Brazil is a country on the east of South America. It borders the Atlantic Ocean and it is one of the largest countries in the world. It is widely known for its illustrious soccer team. The country is divided into 26 states and has millions of inhabitants (Wagley 5). Its capital city is Brasilia and the country is rich in mineral wealth and forests.
This paper outlines the statistics of Brazil, the problems facing the country as well as economic policies that can be used to solve the economic challenges facing Brazil. Amongst the problems identified in the paper include poverty, disparities in education, and poor housing. These problems can be solved or reduced through redistribution policy, industrial policy, and competition law.
Key Statistics for Brazil
Source: Central Intelligence Agency (CIA) World Factbook. October 4, 2012
Problems facing Brazil
Poverty
Brazil is a significant country with immense agricultural and industrial capabilities (Herrán 3). Poverty is widespread especially in the rural areas, mainly due to income inequalities and social exclusion of some individuals and groups. Approximately, 35% of Brazil’s population is poor, living on less than two dollars per day.
About 51% of the rural population is affected by this scenario translating to around 18million people, since 19% (approximately 36 million) of the total population lives in the rural areas.
The most vulnerable are the women, indigenous people and those who are young. Poverty is a big setback to an economy since the poor people will always lag behind in development. It prevents Brazil from achieving its goals and objectives of growth and development.
Disparities in education
Brazil offers free public education and there is compulsory primary education. Many primary schools are run by municipalities and the states. However, disparities with regard to quality of education are evident. The education sector faces numerous problems due to poverty, malnutrition and child labor thus resulting into deteriorating education sector (James 389).
Illiteracy compromises development of the country since illiterates cannot adequately conduct businesses. They may be conned easily and they may set prices of products in a manner that risks their businesses. Furthermore, it is hard for illiterates to transact with international traders due to language barrier, since they can only converse well in their vernacular languages.
Poor housing
There are very many people living in the urban areas where housing services are very poor. Some rural-urban migrants embark on temporary housing in poor settlements (favelas) with have poor utilities. Shortage of housing facilities has led to mushrooming of slums and several city dwellers have since then started building their houses using scrap materials like old iron sheets (Herrán 3).
Poor housing is associated with poor sanitation and poor collection of garbage, which has led to spread of diseases such as endocrine problems, cholera, typhoid and malaria especially in Rocinha, a large favela in Brazil. This is critical for the country since sick people can hardly work.
Moreover, most of the migrants are able-bodied men who leave rural areas to settle in urban areas. They leave women and children in the rural areas and since they are overburdened by household chores, they cannot maintain agricultural work easily. This leads to reduction in agricultural yields for a family and for the state.
Economic policies that can help Brazil
An economic policy is an action taken with the intention of influencing or controlling the behavior of an economy (Plosila 113-126). It is mainly implemented by a government in a bid to solve its economic problems. Redistribution policy can work in Brazil. This involves taxation, social transfers and social services.
Social transfers involve providing social assistance and social insurance. Brazil ought to give the rural poor and those living in shanties some social assistance. For instance, building good houses for them and providing cheap health care. Redistribution also involves investing in education, health and social facilities.
Brazil can combine the three aspects of redistribution; social transfers, provision of social services and taxation. In essence, the country should increase taxation for the high income earners and reduce the taxes for low income earners. Taxation should not lead to tax evasion and disinterest for work (Benabou 447-487).
It should also endeavor to make education, health and other social services accessible to all people. Furthermore, the country should champion for transfer of illegally acquired land back to the rightful owners. This will reduce inequalities caused by unequal incomes as well as poor taxation methods and poverty.
An industrial policy can also be used. It is a strategy for development and it involves establishing and developing the manufacturing industries (Gary & Donald 23). Brazil has many processing industries but few manufacturing industries. It should embark on developing manufacturing industries.
Furthermore, it should enhance good transport and communication. It can protect the emerging manufacturing industries by imposing less taxation and facilitating transfer of technology.
This would lead to growth of strong industries and upgrading of the existing industries. This would also create employment for the unemployed youths thereby reducing problems associated with unemployment, such as crime and increase the wealth of the country.
The competition law (anti-trust policy) can also be used. Its objective is to provide good public services through protection of the consumer interests and enhancing healthy competition in the market economy (Martyn 1). It can be used to; eliminate cartels, ensure that mergers and acquisitions are done well and to eliminate barriers to free trading such as high tariffs.
However, free trading should be closely monitored by the government and private organizations to avoid overflowing of goods in the markets.
Independent private bodies should be established to regulate the competition in the markets. This way, consumers and traders will feel free to trade in a highly competitive market. Furthermore, it will improve the economy of the country by enhancing the consumers’ purchasing power.
In conclusion, Brazil is a country endowed with many resources. However, some of the resources are exploited by the rich leaving little or no room for the poor. It is imperative for the government to put in place measures that will enhance resource exploitation by both the rich and the poor. This will reduce the poverty levels in the country and enhance fair income distribution.
Works Cited
Benabou, Roland. Social Mobility and the Demand for Redistribution: The Poum Hypothesis. The Quarterly Journal of Economics, 116 (2), July 2001: pp. 447-487
Gary, Gereffi. & Donald, Wyman. Manufacturing Miracles: Paths of Industrialization in Latin America and East Asia. Princeton, NJ: Princeton University Press, 1990. Print.
Herrán, Carlos. Reducing Poverty and Inequality in Brazil. Washington, D.C.: Inter-American Development Bank, 2005, Print.
James, Preston, Latin America, New York: Odyssey Press, 1969, Print.
Martyn, Taylor. International Competition Law: A New Dimension for the WTO? Cambridge: Cambridge University Press, 2006. Print.
Plosila, Walter. State Science- and Technology-Based Economic Development Policy: History, Trends and Developments, and Future Directions. Economic Development Quarterly. 18 (2), May 2004: pp. 113-126
Wagley, Charles. An Introduction to Brazil (Revised ed.). New York: Columbia University Press, 1971. Print