0.78 pp of GDP) and c) Social Security (with 0.97 pp of GDP). However, with international financial crisis between 2007 and 2008, it showed negative expectations about Brazilian economy and their ability to sustain the positive indicators. According to difficulties that Brazilian population confronted in past, it is important to understand the current phenomenon preserving the gains obtained in previous decade, with particular relevance to maintenance of social policies.

Quotes: “Castro et al. (2012) show the ascending trajectory of social public spending between 1995 and 2010, with real growth of 172 per cent over 16 years, highlighting the period between 1995 and 2002, when the growth was 32 per cent, leading to significant progress and the aforementioned scenario of the Brazilian economy.”

This positive trend improved further over the next decade, as pointed out by Osorio (2015), Souza (2012) and MDS/SAGI (2015). The income of the poorest 20 per cent of the population increased by 127 per cent between 1995 and 2009, while the same indicator for the richest 20 per cent of the population increased by only 54 per cent. Extreme poverty during this period decreased from 16.4 per cent to 4.7 per cent of the population, while the Gini index decreased from 0.599 to 0.539, and real GDP growth in 2010 was over 7 per cent, an extremely positive scenario.”

Reference: SILVA, P. O. A. (2017). Social Policy in Brazil: an Overview. In: International Policy Center for Inclusive Growth (IPC-IG). Working Paper number 155. ISSN 1812-108x.