Brazil is the largest country in Latin America and it’s the ninth largest economy in the world. Despite its vast natural resources and economic wealth, Brazil has an extremely high percentage of people living below the poverty line, even in comparison to other Latin American countries. Brazil also stands out for its sharp regional and social disparities. This poverty and inequality have their roots in the country's past but their more immediate causes can be found in the process of development based on the replacement of imports carried out by the State between the 1940s and the 1970s; in the crisis of that development pattern; in the failed attempts at economic adjustment; and in the consequences - still incipient - of the economic restructuring process imposed by globalization. The recent phase of globalization which occurred in the early 1990s has drawn increasing attention to the puzzling developments. This decade represented a turning-point in the country’s economic history, for the previous four decades a closed economy with strong presence of the State interventionism as an economic development strategy. Trade liberalization affects economic growth and trade through their mutually contradictory effects on investment and exchange rate. This made the economy extremely vulnerable to fluctuations in capital flows, and has significant effects on manufacturing employment and wages. It has had, and will continue to have a profound effect on certain divisions within the workforce and certain social groups. The resulting social problem will also have negative impacts on the development and stability of Brazil. Brazil still has a long way to go in reversing the widening socioeconomic inequities between rich and poor. Poverty is recognized as a complex social and economic phenomenon, the dimensions and determinants of which are various. The reduction in poverty requires some combination of economic growth and reduction in inequality and none of them can be dispensed. Income inequality in Brazil still remains high by international standards and is rooted in structural causes, such as inequality in educational attainment and land ownership. To achieve substantial improvements, Brazil must address these root causes of income inequality.