Brazil is known to have struggled with poverty despite its economy having been ranked as having the 9th highest gross domestic product (GDP) globally. The country admittedly is rich in natural resources and land due to its large size, but as a result of the resources being unequally distributed among its population there is a noteworthy level of poverty existing today. According to the statistical data made available by the UN, 80 percent of the wealth is controlled by only 20% the population while have of the nation’s income is controlled by a mere 1% of the population. In an effort to combat the high levels of poverty and decrease the huge disparity between the wealthy and the poor. The social, socio-economic, political, endogenous and exogenous …show more content…
Other laws that establish mechanisms for progressive land distribution allow the government to expropriate unused or over-large landholdings and then pay back the owners through the issuance of government bonds. Since the mid 1980s, citizens groups in Brazil—led by the Landless Workers Movement (MST is the Portuguese acronym), the Confederation of Agricultural Workers, and the Catholic Church—have used such laws to push for land redistribution. As a consequence, the fiscal and balance-of-payments deficits fuelled inflation and caused widespread demand for indexation, thus accelerating inflation very rapidly in the first half of the 1980s. The re-democratization process in 1985 was followed by expansionist fiscal policies that brought even more inflationary pressures. The main outcome of the accelerating inflation was an increasing economic instability, which had an impact on economic growth, investments and income inequality. Several desperate stabilization attempts based on price and wage freezes were undertaken between 1986 and 1991, but all failed mainly due to the lack of fiscal