Skip to main content

Economic Situation: Equality

Question for Foreign, Commonwealth and Development Office

UIN HL4892, tabled on 13 December 2021

To ask Her Majesty's Government what assessment they have made of the policies of (1) Brazil, (2) France, (3) Denmark, and (4) Bolivia, towards reducing economic inequalities; and what steps they plan to take on the basis of such assessment.

Answered on

16 December 2021

The UK monitors the economic situation in many countries around the world, including economic inequalities, and related policy measures.

Notwithstanding recent gains, Brazil has one of the world's most unequal income distributions as measured by the Gini index. Since its creation in 2003, Brazil's largest welfare cash-transfer programme, Bolsa Familia, has lifted 3.4 million people out of extreme poverty, and brought 3.2 million above the poverty line. During the pandemic, the Brazilian Government spent approximately 4% of GDP to reach almost 70 million vulnerable citizens with direct cash transfers. It now aims to reform and expand Bolsa Familia. A UK-World Bank project is assessing how emergency aid was provided, and how social protection responses can be improved.

The UK and France work closely across the G7, UN, and elsewhere, to reduce economic inequality around the world. In their bilateral meeting on 12 December, the Foreign Secretary agreed with French Foreign Minister Le Drian on the importance of deepening economic ties with allies, and working together to boost economic growth in low-] and middle-income countries. As likeminded partners, the UK and Denmark also regularly share best practice on issues of shared interest. The UK recognises Denmark's fiscal equalisation mechanism, which helps reduce economic inequalities between regions.

Bolivia has made significant gains on inequality in the past 20 years, with its Gini index dropping from 61.6 to 41.6. This was in large part due to a commodities boom, which allowed the Government fiscal space to initiate cash transfers to the poorest in society, and increase investment in public infrastructure. The middle class doubled between 2007 and 2017 (from 13.4% to 28.3% of the population), and the poverty rate fell from 64.5% to 39.3%. The UK continues to work with the Bolivian Government on a range of areas, including trade, investment, and tourism.