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OECD: the Brazil’s accession

The European Parliament made a brief analysis of Brazil’s accession process to the Organization for Economic Cooperation and Development (OECD) and the development of the Brazilian economy.

An excerpt is presented below.

First of all, cooperation between Brazil and the OECD dates back to the early 1990s, when the organization began its engagement with Brazil, Argentina, Chile and Mexico.

Then, in 2007, Brazil was invited to a “reinforced engagement” with the OECD, which was subsequently called a “key partnership”.

As a key partner, Brazil has had access to partnerships in OECD bodies, accession to OECD instruments, integration into OECD statistical reporting and information systems, and sector-specific peer reviews.

OECD

In addition, the country has been invited to all OECD meetings at ministerial level since 1999.

In 2017, Brazil submitted its application for OECD membership, and in January 2022, the OECD Council decided to start accession talks with the country.

Following the success of the vaccination campaign, economic activity recovered strongly in the second half of 2021, reaching 4.6% growth for the year.

In October, the International Monetary Fund (IMF) projected Brazilian economic growth of 2.8% in 2022 and 1.0% in 2023.

However, high inflation, the tense financial situation and unfavorable weather conditions mitigated the recovery in the first part of 2022.

In this context, the government adopted new measures, including the Auxilio Brasil program, which essentially replaced Bolsa Familia.

The Brazilian Institute of Economics (IBRE) concluded that, in terms of GDP, the recovery from the COVID-19 gap was almost complete.

However, other indicators paint a bleaker picture. The interest rate set by the Central Bank peaked in August (13.75%), while inflation remained high at 8.7% (albeit declining).

Poverty

Infrastructure investment remains tepid and disproportionate to the country’s needs.

While unemployment remains high (9.3%), the percentage of young Brazilians neither working nor studying (NEET) has increased from 19.4% in 2011 to 23.5% a decade later.

This is worrisome, given that the proportion of young people in the population has increased in this last decade, and translates into a larger share of the working-age population not acquiring crucial knowledge and skills at the time when they are most needed.

In addition, the number of Brazilians with a per capita household income of less than 497 reais/month (about €95) increased to 62.9 million in 2021 (about 10 million more than in 2019), while 23 million people were below the poverty threshold set by Auxilio Brasil of 210 reais/capita (€40).

 

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