Brazil’s governing party at the federal level, the Worker’s Party, has long trumpeted the economic gains of the poor in the last decade. Oft-cited statistics show that 28 million Brazilians emerged from poverty and 36 million become formally considered part of the middle class (a closer look at these stats and other statements by the government here will be a project for another day, though it’s undeniable that many millions of Brazilians have joined the consumer class). Much of the gains have been attributed to the success of conditional welfare programs that started in the 1990s and were rebranded and ramped up in the last decade. These gains were major reasons for Lula’s incredibly high popularity ratings as he left office in 2010.
So if it’s worked pretty well so far, why not add some more? Yesterday, Brazil’s Federal Government launched a new program entitled “Brazil Without Misery”, the stated intent of which is to eliminate extreme poverty in the country, defined as people living on under R$70 per month (16.2 million Brazilians, according to the most recent census). To accomplish this, the program is to be allotted an annual budget of R$20 billion, though this figure includes R$16.5 billion that was already going to be spent on Bolsa Família anyway. So what exactly is new about the proposal?
The extra money will, in large part, go towards reaching more people. Bolsa Família currently serves 12.9 million people. If there are 16.2 million people living in extreme poverty, then there are millions of people that qualify for Bolsa Família but are not receiving it, and getting them on the payroll means expenses on actively finding and registering the additional families that have been picked up in census data but not in the Bolsa Família. Payouts will also be increased, in part because families will be able to receive payment for up to five children, when previously the limit was three, which alone is expected to increase coverage by 1.3 million people.
In addition to payouts, Brazil Without Misery includes payments to families that participate in environmental activities and technical training in areas like recycling, as well as a program to build cisterns to help meet basic water needs for thousands of rural families.
Finally, the package includes programs to incentivize small farmers. Though agrobusiness is booming in Brazil, small farmers in the Northeast have been in stagnation or decline relative to the rest of Brazil. The program for small farmers includes low-interest loans and the implantation of technical teams to help farmers increase yields and get their products to market, as well as a program in which the government preferentially purchases the produce of small farmers (to be distributed in hospitals, schools, and the like).
All of this is packaged on the program’s web site by the Federal Government along with a few key propaganda points: that welfare is not just handouts, but a way to increase consumption and thus develop the internal market; the government is a friend to the little people, the Northeasterner, the farmer; “Brazil grew because poverty was reduced” (rather than the other way around…).
So will it actually eliminate extreme poverty? But it’s notable that the investment in the program is already bigger than the gap the government is trying to close – R$20 billion per year for 16.2 million people comes to R$103 per person per month. Simply passing that amount on with administrative costs of one-third or less than the total would allow Brazil, on paper, to say there was no more extreme poverty in the country. And note that this is assuming that the average monthly salary for everyone considered extremely poor (that is, with a monthly salary of less than R$70) is R$0, when for all I know it is R$65. The project also expects to see additional spending from state governments. From that point of view, the short-term prospects for at least a huge propaganda victory seem pretty positive.
A more long-term question would be, will the attempts to invest in the productivity of the extremely poor work? Here I’m a bit more skeptical. There must be hundreds of programs that involve petty recycling of plastic bottles in Brazil, and though a surprising number of people make their living from this, it seems dismaying that there isn’t a more promising career for the extremely poor to train for. I also don’t know whether the small rural farmer in the dry northeast is better off doubling down on his investment with government subsidies, or if this is an unviable activity that is going to disappear anyway in coming generations.
Brazil desperately needs better education, but this is a generational battle, and there is almost no realistic chance for Brazil to provide a meaningful opportunity for most of today’s extremely poor.
I have no idea whether the plan will really work, but I look forward to seeing what happens. More on this later as things develop.
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