Equity for Sustained Growth

Abstract

Starting from the aggregate, this report first describes how Pernambuco has fared with respect to the rest of Brazil, both in terms of economic and social welfare performance, over the last decade (2001-2012). In a context of widespread economic growth, Pernambuco has done particularly well in recent years, similar to or above the national average. A key challenge concerns the longer-term, where – notwithstanding the positive performance of recent years-the same level of growth may not be as easily sustained. The solid economic performance has been reflected in an improvement of social indicators, also associated with the governments interiorizacao strategy, a policy developed explicitly to increase the coverage of public services in underserved areas, with a focus on the interior of the state. The decline in poverty rates displays a trajectory towards convergence with Brazil and recently, a faster than national decline of the Gini has brought Pernambucos income inequality below the national and Northeast level.