Author | Editor: Kuznar, E. (NSI, Inc.)
Three datasets on wealth and status distribution in Brazil were analyzed: 2015 World Bank centile estimates of income, and International Labor Organization (ILO) income by occupation data for the years 2017 and 2012.
According to all three datasets, Brazil’s population is highly risk acceptant. The data provided by the World Bank examines risk sensitivity based on income, while the datasets taken from ILO examine risk sensitivity by occupation. Both methodologies show that the highest earners and the highest earning occupations are the most risk acceptant.
Significance for Risk Taking and Stability
Brazil is fairly average when compared to other countries that were measured for political stability by the Fragile States Index. However, its population is highly acceptant of risk with a mean Arrow-Pratt score of -5.68, placing it in the 94th percentile of the study. Despite a drastic decrease in Brazil’s income inequality during the last decade, coupled with numerous affirmative action plans put in place for racial and ethnic minorities, its black and female populations still suffer from a disproportionate amount of discrimination (Loveman, 2012; Ystanes, 2018). As one measure of social unrest, Brazil’s homicide rate is in the top 10% of countries; homicide and risk acceptance are strongly correlated (Daly, 2016; Kuznar, 2019b).
Implications for US Interests
The US sees Brazil as a crucial centerpiece of Latin America’s geopolitical structure and stability. Despite this, the US has weak economic interests in Brazil when compared to other larger countries with which the US has bilateral trade (OEC, 2017). The potentially anti-Chinese administration lead by President Jair Bolsonaro could prove to be a valuable regional ally for the US (Santibanes, 2018). Brazil’s risk acceptant population gives the US an opportunity to grow its political clout and economic engagement given that it can provide Brazil’s citizens with a clear path for economic improvement by enhancing opportunities for its ambitious population. If growth does not meet the population’s ambitions, then their frustrations may manifest in social unrest and increased illicit activity as people seek other avenues for improvement.
Implications for China’s Interests
China possesses strong economic and political interests in Brazil, and it has funneled large amounts of foreign direct investment (FDI) from Chinese companies. Both China and Brazil are members of the BRICS association that is designed to foster increased political connectiveness between leadership of its five member states. This joint membership, as well as China’s involvement with other regional organizations, affords Brazil multiple platforms to interact with China in a political capacity (Ellis, 2017). Despite these available avenues the recent election of President Jair Bolsonaro poses several concerns for Beijing over the security of its investments, given Bolsonaro’s anti-Chinese rhetoric. Brazil’s risk acceptant population gives China an opportunity much in the same way it gives the US, making it available for influence as long as its population sees it can benefit from outside Chinese influence.
Implications for Russia’s Interests
Russia sees the recent elections in Brazil and other Latin American countries as opportunities to expand its influence and leverage within Latin America (Gurganus, 2018). The risk acceptant nature of Brazil’s population leaves it open to influence if Russia can provide support to the government and its population. In order to present itself as a viable political and trade partner, Russia has used arms deals, energy initiatives, and propaganda disseminated through media to gain favor with state actors and harm the United States’ influence at the same time. Russia is also a member of the BRICS association (Ellis, 2017).