A new report by the International Labour Organization (ILO) says Brazil’s innovative income-led strategy led to a faster than expected recovery from the financial crisis, with employment creation returning to positive territory as early as February 2009 – even before economic growth resumed.
What’s more, the report says carefully conceived employment and social policies, which were implemented in parallel with supporting macroeconomic policies, meant the recession lasted only two quarters.
The study – titled “Brazil: An innovative income-led strategy” – shows Brazil created over 3 million formal jobs over the past two years and reached an economic growth of more than 7 per cent in 2010, thus returning to pre-crisis levels. Most importantly, economic and employment growth have not been achieved at the expense of equity. Quite the contrary: informality and income inequality have declined in spite of the crisis.
According to the study, published by the International Institute for Labour Studies (IILS) and undertaken in conjunction with the ILO office in Brasilia, Brazil’s success was due to its favourable pre-crisis economic condition, a quick job-centred response, and the right mix between social, labour and macroeconomic policies.