TFF Associates & Themes Blog

By Jonathan Power

“Brazil has a great future, and always will”, said Charles de Gaulle, the president of France in the 1960s. In truth it is not difficult to be cynical about Brazil. It is a large land of both great potential and many lost opportunities- and yet whenever I visit it, as I have regularly over 40 years, I find the positive changes are immense.

In my time I have seen growth rates year after year of 10% or more. I have seen the transformation of favelas- shanty towns- into solid working class housing. I have seen infant mortality rates plummet. (To capture the flavor of the lives of the poor a must read is the new top prize-winning novel, “Quarenta Dias” (Forty Days), written by Valeria Rezende, a nun.) And under Brazil’s last president, Luiz Inacio “Lula” da Silva, leader of the Workers’ Party I have seen the almost unbelievable- capitalist economic progress and socialist social progress storming ahead hand in hand.

Right now Brazil is in the middle of the kind of economic crisis profligacy, bad economic management, a sudden loss of export markets for its commodities and inflation have brought a number of times before. But this is perhaps the worse fall in economic progress since the 1930s. To compound Brazil’s problems is the Zika virus, which is spreading at a fast rate.

Under the presidency of Lula’s hand-picked successor, Dilma Rousseff, a former political prisoner under the military junta of the 1970s, the economy has gone to pot. At the same time Brazil has been hit by a massive scandal- corruption in the state oil company, Petrobas. It clearly has involved some high-echelon Workers’ Party functionaries. Some are saying the president too is involved but there is no hard evidence that she was.

Despite all she has maintained Lula’s social programs. For example, her government has installed 670,000 water tanks across the country. But she may not be able to do that kind of thing much longer.

The centre piece of Lula’s social revolution was the Bolsa Familia, begun in 2003, a family support scheme that costs only 0.5% of the national income but has helped lift 36 million Brazilians out of poverty. The World Bank reckons that Brazil has cut “chronic poverty” by three-quarters from 2004 to 2012, to just 1.6% of the population.

mLula’s genius was to avoid the top-heavy social programs of countries like India and Egypt and use a market-friendly way to attack poverty. Rather that provide the poor with goods or services it simply handed out cash and let the families decide how to spend it- but on one condition- they kept the children in school. Other countries with social programs and the economists from aid agencies like the World Bank thought that this was dangerous and wrong-headed. The poor would spend the money on drink and fiestas.

In fact poor families spent the cash well, not least because the money went directly into the hands of mothers not fathers. It was also a condition of the hand-out that mothers got their children to be vaccinated, that both mother and children went for regular medical checkups, that pregnant women went for prenatal care and that they breast-fed their infants. (No commercially-pushed baby food for them- a ploy that has led to countless child deaths in developing countries.)

If a family was found disobeying these conditions there were penalties. First a warning. Then if the falling short continued benefits would be suspended. If the families continued to ignore the conditions they would be thrown out of the program.

It wasn’t all easy sailing. The media reported misuse of the program by undeserving recipients. The monitoring was not well done. Lula responded by throwing out Workers’ Party people from their supervisory positions and brought in at the top highly trained technocrats. In 2005 Bolsa Familia was centralized and streamlined under the new Ministry of Social Development and Fight Against Hunger. Thanks to increased monitoring and vigilance half a million ineligible recipients were cut from the rolls.

Given the results Bolsa Familia was cheap and the country applauded it, both on the left and the right. Today it reaches about 55 million Brazilians. By most people’s standards the payments (which vary according to family size and income) are small. The average family receives about 65 US dollars a month. A large family can get 200 dollars.

“The miserable have become consumers”, Lula boasted. They have doubled their incomes and have also improved their health and educated their children.

The country’s overall income gap between the poor and the well-to-do has been reduced by a third. Right now, as the rate of economic growth plunges, it has provided a cushion for the poor.

Over 60 countries have sent experts to study how Bolsa Familia functions. Brazil has seen the future, and it works.

Copyright: Jonathan Power