Brazil in Focus

 

Global income inequality began to drop with the onset of Chinese growth, falling from 0.63 in 1990 to 0.61 in 2000. It fell again, and even more dramatically, after 2000 when the Indian miracle kicked in. China and India, after all, are home to half the world's poor. The fact is that, starting last decde, when Chindia took off, the global Gini coefficient fell to 0.54, the lowest level since it was first measured in the 1950s.

Brazil started to narrow its income gap only in the 2000s. After 30 years of stubbornly high inequality, the Brazilian Gini began to drop in 2001, falling from 0.6 to 0.54 by 2009. Both values are very close to globe Gini scores at approximately the same dates. In this way, Brazil looks like the world writ small. That is, the wealth gap among Brazilians is a miniature of the inequality between nations. And since Brazil's rich-poor divide tracks the global divide over an entire decade, Brazil is not just a snapshot but a moving picture of world inequality.

And the rich-poor divide continues to fall. In 2010, inequality fell below 1960s levels, decreasing for the twelfth consecutive year. In January 2012, Brazilian Gini tumbled to 0.519, falling over the previous year at almost twice the rate of the beginning of last decade. As the gap between classes has tightened in Brazil, the recent bout of economic crisis has narrowed the distance between rich and developing nations. In this sense, the rise of the BRICs nations has a parallel in Brazil where tens of millions are climbing out of poverty.

There is also a clear disconnect in the war of public opinion. Lately demonstrators have grabbed headlines by occupying Wall Street and protesting other symbols of wealth and privilege across the developed world. But recent developments tell a different story. When future historians look back at Brazil and the world, they are more likely to describe the beginning of the new millennium not as the era of the "1 percent", but a time of unprecedented shrinking inequality.

Marcelo Côrtes Neri is chief economist at the Center for Social Policy and a professor at the Getulio Vargas Foundation (EPGE/FGV). This article was adapted from a piece published in Valor Econômico. Translation by Roman Gautam.