Rural poverty in Brazil

Although the country is an important agricultural and industrial power, with the strongest economy in Latin America, poverty is widespread in Brazil. Despite recent improvements in income distribution, the issues of income inequality and social exclusion remain at the root of rural poverty. Brazil is a middle-income country and is rich in natural resources, but poverty levels and human development indicators in poor rural areas are comparable to those in the poorest countries of Latin America. In the country as a whole, about 35 percent of the population lives in poverty, on less than two dollars a day. But in Brazil’s rural areas poverty affects about 51 percent of the population.
Since approximately 19 percent of the total population, or about 36 million people, live in rural areas, this means that Brazil has about 18 million poor rural people, the largest number in the Western Hemisphere. And Brazil’s North-East region has the single largest concentration of rural poverty in Latin America.
The poorest and most vulnerable groups among Brazil's rural poor people are women, young people and indigenous peoples. And child labor is still common among poor households in Brazil.
Lack of access to formal education and skills training is another major cause of rural poverty. In recent years the government has invested large amounts in resources to broaden the scope of technical assistance services and facilitate access to them, especially for poor rural people.

http://www.ruralpovertyportal.org/web/guest/country/home/tags/brazil#

Brazil and India add to pressure on China

In my research I have found this article that indicates that China is facing growing pressure from other developing countries to begin appreciating its currency, providing unexpected allies for the US in the diplomatic tussle over Beijing’s exchange rate policy.
The most forceful statements about case for a stronger Chinese currency it is said comes from the Indian and Brazilian central bank presidents.
The strongest public pressure comes from the US, but still a number of developing economies say that China's dollar peg has imposed costs on their economies.
The head of the Brazilian central bank thinks that a stronger Chinese currency was “absolutely critical for the equilibrium of the world economy”. He said there were “some distortions in world markets, one of them is a lack of growth and another is China”.
The governor of the Reserve Bank of India said that an undervalued renminbi was creating problems for countries, including India.
The prime minister of Singapore, added his country’s voice to the debate last week, saying it was “in China’s own interests” with the financial crisis over to have a more flexible exchange rate.
Some in China have fended off US pressure for a stronger currency, describing it as a distraction from the real causes of the financial crisis. However, criticism from developing countries is not so easy to bat away. “If the rich and emerging economies are united in asking China to revalue, it would be harder to dismiss the request as an example of superpower arrogance,” said Sebastian Mallaby at the Council on Foreign Relations.
The impact of China’s currency policy on other developing countries is not clear-cut, however. Although a number have seen their currencies appreciate sharply over the past year, putting pressure on their exports and exposing them to fiercer competition from China, the economic recovery in China has also provided a boost, especially for its neighbours in Asia as well as commodity-producing countries such as Brazil.

http://www.ft.com/cms/s/0/1d692fd2-4d1c-11df-baf3-00144feab49a.html

Brazil's inflation points to higher rate

According to Andre Perfeito, an economist at Gradual Investimentos, Brazil’s broadest measure of inflation rose in March at its second-fastest pace in 17 months, reinforcing the “urgent” need for the central bank to start raising rates in April to put a lid on consumer prices.

Consumer, wholesale and construction prices, as measured by the IGP-M price index, jumped 0.94 percent this month, after rising 1.18 percent last month, the Getulio Vargas Foundation said in a report posted on its Web site. The gain was in line with the median 0.93 percent forecast in a Bloomberg survey of 28 economists. The index jumped 1.94 percent from a year ago.

Accelerating inflation has fueled expectations the central bank will raise borrowing costs in Latin America’s biggest economy next month for the first time since September 2008. Policy makers, after leaving the benchmark Selic rate unchanged at 8.75 percent on March 17, said they see prices rising “markedly” faster than their 4.5 percent target this year.

Perfeito says that, “Today’s figure shows it’s urgent that the central bank start tightening monetary policy.”

The yield on the interest rate future contract due in January 2011, the most traded on the Sao Paulo BM&F exchange, was unchanged at 10.36 percent at 10:15 a.m. New York time.

Analysts predict consumer prices will rise 5.16 percent this year, exceeding the midpoint of policy makers’ target, according to the median forecast in a central bank survey published yesterday. The same survey showed economists expect the central bank to raise the benchmark interest rate to 9.25 percent in April.

Worsening Outlook

“Today’s reading adds to doubts on why policy makers kept the rate unchanged at the previous meeting -- until the next one takes place, the inflation outlook will continue to worsen,” Perfeito said.

The central bank targets inflation of 4.5 percent, plus or minus two percentage points.

Wholesale prices rose 1.07 percent in March compared with 1.42 percent in February, the Getulio Vargas foundation report said. Consumer prices rose 0.83 percent in the month, down from 0.88 percent in February.

Source: businessweek.com
Publication date: 3/31/2010
http://www.freshplaza.com/news_detail.asp?id=61311