TFF Associates & Themes Blog

By Jonathan Power

April 12th, 2016

If worst comes to worst and Brazil’s President Dilma Rousseff is deposed and her widely beloved predecessor, Luiz “Lula” da Silva, is discredited they will long be remembered for the “Bolsa Familia”. This is a government program that has cut Brazil’s once appalling poverty rate by half and reduced the number of poor very sharply to 3% of the population. It reaches 55 million people and 36 million have been lifted out of poverty. It has been such a winner that around sixty countries have sent their experts to study it. Indeed, it has been so successful politically that we shouldn’t be surprised that if Rousseff is felled by the shenanigans of Congress masses will go out on the street and riot.

Before the Bolsa Familia program was put into effect by Lula, Brazil had many welfare and food subsidy programs. Like in most developing countries the benefits didn’t reach the poor in the way that was intended. Middle men, black marketeers, corrupt officials and politicians skimmed and diverted much of them.

Bolsa Familia absorbed these into one direct cash payment. If you were a poor mother of a family- women were more trusted than men- you received an electronic card which you could slip into a bank cash dispenser and immediately get your monthly allowance, often doubling your cash income. There would be no intermediaries and no skims and no scams.

There were some conditions. Her children had to go to school, be immunized and have regular health check ups. She herself, if pregnant again, had to go to the maternity clinic. So not only were incomes being raised above the poverty line but infant and maternal mortality rates fell fast.

The income of the poorest 20% of Brazilians rose by 6.2% between 2002 and 2013, while that of the country’s richest 20% rose by only 2.6%. (In the US in the same time period the income of the richest 10% rose by 2.6% and that of the poorest 10% shrank by 8.6%.)

Innoculations reached 99% of the population. Deaths from malnutrition fell by 58%. Longevity steadily increased. Literacy became almost universal and education gave young people a better chance in life. The number of children forced to work instead of attending school dropped by 14%.

I’ve been out to the villages in the North East and seen with my own eyes the visible and dramatic improvements. I’ve been visiting the village of Piloezinhos for 40 years and now I’ve seen things that were never there before- a school, a pharmacist and an agricultural advisor. In homes I found flush toilets, refrigerators and washing machines- this was the kind of thing Bolsa Familia recipients wanted to spend their money on, as well as medicine and education.

Bolsa Familia met with a lot of stiff resistance at its onset. Some economists argued that the government should be investing in infrastructure. Conservatives warned about the dangers of welfare dependency. “The opposition said we were going to create an army of lazy people”, Lula told Jonathan Tepperman of Foreign Affairs.

Later, opponents had something of a field day when it was revealed that the sanctions for non-compliance by recipients were not being properly enforced. Too rapid expansion had meant, for example, that 55% of schools were not reporting if they had met their attendance quotas. Lula responded by setting up a new ministry to centralize over-sight of Bolsa Familia and he made sure it was staffed with experts. Some half million ineligible recipients were cut from its rolls.

It was to the good. Bolsa Familia became popular across the political spectrum. It helps that the program is so cheap. By the standards of the middle class the payments are tiny. The average family gets only 65 US dollars a month. It costs Brazil less than half a percent of the country’s 2.3 trillion dollars national income.

Brazil used to have the worst income distribution in the world, bar South Africa. Now the country’s overall income gap has been reduced by one third. Yet its popularity extends far outside those it is meant to help. Recent polls put its approval rating at around 75%.

Needless to say, a good deal of this progress was made possible by the rapid economic growth that was made in Lula’s time. Now, with the sharp drop in commodity prices, notably affecting exports to China, combined with poor economic decision-making, the economy has crashed. Unemployment is rising. Although Rousseff has expanded the reach of Bolsa Familia the number of poor is probably rising since unemployment is increasing by the day.

While she remains in power the commitment to extend and improve the reach of Bolsa Familia will remain intact. If she is deposed anti-poverty programs will no longer be a priority. This alone is a good enough reason to make sure she is not impeached.

Copyright: Jonathan Power.