Brazil drops by one position in Development Index, ranks 2nd in income concentration

Expert says policies pushed by Bolsonaro administration tend to increase social inequality and extreme poverty

Brasil de Fato | São Paulo |
Brazil dropped by one position in the Human Development Index global ranking disclosed this week by the UN Development Programme
Brazil dropped by one position in the Human Development Index global ranking disclosed this week by the UN Development Programme - Agência Brasil

Brazil has the second highest recorded level of income concentration in the world, only behind Qatar, in the Middle East. According to the 2019 Human Development report disclosed on Monday, Dec. 9, by the United Nations Development Programme (UNPD), one third of Brazil’s wealth is in the hands of the richest 1 percent.

The data disclosed this week refer to the year 2018, and therefore they do not include the first year of the Jair Bolsonaro administration. But Juliane Furno, a doctoral researcher on Economic Development with the State University of Campinas (Unicamp), underscores that the country’s inequality levels are likely to worsen under the far-right government.

Furno explains that two factors can contribute to this scenario. One is Brazil’s low economic growth rate, which is below 1 percent. The other one is the government’s economic policy, which is likely to favor income concentration.

Another factor, the expert says, is the influence of the free market economy pushed by the current administration, which is “obviously likely” to increase inequality, leveraged by a scenario in which social expenditures have become “the bad guy” for the government.

“As the Brazilian State chooses to become smaller and halt social policies, it already becomes responsible for the increase in inequality. But the government also works to deepen this inequality when it blames the crisis on the increase in [social] expenditures.”

The expert also says that the legislation reforms passed in recent years in Brazil, such as the 2017 labor reform and the 2019 pension reform have also contributed to worsen the quality of life of working class Brazilians. According to the UNDP report, Brazil moved up the inequality rankings, going from 9th to 7th most unequal country in the world.

“Their idea is to lower the cost of the labor force and increase profit margins, widening the inequality gap between capital and labor. All that helps to increase income concentration and has a significant impact on poverty and extreme poverty,” Furno says.

HDI report

The Human Development Index report also showed that Brazil dropped one position in the HDI global ranking.

While its reported HDI value went up 0.001 to 0.761 over 2017, the report showed that Brazil dropped from the 78th to the 79th position in the global ranking.

Between 2009 and 2017, the average annual HDI growth for Brazil was 0.004. An HDI value closer to 1 means a more developed country. The United Nations assesses this index on a yearly basis and includes measurements for health, education, and income indicators.

Since 1990, when the UN started to conduct this survey, through to 2018, Brazil recorded a consistent growth trend, of approximately 24 percent, above the average trend for Latin America and the Caribbean, which was 21 percent, and the global average of 22 percent.

Brazil’s most significant growth rates were recorded between 1990 and 2013. As of 2014, due to the economic crisis that hit the country, this growth pace slowed down.

Among South American countries, Brazil shares the 79th position in the HDI global ranking with Colombia. Chile is the best performing country in the region, holding the 42nd position, followed by Argentina’s 48th position and Uruguay, ranked 57. 

HDI classifications are based on fixed cutoff points for low, medium, and high human development. Norway is ranked number one in the global ranking. Medium human development countries include Antigua and Barbuda (which consists of 37 islands lying between the Caribbean Sea and the Atlantic Ocean) scoring 0.776 and holding the 74th position in the global ranking. Low human development countries include Niger in the 189th and last position, scoring 0.377.

Hidden inequality

The UNDP also has an index to cross-reference HDI data with other surveys, because, according to the organization itself, the index could "hide" inequalities if it is isolated from other indicators. With the inequality-adjusted HDI information, Brazil is the country that dropped the most positions in the global ranking, dropping to the 102nd position, scoring 0.574 down from 0.761. The country dropping the most positions after Brazil is Cameroon.

Gender inequality

The UNDP also presented the results for the Gender Development Index, which presents the ratio of female to male HDI values for 166 countries. In Brazil, men scored 0.761, while women scored 0.757.

The data show that women have better health and education conditions than men. But when it comes to gross income, men score better: the gross national income per capita for women is 41.5% lower than the rate for men. In dollars, that means Brazilian women make US$10,432 a year, while men earn US$17,827 on average.

Edited by: Rodrigo Chagas