Contrasts in the Global South 1

BRAZIL AND SOUTH AFRICA

Learning Objectives
To understand different policies followed by developing countries

To understand policies followed by BRICS such as Brazil and South Africa

To understand implications of above policies

BRICS
What are BRICS? BRICS, originally grouped Brazil, Russia, India and China

an acronym coined by Goldman Sachs economist Jim O'Neill in 2001 to indicate 5 largest economies

Most prominent subset of fast growing emerging economies

South Africa joined the group in 2011, turning BRICs into BRICS.

www. https://infobrics.org/
BRICS…
BRICS account for roughly forty per cent of the world's population

About 22 % of the world's Gross Domestic Product

However, BRICS is not an homogenous group

Some indicators
Countries % in world GDP per Ranking in Trade/GDP Individuals Poverty
output capita Gender ratio (%) using headcount
(2019) (2019) Inequality internet (% ratio at
(Constant (constant Index of $1.90 a day
US$) US$) population) (2011 PPP)
(% of
population)
Brazil 2.76 11,121 94 29.0 70.43 4.4
Russia 2.07 12,011 53 49.1 82.6 0.5
India 3.48 2169 127 40.0 20.08 22.5
China 13.58 8254 36 35.7 54.3 0
South Africa 0.51 7346 90 55.2 56.16 18.7
Brazil
World Bank strategy for Brazil
* Fiscal sustainability and improved service delivery

* Productivity growth and investments by the private sector

Inclusive and sustainable development

Challenges
Education:

Learning levels remain behind countries comparable to Brazil

In 2019, in Brazil, 4 out of 10 youths by the age of 19 did not finish high school.

A significant share of children up to 3 years old do not have access to early childhood
education

Gender equality:

The active promotion of gender equality is an essential component of the World Bank's
strategy in Brazil and has expanded considerably since 2010.
Some other indicators
Brazil's economic and social progress between 2003 and 2014 lifted 29 million people
out of poverty

Inequality dropped significantly (the Gini coefficient fell by 6.6 percentage points in the
same period, from 58.1 down to 51.5).

Income level of the poorest 40% of the population rose, on average, 7.1% (in real terms)
between 2003 and 2014, compared to a 4.4% income growth for the population
South Africa: Another BRIC
economy
South Africa, a country on the southernmost tip of the African continent

South Africa has made considerable strides toward improving the wellbeing of its citizens since
its transition to democracy in the mid-1990s, but progress is slowing
Based on the international poverty line of $1.90 per day, (2011 Purchasing Power Parity,
exchange rates), 18.8% of South Africans were poor in 2015, following a decline from 33.8% in
1996.
Factors driving this progress include, among others, real income growth, expansion of social
safety nets, access to basic services including subsidized housing credit
Poverty reduction has, however, slowed down with $1.90 per day poverty rate increasing from
16.8% to 18.8% between 2011 and 2015.
South Africa (contd.)
This is partly due to structural challenges and weak growth since the global financial
crisis of 2008, but increasingly too by labor market developments that low skills of poor

Unemployment remains a key challenge, standing at 27.6% in the first quarter of 2019.
The unemployment rate is even higher among youths, at around 55.2%. 

A dual economy with one of the highest inequality rates in the world, with a
consumption expenditure Gini coefficient of 0.63 in 2015.
Inequality has been persistent, having increased from 0.61 in 1996.

High inequality is perpetuated by exclusion and the nature of economic growth, which is
not pro-poor and does not generate sufficient jobs. 
South Africa (contd)
Inequality in wealth is even higher: the richest 10% of the population held around 71%
of net wealth in 2015, while the bottom 60% held 7% of the net wealth

World Bank concluded – “Not only does South Africa lag its peers on level of inequality
and poverty, it lags on the inclusiveness of consumption growth.”