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Brazil is one of the world’s fastest-growing economies and a South American powerhouse. Rich both culturally and in natural resources, Brazil is known worldwide for its love of soccer and its Carnaval celebrations. Widely recognized to be the prime destination for investors in the Americas, the Brazilian economy nevertheless remains plagued by poverty, and 1 in 12 Brazilians lives under the poverty line.
Impact of Remittances on Brazilian Families
46% of Brazilian remittances are used by families to cover daily expenses, and 8% for housing/rent. These remittances have gone a long way in improving the living standard of Brazilian families throughout Brazil. The purchasing power parity difference between Brazil and the United States remains wide – 1 USD can only pay for ¼ cup of Starbucks coffee in the States, while in Brazil, the same amount can buy a cup of cappuccino. This is why remittances — though seemingly small, as each transaction is about $700 on average — have done so much for Brazil both socially and economically.
Impact of Remittances on Brazilian Society
Brazilian remittances have enabled more Brazilians to pursue an education that they might not have been able to otherwise. Approximately 14% of these Brazilian remittances are used for the purpose of education, which has done much to increase the literacy rate and general level of education of Brazilians. As a result of the influx of remittance money from abroad to Brazil, greater discretionary income brought about increased living standards. This helped to improve the social environment in Brazil by adjusting class disparity. In recent years there has been a sharp drop in violent crime and poverty in the country.
Impact of Remittances on the Brazilian Economy
Brazil has been known for its economic growth, a large part of which can be attributed to the expanding entrepreneurship in the country. This increase is in part due to the rising number of Brazilians who are deciding to invest and start businesses, many of them using the capital that they have obtained through remittances from loved ones abroad. About 11% of remittances to Brazil are used for investment purposes, and 4% for savings, which might then be used as capital for investment in the future. Remittances have indeed done much for the Brazilian economy.
The Contribution of Brazilian Americans
Roughly 650,000 Brazilians currently live and work in the United States. Their median annual income is over $35,000, while most remittance recipients earn less than $10,000 a year. This stark discrepancy is the reason why so many Brazilians have decided to migrate to the United States in order to seek a better life. 50% of all remittances to Brazil are from the United States. Brazilian Americans have contributed in no small way to the social and economic growth of their homeland through the money they remit home.
The Brazilian diaspora is large. 1.5 million Brazilians live and work abroad, and remit money home to Brazil regularly. Most of the recipients are the family members of overseas Brazilians; an indication of the strong ties to their homeland that many overseas Brazilians still retain.
Brazilian Economy: Brazil Remittances InfoGraphic
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