Social Security

The Ministry of Social Security, now separate from the Brazilian health system as discussed above, carries out the conventional mandate of ensuring old-age assistance. Until the 1940s, social security was limited to private plans organized by employers and employees. Over time, the components of the system became increasingly integrated and controlled by the federal government. More recently, health benefits and social security have become nearly universal, no longer depending on formal employment and contributions. Retirement and disability benefits are pegged to the official minimum wage. They weigh so heavily on government spending that they are one of the reasons the government resists raising the minimum wage for the active work force. At the same time, the middle class considers these benefits insufficient and, therefore, seeks private social security plans or makes investments in real estate, given the instability of financial markets in Brazil. The social security system will face even greater challenges as the age structure of the population changes, with a greater number of pensioners in relation to the number of contributing workers.

Sanitation and Public Utilities

The National Sanitation Plan (Plano Nacional de Saneamento--Planasa) of the 1970s did not keep pace with rapid urbanization in the development of safe drinking water supplies and waste disposal systems, particularly evident in the precarious metropolitan peripheries and favelas. Between 1988 and 1993, 87 percent had access to piped water and 72 percent to sewerage and waste disposal services, yet a 1989 study by the IBGE (Brazilian Geography and Statistics Institute) revealed that 92 percent of the municipalities did not treat domestic wastewater and only 27.6 percent of dwellings in a Northeast metropolis were linked to a sewerage system that passed quality standards.

The rural population receives far fewer water and sanitation services than its urban counterparts. Ninety-five percent of those in urban areas had adequate water supply during the 1988-93 period, as compared with 61 percent of rural dwellers; the levels for disposal systems were 84 percent and 32 percent, respectively (the rural figures refer to wells and privies, not service). To a certain extent, the urban-rural incongruity in the provision of environmental sanitation accounts for the higher percentage of deaths from diarrheal diseases in the rural North and Northeast than in the urban areas. The lack or deficiency of basic sanitation services has been associated with the persistence of diarrhea as well as outbreaks of contagious diseases, including cholera.

Housing

The National Housing Bank (Banco Nacional de Habitação--BNH) was established in the 1960s to finance public housing using funds from savings accounts and from the official employment guarantee system, known as the Severance Pay Fund (Fundo de Garantia do Tempo de Serviço--FGTS). Many thousands of basic houses (casas populares ) were built, usually in projects at the edges or outside of cities. Because of the financial constraints of working with a low-income clientele, the federal Housing Finance System (Sistema Financeiro de Habitação--SFH) has been used primarily to provide low-cost mortgages for houses and apartments for the middle class.

Many poor people, without access to financing, find it necessary to build their own houses. The favelas on the hills of Rio de Janeiro are one well-known type. In other parts of Brazil, shantytowns on stilts are built over water (alagados ), or in marshy areas (baixadas ). In 1991 there were 3,221 medium- to large-size favelas (each with more than fifty-one households), which contained 2.9 percent of the country's households. The largest favelas, such as Rocinha in Rio de Janeiro, are home to hundreds of thousands.

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Source: U.S. Library of Congress