Challenges of two emerging giants

On the first day of the WSF, in Rio, participants heard about the struggle to reduce inequalities on two key emerging nations - Brazil and China.

The Strategic Secretary of the Brazilian Presidency’s Strategic Affairs, Ricardo Paes de Barros , showed that Brazil had a very sharp reduction of inequalities in ten years. But despite the progress in reducing inequalities, there are still difficult areas.

The HDI of some municipalities in Brazil can be compared to that of Uganda, while others can be compared to the Netherlands, said the researcher. "If you travel across Brazil, you travel through very developed countries and very under developed countries; and that is after ten years of inequalities reduction", he said.

Paes de Barros showed that the decline in inequalities in Brazil was the result of labour income becoming more equal - which, in its turn, is heavily related to progresses in education.

However, challenges ahead "are not small", said Barros. He points out a sustainability problem: while wages in Brazil increased 30% from 2003 to 2011, productivity has increased less than 15%.

A "major challenge" for Brazil is to improve its productivity, to ensure economic growth and reduction of poverty. In 1980, Brazil had the same productivity levels than Korea. From then on, Brazil remains with similar levels, while Korea multiplied its labour productivity tenfold. At the time, China had one tenth the productivity level of Brazil, and now both countries are similar.

Another big challenge for Brazil, according to Barros, is that the people in the bottom 10% of per capita income are being left out. "Our inequality reduction was very good for the people on the 15%-20% area", he said. A governmental programme was created to provide labour inclusion and incorporate them in the economy.

Gretchen Kalonji, John Burns, Ricardo Paes de Barros and Linxiu Zhang

The deputy director at the Center for Chinese Agricultural Policy (CCAP), Linxiu Zhang, said that the future of the country’s economic growth will depend on how they will deal with today’s income and human capital inequalities.

"Today’s human capital inequality among children (health, nutrition and education) is one of the strongest determinants of tomorrow income inequality and stability", she said. The question she asked was whether students today are employable in the future.

Zhang said that there is a huge gap between rural and urban children in all levels of education. According to her, among rural students, there are low attendance levels, high drop-out rates, and under performance.

The reasons for under performance in rural school children include poor health and nutrition, she said.

To overcome these inequalities, she suggests immediate heavy investments in "human capital". Zhang is also director of a programme named "Rural Education Action Program", which promotes health, nutrition and education for the rural population in China.

(Helen Mendes)


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