The neoliberal economic model implemented in 1990 is largely responsible for worsening Brazil's social problems today. Social devastation has been the main result of the neoliberal economic model in Brazil inaugurated by President Fernando Collor in 1990 and maintained by Presidents Itamar Franco, Fernando Henrique Cardoso, Lula da Silva, Dilma Roussef, Michel Temer and Jair Bolsonaro. The current economic recession, social inequality, mass unemployment and the extreme poverty of the country demonstrate the infeasibility of the neoliberal model implemented in Brazil. The social devastation suffered by Brazil with social inequality, mass unemployment and extreme poverty is demonstrated through indicators of concentration of income, unemployment, social inequality and extreme poverty.

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NEOLIBERALISM AND AGGRAVATION OF SOCIAL PROBLEMS IN
BRAZIL
Fernando Alcoforado*
The neoliberal economic model implemented in 1990 is largely responsible for worsening
Brazil's social problems today. Social devastation has been the main result of the
neoliberal economic model in Brazil inaugurated by President Fernando Collor in 1990
and maintained by Presidents Itamar Franco, Fernando Henrique Cardoso, Lula da Silva,
Dilma Roussef, Michel Temer and Jair Bolsonaro. The current economic recession, social
inequality, mass unemployment and the extreme poverty of the country demonstrate the
infeasibility of the neoliberal model implemented in Brazil. The social devastation
suffered by Brazil with social inequality, mass unemployment and extreme poverty is
demonstrated through indicators of concentration of income, unemployment, social
inequality and extreme poverty.
Brazil has the second highest concentration of income in the world, according to the
Human Development (HDR) report of the United Nations (UN) published in December
2019. Brazil is only behind Qatar, when analyzed the richest 1%. In Brazil, the richest
1% concentrates 28.3% of the country's total income (in Qatar this proportion is 29%).
That is, in Brazil almost a third of the income is in the hands of the wealthiest. The richest
10% in Brazil, on the other hand, account for 41.9% of the total income. Brazil is the
country with the highest concentration of income when compared to the countries in the
group of developing countries of the BRICS (Brazil, Russia, India, China and South
Africa). India appears in the ranking with 21.3% of the total income in the hands of the
richest 1%. Russia has 20.2% and South Africa leaves 19.2% of its total income with the
richest 1%. Meanwhile, China is the country of the BRICS with the lowest concentration,
in this sense, with 13.9%.
Comparative research led by Thomas Piketty, author of The Capital in the 21st century
published in 2014, points out that 27.8% of the national wealth is in few hands in Brazil.
Almost 30% of Brazil's income is in the hands of just 1% of the country's inhabitants, the
highest concentration of its kind in the world. This is what the 2018 World Inequality
Survey indicates, coordinated, among others, by the French economist Thomas Piketty.
The group, composed of hundreds of scholars, provides a database that allows comparing
the evolution of income inequality in the world in recent years. The World Wealth &
Income Database points out that the richest 1% of Brazil held 27.8% of the country's
income in 2015.
According to the data collected by Piketty's group, Brazilian millionaires were ahead of
millionaires in the Middle East, who account for 26.3% of the region's income. Brazil
also stands out in the cut of the richest 10%, but not as intensely as is observed when
comparing the richest 1%. The data shows the Middle East with 61% of income in the
hands of its richest 10%, followed by Brazil and India, both with 55%, and Sub-Saharan
Africa, with 54%. The region where the richest 10% hold the smallest share of wealth is
Europe, with 37%.
The European continent is considered by researchers as an example to be followed in the
fight against inequality, since the evolution of disparities in the region was the least
among the indicators since 1980 that is due to the social democratic policies adopted by

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several governments. To solve the problem of social inequality, the researchers propose,
in general, the implementation of progressive taxation regimes and the increase of
inheritance taxes, in addition to more rigidity in the control of tax evasion. The
researchers also highlight the importance of public investment in areas such as education,
health and environmental protection.
Since the 1980s, large transfers from public to private equity have occurred in almost
every country, rich or emerging, which has grown worldwide with the adoption by
governments of neoliberal policies. In several countries, including Brazil, national wealth
has increased substantially with the expansion of private equity and the reduction of
public equity, says the survey. According to the authors, the reduction of public assets
obviously limits the ability of governments to combat inequality. Figure 1 below shows
Brazil with the highest concentration of income among all the countries surveyed, in light
green.
Figure 1- Share of the richest 1% in national income
Source: Graph of the database. Available at websaite
<https://brasil.elpais.com/brasil/2017/12/13/internacional/1513193348_895757.html>.
In addition to presenting the worst indicators of social inequality in the world,
unemployment rates in Brazil are at extremely high levels (12.8 million unemployed)
with the prospect of remaining at high levels in 2020, 2021 and 2022, according to ILO.
The data are part of a survey carried out by the International Labor Organization that does
not foresee any improvement in the situation. In absolute terms, the ILO indicates that
2019 ended with 12.8 million unemployed in Brazil. In 2020, the forecasted number

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remains at the same level and drops to 12.7 million in 2021. Between 2022 and 2024, the
total remains between 12.5 million and 12.6 million. Therefore, the ILO does not see
anything important to allow the unemployment rate in Brazil to return to what existed in
2014.
In addition to the indicators of social inequality and unemployment, extreme poverty in
Brazil already totals 13.5 million people. The group of poor people in Brazil survives on
R$ 145 (US$ 33.02) per month. The number of poor people in Brazil is greater than the
population of Bolivia, according to the IBGE. The number of poor people has been
growing since 2015, reversing the downward curve of poverty in previous years. Since
2014, 4.5 million people have fallen into extreme poverty, living in miserable conditions.
The contingent is a record in seven years of the historical series of the Brazilian Institute
of Geography and Statistics (IBGE). The rise in unemployment and the drastic reduction
of resources for social programs and to Bolsa Família program widen the gap of the
poorest.
Poverty mainly affects states in the North and Northeast of Brazil, especially the black
and brown population, with no education or incomplete basic education. The growth of
extreme poverty coincides with the beginning of the recession that began in 2014 and
continues in Brazil thanks to the inaction of the Bolsonaro government. An IBGE data,
however, draws attention. Of the 13.5 million poor, 13.6% had some occupation, albeit
informal, with less than 40 hours of work per week. The way out of this population's
misery depends, among other measures, on the reactivation of the economy so that they
can enter the labor market and have an income that takes them out of extreme poverty
and the access that people have to social programs.
To have access to social programs, the government will have to invest an additional R $
1 billion per month to serve Brazilians in conditions of extreme poverty that will hardly
occur because the government of Jair Bolsonaro is focused on deepening fiscal
adjustment, and on the idea of reducing the role of the State, according to the neoliberal
model that has been embraced by the country since the government of Fernando Collor
in 1990. In addition to this, the government's social insensitivity to the country's serious
social problems.
To combat social inequalities, unemployment and the extreme poverty of the population,
the federal government should assume the reins of the national economy, abandoning the
failed neoliberal economic model to reactivate the Brazilian economy and full
employment with the immediate implementation of a wide public infrastructure works
program (energy, transport, housing, basic sanitation, etc.) with the participation of the
private sector to combat current mass unemployment by raising employment and income
levels for families and businesses to, consequently, promote the expansion of
consumption by families and companies resulting, respectively, from the increase in the
wage bill of families and the income of companies with investments in public works to
make Brazil grow economically again.
In addition, the federal government should adopt the immediate audit of the public debt
followed by renegotiation with the extension of time of the payment of interest on the
country's public internal debt, aiming at reducing government charges with the payment
of the public debt to increase public savings for investment, promote the increase in public
revenue with the taxation of large fortunes, dividends from individuals and banks and the

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elimination of superfluous expenses in all the powers of the Republic with the reduction
of public agencies and commissioned personnel. These measures would contribute to the
federal government having the resources to reactivate the economy and strengthen social
programs to combat social inequalities and extreme poverty.
Given the prospect of worsening social inequalities, unemployment and extreme poverty
in Brazil, what would be the solution to mitigate these problems within the framework of
capitalism, in addition to the effort to reactivate the economy? The solution would consist
of the adoption by the federal government of public policies aimed at the development of
the social and solidarity economy to alleviate unemployment and the reinforcement in the
implementation of basic income or minimum universal income to alleviate poverty with
the Bolsa Família Program.
In their book L´économie sociale et solidaire (Paris: Presses Universitaires de France,
2016), Géraldine Lacroix and Romain Slitine affirms that the Social and Solidarity
Economy is one of the solutions to alleviate the problem of unemployment and to open
the way to invent in the future other ways of producing and consuming contributing to
greater social cohesion. According to Lacroix and Slitine, the Social and Solidarity
Economy offers answers to numerous questions in contemporary society. This book
contains information that the social and solidarity economy corresponds to 10% of GDP
and is responsible for 12.7% of employment in France. In Brazil, the social and solidarity
economy represents 1% of GDP [REDE BRASIL ATUAL. Com autogestão, economia
solidária já representa 1% do PIB no Brasil (With self-management, the solidarity
economy already represents 1% of GDP in Brazil). Available on the website
<http://www.redebrasilatual.com.br/economia/2015/08/economia-solidaria-ja-
representa-1-do-pib-no-brasil-3696.html, 2015>].
The Social and Solidarity Economy is a new model of economic, social, political and
environmental development that has a different way of generating work and income, in
different sectors, whether in community banks, credit unions, family farming
cooperatives, fair trade issue, in exchange clubs, etc. The Social and Solidarity Economy
constitutes a new way of organizing work and economic activities in general, emerging
as an important alternative for the inclusion of workers in the labor market, giving them
a new opportunity through self-management. Based on the Social and Solidarity
Economy, there is the possibility of recovering bankrupt companies, and to continue
them, with a new mode of production, in which the maximization of profit is no longer
the main objective, giving rise to the maximization of the quantity and the quality of work.
It can be said that the adoption of the Social and Solidarity Economy is, without a doubt,
the solution that would allow, within the framework of capitalism, to face mass
unemployment that tends to grow in a dizzying way in the future with the replacement of
skilled workers and not qualified by robots in the labor market. This is an important
alternative for the inclusion of workers in the labor market, giving them a new opportunity
to work with a new mode of production in which profit is no longer the main goal. The
adoption of the basic income policy or universal minimum income for the poor population
is one of the solutions to alleviate poverty as it would allow the poor to start having money
to meet their basic needs in terms of food, health, housing, etc.
In turn, the basic income policy or universal minimum income for the population is one
of the solutions to alleviate poverty. This idea is not new. Friedrich August von Hayek,

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Austrian economist and philosopher, later naturalized British, considered one of the
greatest representatives of the Austrian School of economic thought, was the proponent
of this idea when he published between 1973 and 1979 his work Law, Legislation and
Liberty (Routledge, 1988). The neoliberal income transfer program of the Lula and Dilma
Rousseff governments in Brazil, Bolsa Família, is an example of the application of
Hayek's basic income policy.
The book Utopia for Realists by Rutger Bregman (London, New York: Bloomsbury
Paperbacks, 2017) shows that giving free money to everyone, that is, a universal
minimum income program would make it possible to alleviate or eliminate poverty.
Among the reasons he points out for this idea to become reality, lies in the fact that
distributing money reduces crime, improves the health of the population and allows
everyone to invest in themselves. More than that, a universal minimum income program
builds social peace and alleviates political violence that would feed on social inequalities,
mass unemployment and extreme poverty to become a social revolution.
Bregman defends the utopia of money for everyone and not just for the poor. In the book,
Bregman cites a number of successful examples of how homeless people, Indians and
populations in vulnerable regions developed when they started to receive money without
being asked for anything in return. For him, it will be better with less bureaucracy and the
establishment of requirements. The basic income program should be universal when it is
expanded to the rich and the middle class, so that it becomes a right of all citizens, not a
favor, says Bregman.
The basic income policy for the poor population would bring numerous advantages not
only related to the decrease in crime, improvement of the population's health and
improvement of the poor people's housing conditions, but also the increase in the
consumption of goods and services by the poor population. The government, the provider
of basic income for the poor, would benefit from lower spending on police repression and
the prison structure as a result of reduced crime and homelessness and increased tax
collection resulting from increased consumption by the poor population. There will be no
social peace in Brazil if the policies of social and solidarity economy and basic income
are not adopted for the poor population.
It is not necessary to demonstrate that the measures proposed here can only be adopted
by a government in Brazil diametrically opposed to that of Jair Bolsonaro.
* Fernando Alcoforado, 80, awarded the medal of Engineering Merit of the CONFEA / CREA System,
member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional
Development by the University of Barcelona, university professor and consultant in the areas of
strategic planning, business planning, regional planning and planning of energy systems, is author of the
books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem
Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os
condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de
Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora
Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos
na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social
Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG,
Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica,
Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate
ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores
Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no
Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba,

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2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV,
Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua
convergência (Associação Baiana de Imprensa, Salvador, 2018, em co-autoria) and Como inventar o futuro
para mudar o mundo (Editora CRV, Curitiba, 2019).