Last month during the 2013 Confederations Cup in Brazil — a test run ahead of next summer’s World Cup — more than a million of Brazilians took to the streets to protest crime, corruption, failing public schools and hospitals, and high and rising prices.
High prices may be the most critical factor in Brazilian unrest, according to Simon Romero of the New York Times.
Romero offers several striking examples:
- A Samsung Galaxy S4 phone that costs $615 in the U.S. is nearly double that in Brazil.
- “… a resident of São Paulo, Brazil’s financial capital, has to work an average of 106 hours to buy an iPhone.”
- A crib for a baby at Tok & Stok in Brazil costs over $440, “more than six times the price of a similarly made item at Ikea” in the U.S.
- A cheese pizza? $30, according to Romero.
- “To buy a Big Mac, a resident here has to work 39 minutes, compared with 11 minutes for a resident of Chicago.”
And its been going on for years. In September 2011 we provided some examples:
- If you pick up an international newspaper in Manhattan, it will set you back $2.50. The same paper in Rio costs $9.59.
- In the U.S., you’d spend around $21,000 on a new Volkswagen Golf. An equivalent car in Brazil would cost $27,000.
- A gallon of mid-grade gas in the U.S. costs around $3.30. In Brazil it’s $6.65.
- A luxury, two-bedroom apartment in São Paulo costs $2,397 per month. A comparable apartment in Miami costs $2,000.
- In the U.S., a summer dress at a chain store like H&M costs around $38. A similar dress from an equivalent Brazilian chain will cost $76.
- A basic hamburger in the U.S. costs around $5.50; in Brazil it’s a whopping $8.99.
Romero writes that the stunningly high pricing can be largely attributed to “a dysfunctional tax system that prioritizes consumption taxes, which are relatively easy to collect, over income taxes.”
Even as Brazil benefits from a decade of steady economic growth fuelled by booming commodity exports and a consumer binge that lifted 35 million Brazilians from poverty, the new middle classes — not to mention the poor — are being squeezed by the high cost of basic goods and services.
“Brazil is on the verge of recession now that the commodities boom is over,” Luciano Sobral, an economist and a partner in a São Paulo told The Times. “This is making it impossible to ignore the high prices which plague Brazilians, especially those who cannot easily afford to travel abroad for buying sprees where things are cheaper.”
If that is true, the public protests will be even bigger during the 2014 World Cup across the country and the 2016 Olympics in Rio.
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