by Andrew Downie,freelance journalist working for The New York Times and Time magazine

Valdenor Freitas left the impoverished state of Ceará to come to the bright lights of Brazil’s capital São Paulo 21 years ago with one goal: to make enough money to buy land and cows.

"I saw other people drinking milk and I wanted to drink milk," says the friendly 38-year-old.

Life was tough in São Paulo. He spent months sleeping on a friend’s floor and eating cold pizza, desperate to go home but without money for the bus fare.

Today however, Valdenor Freitas’s life is vastly different. He has a busy little bar on the outskirts of the city and will open a small supermarket in October. When he does make the 3,000 km trip home, he flies.

His 20-year transformation from humble waiter to successful small businessman is emblematic of Brazil’s change during the same period. It used to be said that Brazil was the country of the future, and always would be.

But only over the past decade have economic stability, progressive social policies and generous assistance programs given millions of people like Valdenor Freitas the chance to be part of that future.

"Poor people have in their houses the same things that rich people have," he says as he stands at the counter of his bar. "I never dreamt of having a car, it was so difficult to even think of that happening. I struggled just to pay my rent. But over the last few years all sorts of doors have opened."

"Over the past eight years, Brazil has cut the percentage of people living in extreme poverty from 12 per cent to 4.8 per cent."

Over the past eight years, Brazil has cut the percentage of people living in extreme poverty from 12 per cent to 4.8 per cent. Some 36 million people rose into the so-called middle class. The notoriously wide gap between rich and poor closed at a faster rate than ever before.

According to Social Development Minister Tereza Campello, "It has only become possible to reduce inequality and poverty in Brazil in recent years, when the government introduced actions that combine economic growth with social inclusion, such as increasing employment, enhancing the minimum wage, expanding social programs and increasing access to credit".

Welfare lifts economy

A major reason for Brazil’s economic gains is that the poor now have money to spend. Some 52 million people benefit from the Bolsa Familia program, a small monthly stipend given to mothers who keep their kids in school and have regular health checks-ups. It is money into the pockets of people who didn’t have it before.

"The manufacturing and retail business thanked us," says Luiz Inacio Lula da Silva (Lula), the former Brazilian president who expanded the Bolsa Familia program. "Eighty per cent of these families bought refrigerators, 73 per cent bought TV sets and 45 per cent bought stereo systems and other electrical appliances. The industry sold much more, increasing job creation and improving the workers’ income."

"That trickle-up effect boosted the whole economy and Brazil’s banks loosened the purse strings and started lending."

That trickle-up effect boosted the whole economy and Brazil’s niggardly banks loosened the purse strings and started lending.

Valdenor Freitas received his first loan of 1,000 reais (A$549) in 2008. The monthly interest rate of 2.95 per cent is abusive by world standards - Brazil has the highest interest rates in the world, with the average annual credit card rate topping 238 per cent - but it was reasonable for Brazil and affordable to him.

With his first loan he bought a freezer, food and drink for his bar. After paying that off, he borrowed more and expanded more. Business was and remains good in Brazil’s boom.

"It’s a great system," he says. "You get the loan, you buy your merchandise, you sell it and then pay the loan back. All of us are contributing, aren’t we? You buy sweets and you are contributing to the country’s growth."

Valdenor Freitas’s neighbourhood is also indicative of Brazil’s progress. Stuck on the gritty outskirts of São Paulo, it is far from the glass towers of the financial district and the cosmopolitan chic of downtown.

"The justice system is slow, inefficient and works infinitely better for those who have the cash to hire good lawyers."

When he arrived here, the streets were unpaved and an open sewer ran past the front door. Now some of the roads are asphalt and the sewer is gone. Locals get their electricity from proper sources rather than stealing it from passing wires and there are phone lines and public transport.

Not quite ready

Nevertheless, there is still much to do and Brazilians need to guard against complacency. Too many Brazilians, Lula included, think the hard work has been done.

The celebration that half the population is now middle class is a prime example. Brazil’s definition of middle class is a household that earns between roughly R$1,200 and R$5,174 a month. The lower threshold is a pitiful amount and a more appropriate term would be 'working poor'.

But Brazilians do not complain. They have money to spend and politicians who rule for them as well as the rich elite.

Yet those same politicians have failed to tackle the basic infrastructure problems that could help the lowest sectors of society. Murders are down but robberies and assaults are up. The average Brazilian is fearful on unlit and unpoliced streets.

The justice system is slow, inefficient and works infinitely better for those who have the cash to hire good lawyers. Jails and hospitals are overcrowded and the health system is in need of overhaul.

Corruption remains a major blight and an antiquated tax system means that not only do Brazilians pay more taxes than in any other developing country but the poor bear the heaviest burden.

"The old problems weren’t solved and new problems have been created because of this economic growth."

by Andressa Caldas, Global Justice

Worst of all is the education system, skewed to help those with the means to pay. Brazilian students finished at or near the bottom of successive international tests, with those in state-run schools well below those in private education. The university system has expanded but largely to the benefit of elite students.

"There is no major investment in education, justice, culture," says Andressa Caldas, executive director of Rio-based human rights group Global Justice. "The old problems weren’t solved and new problems have been created because of this economic growth."

Neither Lula nor his hand-picked successor, former activist and political prisoner Dilma Rousseff, have fully addressed these issues, preferring to concentrate instead on wealth distribution.

And right now that’s fine for people like Valdenor Freitas. He has money in his pocket and a booming little business. He even bought those cows he so desperately wanted. In a country that lives for today, that’s fine to be going on with.

Andrew Downie was born in Scotland but has lived in Brazil for 12 years. He is a freelance journalist working for publications including The New York Times and Time magazine