Brazil is experiencing an economic boom. Photo: adam79 (flickr)

While much of the world fights off fears of recession and economic stagnation, Brazil is having an economic boom. Its steady growth rate has boosted production and has made Brazil a major player in world trade.

Brazil owes much of its new fortunes to its two burgeoning industries of oil and ethanol. Oil was recently discovered off the coast of Rio de Janeiro, which is estimated to hold between 5 to 8 billion barrels. With this discovery, foreign investment has been flooding into the country as companies try to develop this profitable resource.

Brazil is also experiencing windfall profits in agriculture, specifically ethanol. In recent months, ethanol has been gaining in popularity as an alternative fuel because of the rising cost of oil. Brazil, as the world’s largest exporter of ethanol, has greatly benefited from this rapid increase in demand.

Brazil has always been known as a country with a wide gap between the very rich and very poor. In 2004, the bottom 10 percent of the population received only 0.9 percent of the national income while the top 10 percent received 44.8 percent, according to UNDP figures. A surprising and encouraging result of this economic boom is that the gap is finally growing smaller. From 2001, Brazil's income inequality gap has shrunk 6 percentage points as more people moved up into the growing middle class. As well, the bottom 10 percent of Brazil’s population had a 58-percent increase in their incomes.

The government has played a major role in creating this upward social mobility in Brazil. They have used Brazil’s growing wealth to increase funding for many social programs for the poor. One very popular program is the Bolsa Familia program that gives small subsidies to help the poor buy food and other necessities. Millions of people have used this program to help lift themselves out of poverty and destitution. Once they are on a stable financial footing, many Brazilians have then applied for a microloan to start some type of business so that they can have a good income in Brazil's expanding formal economy.

These programs have been very successful in improving Brazil’s entire society. From 2004-2006 the number of people under the poverty line — earning less than $80 a month — decreased by 32 percent.

These statistics, at least, suggest that more and more Brazilians are able to climb out of poverty.