Monday, March 22, 2010

Brazilian economy faring well

Brazil is definitely changing economically - for the better. When I first came with Luiz to Brazil 11 years ago the local currency, the Real (pronounced: “hay-al,” plural: “hay-eyes”), was worth only 25% of the US dollar. Everything seemed really cheap to us (but was very expensive for Brazilians).

As time has gone by the dollar has continued to dominate the real, but the Brazilian currency/economy has been steadily gaining ground. Today one real is worth 56% of a dollar. The good part about this, from a now-resident point of view, is that the strengthening economy has meant more people with jobs, more accessible consumer credit, falling prices on many consumer items and an overall increase in the standard of living for millions of Brazilians.

Just looking around you can see and feel the difference (unfortunately, this includes more traffic!) So while in the past home electronics were ridiculously expensive here – computers at 4 times the cost of the same in the US, for example – now that gap is narrowing. More people have new kitchen appliances, have bought a car, or can afford to fly to visit their distant relatives.

In the midst of the global economic shake up, here in Brazil we have experienced a mere speed bump. Of course poor people/countries have less to lose, but for a whole set of reasons Brazil is sustaining some pretty good economic trends.

Check out this blog post by Robin Lustig of BBC Radio and BBC World Tonight. Here is an excerpt:

“Ask people around the world how happy they think they'll be in five years' time, and who emerges as the most optimistic?

Yes, it's the Brazilians. For millions of them, the past few years have brought greater wealth, more jobs - and with them, it seems, more happiness. In four years' time, Rio will host the World Cup final, and two years later, in 2016, the Olympic Games. What more could anyone want?
Over the past decade, average income for the least well-off in Brazil has risen by more than 70 per cent. For the richest, incomes have risen by just 11 per cent. As a result, the gap between the rich and the poor has narrowed. Between 2003 and 2008, more than 30 million people were lifted out of poverty.

How was it done? Some of it by targeting social welfare programmes like the Bolsa Familia (family benefit) on the very poorest. But according to Marcelo Neri at the Centre for Social Policy here in Rio, that accounts for only about one third of the narrowing of the poverty gap. The rest comes from new jobs in an expanding economy.” More here.

Luiz and I feel like we dodged a bullet, pulling out of the US economy when we did and setting up shop here in bustling Brazil. Work is still tough and wages are low, but there is not the heavy pall of fear, despair and frustration that so many Americans have been reporting. The joyfulness among its residents that first attracted me to Brazil is alive and well. And growing.


K∂riиє* Smith. said...

Hope you are right. :)

I saw your blog on expatblog, so I came to check out.
I'm brazilian but living in Ireland, I'm so jelous you are there !

Hope you enjoy!


Jim said...

Glad to hear from you.

I hope I am right too!!