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Creation of revenue for investment in Brazil 'one of country's strengths'

Date added: 15th October, 2010 at 13:50
(view all articles from October, 2010)

Categories: Economy

By creating revenue for investment in Brazil, the country encouraged economic growth, it has been claimed.

Writing for BusinessDay, partner at financial communications firm Brunswick Itumeleng Mahabane compared the Latin American nation with South Africa.

He noted the way in which Brazil capitalised on the commodities boom, reporting some mining firms were earning operating margins of over 50 per cent.

By not taking advantage of the market for resources, South Africa would appear to have had "poor insight", where Latin America's largest economy did not.

Another of Brazil's successes cited by the writer was encouraging manufacturing expansion while making more jobs available.

Indeed, the Brazilian Institute of Geography and Statistics (IBGE) revealed the unemployment rate fell 1.4 per cent in August compared with the previous year - the lowest figure since records began in 2002.

The number of people out of jobs also dropped by 15.4 per cent - representing 289,000 individuals - over 12 months.

Meanwhile, workers' real average income soared 1.4 per cent between July and August, experiencing a yearly rise of 5.5 per cent.

Jobs specifically in industry were up for the eighth consecutive month, according to the body's Monthly Survey of Industrial Employment and Wages.

The region which saw the largest annual industrial jobs growth was Rio Grande do Sul, with an increase of 8.1 per cent.

However, all 14 areas surveyed by the organisation saw expansion in the labour market over the 12 months leading to the end of August, with north-east Brazil boasting a rise in 13 of the 18 subsectors used as a measure.

Overall, between July and August, employment in industry experienced a seasonally adjusted rise of 0.1 per cent.

Mr Mahabane commented that one of Brazil's achievements was the growth of social security and the creation of a focused skills development plan, which was connected to a state-owned enterprise investment programme.

"In roughly the same length of time that SA [South Africa] has been a democracy, Brazil has moved millions of people out of poverty and built an economy in which the middle class is the majority," the expert stated.

Statistics from the IBGE showed real income usually earned stood at an average of R$1,472.10 (£552.52) per month in August - up from R$1,451.91 in July and R$1,395.21 the previous year.

The increasing wealth of the Brazilian population has seen around 20 million people lifted out of poverty during current president Luiz Inacio Lula da Silva's leadership.

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