Brazil's government-run oil company discovers a new ultra-deep oil fields. But Gallup reveals an already wide gap between the rich and the poor, which could now grow even wider.
Brazil's oil discovery could make it one of the top oil-producing countries in the world. But is this good for all Brazilians? In Venezuela, currently one of the top oil producers in the world, Gallup finds that 59% of people say the increase in oil prices in their country have not benefited them at all. So, is Brazil headed for a similar fate? Could it fall victim to what many economists identify as the resource curse? When a country relies too heavily on the resource, only a select few reap its rewards, thus increasing the gap between the rich and the poor.
Gallup finds that 69% of Brazilians already feel the gap is widening between the rich and the poor. Another consequence of the resource curse is with the boost in currency. Imports are cheaper and domestic goods are no longer in demand, reducing entrepreneurship and development of human capital. This could have a negative consequences in Brazil, where already 61% of people are not confident that if they would start a business it would do well.
One other major part of the resource curse is the drop in government accountability. Some political scientists contend we see a rise in corruption and a weakening democracy. And 66% of Brazilians already feel corruption is widespread in their government, while only one in four people have confidence in the honesty and integrity of elections.
Freedom House's most recent report on political freedom and civil liberty suggests Brazil has fairly strong rule of law and well-established governing systems so as not to fall victim to the resource curse. In fact many of Brazil's other industries can benefit greatly from the money made on oil. That's if the country's new income is distributed in the way that supports long term modernization. I'm Yasmin Vossoughian and join us again to hear more voices from around the world.