Millions return to poverty in Brazil, eroding “boom” decade

RIO DE JANEIRO (AP) — When Leticia Miranda had a job selling newspapers on the streets, she earned about $160 a month, just enough to pay for a tiny apartment she shared with her 8-year-old son in a poor neighborhood of Rio de Janeiro.

When she lost her job about six months ago amid Brazil’s worst economic crisis in decades, Miranda had no choice but to move to an abandoned building where several hundred people were already living. All of her possessions — a bed, a fridge, a stove and some clothes — have been jammed into a small room that like all the others in the building has windows with no glass. Residents bathe in large garbage cans filled with water and do their best to live with the stench of mountains of trash and rummaging pigs in the center of the building.

“I want to leave here, but there is nowhere to go,” said Miranda, 28, dressed in a bikini top, shorts and sandals to deal with the heat. “I’m applying for jobs and did two interviews. So far, nothing.”

Between 2004 and 2014, tens of millions of Brazilians emerged from poverty and the country was often cited as an example for the world. High prices for the country’s raw materials and newly developed oil resources helped finance social welfare programs that put money into the pockets of the poorest.

But that trend has been reversed over the last two years due to the deepest recession in Brazil’s history and cuts to the subsidy programs, raising the specter that this continent-sized nation has lost its way in addressing wide inequalities that go back to colonial times.

“Many people who had risen out of poverty, and even those who had risen into the middle class, have fallen back,” said Monica de Bolle, a senior fellow at the Washington-based Peterson Institute for International Economics.

The World Bank estimates about 28.6 million Brazilians moved out of poverty between 2004 and 2014. But the bank estimates that from the start of 2016 to the end of this year, 2.5 million to 3.6 million will have fallen back below the poverty line of 140 Brazilian reais per month, about $44 at current exchange rates.

Those figures are likely underestimates, de Bolle said, and they don’t capture the fact that many lower-middle class Brazilians who gained ground during the boom years have since slid back closer to poverty.