Vicious Circle of Poverty in Brazil


Poverty is a global problem that is entrenched in many developing countries since many of the citizens in such countries live below the poverty line. According to Katel, Kregel and Reinert (2009, p. 102), the vicious circle of poverty is “a circular constellation of forces that tend to act and react on each other in such a way that the country in poverty maintains its poor state”. Although the circle could cause countries to remain poor for long periods, it can be broken. The circle of poverty involves resources that the environment is endowed with and how they are utilized. This paper, I will discuss the circle of poverty as it is applied in many developing countries such as Brazil.

Brazil Country Profile

Brazil is an emerging economy that is geographically located in Latin America. The country has been known historically as the home for most slaves especially after the abolition of slave trade. The agricultural sector contributes a significant percentage of the economic growth together with other sectors such as the industrial and the manufacturing sectors. With a population of about 199 million people, 21.4% of the total population is estimated to live below the poverty line. Despite the country’s endowment with natural resources such as coal, oil and natural forests, Brazil has remained to be poor due to many factors some of which are related to environmental challenges. The challenges posed by the environmental factors such as deforestation, oil spill, and water pollution among others have left the country to continuously struggle with the problem of poverty thereby enhancing the vicious circle of poverty.

Main Environmental Issues of Brazil

Brazil encounters various natural disasters that include the droughts that are experienced in the northern parts of the country, the floods and occasional frost that is frequent in the southern parts of the country (Fearnside & Barbosa, 1996). Among the common environmental issues are deforestation that is experienced in the Amazon basin that is characterized by destruction of the natural habitat while endangering the lives of plants and animals. Illegal trade in wild animal products such as elephant tusks is another environmental issue affecting Brazil. The activity affects the country’s wildlife while endangering their lives. Laurance and Fearnside (2002) argue that water pollution is common in some places such as Sao Paulo and Rio De Jenairo among others. The environmental issues in Brazil are caused by various factors including improper mining activities that bring about land degradation and pollution of water (Tollefson, 2009).

Environmental challenges have various effects on humans that aggravate the vicious circle of poverty in Brazil. First, the country experiences water pollution. Damages caused by water pollution include poor human health due to exposure to diseases such as diarrhea, typhoid, or parasitic infection as well as economic costs such as loss of local livelihoods dependent on waterways (Patriota, 2009). The floods as well bring about water pollution that in turn causes the above challenges. Deforestation is common in Brazil and it is caused by human activities to occupy forest land. Deforestation has affected climatic patterns and agricultural activities. The agricultural activities such as farming done on cleared forest land are not productive enough since they are done on a small scale. This only increases poverty since climatic conditions change resulting in reduced output for many farmers. In addition, the international pricing system does not favor coffee farmers in Brazil.

Concerning economic costs, despite success in poverty reduction rates, the income distribution in Brazil remains highly uneven because of rapid urbanization. Many rural communities depend on local water sources for their livelihood. Surely, pollution and other issues such as deforestation further deteriorate the economic situation of the poor (Mueller, 1995). Such a drastic inequality in income distribution hampers general economic growth, and more importantly, may lead citizens in poor economic situations to turn to illegal professions and/or find work in an “underground” economy.

Environmental Policies

Brazil has many policies that are implemented to overcome the challenges that the country faces from environmental issues. First, the Federal government of Brazil has initiated many programs such as the Pluriannual programs. They include Brasil em Acao that lasted from 1996 to 1999, the Avanca Brasil that succeeded the former program between 2000 and 2003 and “the Plan for the Acceleration of Growth” that was established in 2008 and lasted until 2011. These programs established by the government are necessary in reducing environmental impacts on the country while enabling the country attain sustainable development (Gunderson & Holling, 2002).

The policy plans have been influenced by the federal government in conjunction with other multinational organizations such as the World Bank and the InterAmerican Development Bank among other organizations (Diniz, 2001).

Analysis of Circle of Poverty in Brazil

The circle of poverty as indicated in the figure above provides a relationship among these four factors with the factors being interconnected. The economic productivity of Brazil is based on combination of economic production and natural resources. Due to inefficiency, the country mismanages its natural resources such as forests and ends up being worse off than it was before it began exploiting the forests. Natural forests have significant benefits such as provision of watersheds and acting as natural habitat to Brazil. Without them, these benefits are no longer available and Jain and Sen (2009) call this process the treadmill deforestation that leads to increased poverty. This could be compared to the Rostovian takeoff where forests or natural resources are used to bring about economic development. Treadmill deforestation is what has made Brazil stuck in its economic development process for a long time.

According to Finer et al. (2008), the comparison of Western developed countries and developing countries’ form of natural forest exploitation is different. While Western countries such as the U.S. and European countries cleared forests and wasted timber, the cleared land was used for agricultural production that led to greater national production. However, clearing of natural forests in developing countries such as Brazil has led to the vicious circle of poverty due to inefficiency. First, there is no person or institution responsible for managing the environmental resources such as water and timber and the involved parties keep on misappropriating the resources. Second, the government has no clear effective management policies for the natural resources yet it claims their management. Lastly, the poorly functioning price systems hamper effective exploitation and management of natural resources in Brazil (Salati, 2007).


It is clear from the discussion that Brazil is an emerging economy that has a large level of domestic consumption and economic activities going on at the industry level, although agriculture still plays an important in provision of exports. The country is faced with major environmental degradation issues such as deforestation, water pollution and floods. These environmental challenges are responsible for the stagnated nature of the progress of the country in terms of economic development.


Diniz, E. (2001). Some aspects of the environmental policy in Brazil. Web.

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Finer, M. et al. (2008). Oil and Gas Projects in the Western Amazon: Threats to Wilderness, Biodiversity, and Indigenous Peoples. PLoS ONE, 3(8), e2932.

Gunderson, L. &Holling, C. (2002). Panarchy Synopsis: Understanding Transformations in Human and Natural Systems. Washington, DC: Island Press.

Jain, T. & Sen, K. (2009). Development and Environmental Economics and International Trade. London: FK Publications.

Katel, R., Kregel, J. & Reinert, E. (2009). Ragnar Nurkse: Trade and Development. London: Anthem Press.

Laurance, W. & Fearnside, P. (2002). Issues in Amazonian development. Science, 295, 1643.

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Salati, E. (2007). Relevant environmental issues. Estudos Avancados, 21(56), 107-127

Tollefson, J. (2009). Counting carbon in the Amazon. Nature, 461, 1048-1052.

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