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Economy

Rising affluence in Brazil's favelas

Under Brazil's former president Lula da Silva, 30 million people managed to escape poverty and join the ranks of the country's new middle class. Inequality, however, has not disappeared.

Few emerging markets seem to have taken the transition to industrialization in their stride quite as easily as Brazil.

Internationally, Brazil is constantly gaining in political and economic importance. The country aspires to become a permanent member of the UN Security Council. Brazil has found itself in a position to offer its former colonial power, eurozone member Portugal, aid in overcoming its domestic financial crisis. Brazil's currency, the real, appears to be stable. Oil fields have been discovered along the Brazilian coastline, and are expected to secure the country's economic boom for quite some time. Add to all this a young, free-spending population, promising rapid growth and high sales figures on the domestic market, and the entire country seems to be on the move.

State aid to fight poverty

In recent years, under the government of former president Lula da Silva, 30 million people have managed to leave poverty behind and join the burgeoning ranks of the country's new middle class, defined in Brazil as families with a per capita income of between 110 and 390 euros ($145 to $515) per month.

Shoppers crossing the road in Sao Paulo, Brazil. (AP Photo/Andre Penner)

The new Brazilian middle class are keen shoppers

Carina Souza is a member of the emerging middle class. The 46-year-old domestic help lives and works in Rio de Janeiro, where she brings home about 400 euros a month. Just twenty years ago, the same work netted her a mere 50 euros. Back then, her husband had just lost his job, and her children were still young. "State aid helped me a lot," Carina told Deutsche Welle.

Fernando Henrique Cardoso's social-democratic government launched the first aid programs for the needy in the mid-1990s, including the "Auxílio Gás" project. This saw the distribution of gas canisters free of charge, allowing poor families to prepare at least one hot meal a day.

Lula da Silva's government, which was in power from 2003 to 2010, extended the welfare programs even further. "Cartão Alimentação" offers families in need food packages containing 10 kilos of rice and five kilos of beans, as well as sugar, flour, pasta and milk.

Carina also benefits from the new "Bolsa Família" program, which grants her an additional 10 euros per child per month. Carina says she received the aid until her youngest son turned 18. Before receiving Bolsa aid, she often went hungry herself so that her children could eat, she says.

A favela near Sao Paulo, Brazil. Photo: Friso Gentsch/dpa

30 million people have managed to leave poverty behind

Modest affluence

Today, Bolsa Família supports about 50 million Brazilians. "My friend, unemployed and with three children, currently gets 250 reals [about 100 euros] a month in state aid," says Carina, who has cleaned people's houses since she was 13 and is an expert at cleaning, cooking, doing laundry, ironing and making beds for the upper classes.

With her modest income, Carina would not be regarded as middle class in Germany. Her brick house in a favela on the outskirts of Rio urgently needs repairs, the kitchen has no window to speak of, nor does Carina own a dishwasher - but the family does not go hungry. They are not threatened by abject poverty. Her daughter is a cashier and her son stacks goods on the shelves at a supermarket.

Researchers, however, disagree over the use of the term middle class.

Eduardo Fagnani of the Institute for Economy at Campinas State University (Unicamp) says the idea that Brazil has a new middle class is just wishful thinking. "A middle class is not defined by per capita income, but by its position within the overall structure of society," Fagnani says.

Ongoing construction of the National Stadium in Brasilia. (AP Photo/Eraldo Peres)

Brazil is enjoying a construction boom

He points out that people in Brazil who have overcome poverty, and are now regarded as an upwardly-mobile social class, still depend on state aid. There is also no sign of other features characteristic of the middle class: foreign travel, private pension funds, possibly sending children to private schools. "You can't speak of a real social middle class," Fagnini concludes.

Carina Souza has in fact never travelled anywhere, let alone abroad. However, she could imagine taking a bus to visit her sister in Sao Paulo.

New jobs

Sônia Rocha, an economist at Rio's Institute for Labor and Social Studies (IETS), takes a different view. There is less social injustice in Brazil - due, the economist argues, to the social programs and an upswing on the job market. Over the past ten years, the unemployment rate dropped from 12 to six percent.

At the same time, however, the cost of living has risen dramatically in just a few years, mainly in the cities. Rents in Rio de Janeiro have doubled, forcing many members of the new middle class to move to the outskirts of the city. Carina was lucky: she moved there ten years ago, when Brazilians could still simply occupy the land.

DW.DE