BRASILIA — Brazil’s high cost of living may be its solution to shed its current status as a developing country. According to the Organization for Economic Co-operation and Development standards, effects of the higher cost of living in Brazil, such as its rapid economic development, have not only provided Brazilians with a sufficient level of general life satisfaction, but have also the potential of raising the standards of living in Brazil to that of a developed country.
The dramatic transformation of Brazil’s economy for the past ten years is responsible for making the cost of living in Brazil the highest out of any South American country. An increase in consumer spending along with the emergence of a competitive market has strengthened the economy by providing millions of jobs.
Currently, 67 percent of people in Brazil aged 15 to 64 have a paid job (which is above the OECD employment average). After recovering from hyperinflation in 2004, Brazil’s open economy and trade liberalization are what make its economy the strongest in South America.
However, the economy alone will not provide Brazil with the necessary means to be classified as a developed country. The cost of living in Brazil is not only higher compared to other South American countries for its economic success, but also because of strict labor laws and lack of quality secondary education. These factors prevent Brazil from moving towards development because they create obstacles for the everyday Brazilian to make higher wages and to become better educated.
According to the World’s Bank, Brazil must “make it simpler to start up and wind up companies; cut and streamline taxes; increase domestic savings and investment” if it is to reach its full economic potential. As for education, it is essential for the government to improve its higher education for the public.
Public education at the university level has lacked quality due to under-funding from the Brazilian government and is now rivaled by private education. Access to quality education for the public at a minimal cost is essential in giving Brazilian citizens a chance to participate in the growing economy.
Brazil’s standard of living is likely to improve if government reform can keep up with the pace of the advancing market. Government banks, such as Banco de Brasil and Caixa Economic Federal, must monitor easy credit scams if they are to avoid a credit bubble which would be detrimental for its expanding economy. If Brazil continues to maintain its control over mass inflation, the cost of living in Brazil will eventually be manageable for a larger portion of its inhabitants.
Downsizing poverty through better quality public education and liberalizing the restriction on labor laws are imperative changes Brazil must make if it is to ever become a developed country.
– Kaitlin Hocker