In January, the Financial Times published an article accusing the Brazilian government of “mismanaging the economy”. A good part of the article, which spoke of sluggish growth and growing prices and all the jargon that is well liked by the City of London, was spent on slamming the “populist welfare programmes of the leftist government”. As soon as the article appeared on FT’s website, Sao Paulo mayor Fernando Haddad, a leader of the Workers Party, trashed the report, saying the Brazilian officials “knew what they were doing.”
A few months earlier, the Economist, the mouthpiece of the City, had ran a story with an audacious headline that asked Brazil’s President Dilma Rousseff to fire her finance minister Guido Mantega for “mismanaging the economy”. Mantega was not rattled. “We know this game,” he had said. “We are not going to change our economic policies because of such articles.”
If two of London’s most influential newspapers had raised serious doubts about economic policies of Indian government and attacked it with such acerbic language, a sense of panic would have gripped South Block. But nothing of the sorts happened in Brasilia.
Far from it.
Last October, on the 10th anniversary of Bolsa Familia (Family Grant) programme that has lifted 50 million people out of poverty and inspired policies in more than 20 countries including India, Brazilian President Dilma Rousseff vowed to continue the direct cash transfer scheme “as long as there is poverty in Brazil”. Her target: the 2.3 million people who remain trapped in poverty. Rousseff, who would seek re-election in October, has pledged to “eradicate poverty” through the scheme that was first launched under President Lula da Silva in 2002. The programme, which provides 25 billion Brazilian reals (US$12 billion) to 14 million families, has changed the face of the country.
Stunning results
According to the United Nations, 6.5% of Brazilians were living on just a dollar a day in 2000. By 2009, that proportion was reduced by half. Though touted as a direct cash transfer scheme, the Bolsa Familia has created a net of financial assistance, health and education facilities. To get on the programme, a family’s children must be in school and get vaccinated against diseases. “One of the best effects of the programme is that child mortality is down by 60%,” said Prof Walquiria Rego, a political scientist whose book Voices of Bolsa Familia has tracked the life of beneficiaries of this programme.
“Earlier, children in the age group of 0-5 years were dying of hunger. Also they are attending school. So, the programme has taken care of hunger, health and primary education.”
When it started, the average amount given to poor families was 73 reals ($32) per person and it reached just three million households. In 10 years, the assistance has gone up to 152 reals ($67) per person and it covers 15 million families. Prof Rego, who travelled widely for her book, believes the programme has helped the poor put food on the table, money in the bank and their children in school.
With its economy booming, finding money for social welfare was not a problem for Brazil. The real challenge was to make sure the money reached the intended beneficiaries, without any leakage. Some direct cash transfer programmes have existed in the country since 1995, when local governments began giving money directly to the poor. But since Bolsa Familia was more ambitious in its reach, the government began with creating a single unified registry of the poorest in the country. Once that was done, a system was put in place to transfer the cash efficiently through ATM cards issued by Caixa Economica Federal, the government-owned savings bank that runs several social programmes. This card is the poor’s ticket out of poverty.
To make sure that the money given to families is used properly, the card is given preferentially to a female head of household which she can use like a debit card in more than 14,000 Caixa ATMs across the country.
Some learnings
India may have to learn a few more lessons from Brazil’s anti-poverty initiatives, which are not restricted to doling out cash. In 2011, President Rousseff launched a big plan named “Brasil without poverty” to lift 16.2 million Brazilians out of extreme poverty through increased access to education, health, sanitation, electricity and productive inclusion in addition to direct cash transfer. The single registry of poor (Brazilian equivalent of UID), maintained for the Bolsa Familia plan by the Caixa, is also used by other ministries to provide subsidies and services to the poor.
Despite making such social impact, both Bolsa Familia and Brasil Sem Miseria (Brazil without Poverty) have been in the crosshairs of western, and local corporate media for quite some time. The schemes have been criticised as wasteful expenditure on lazy people who do not want to work. It has also been attacked for being a dole that doesn’t create assets and jobs. Some economists have called it a scheme that "gives the fish, but does not teach how to catch the fish". Similar criticisms have greeted social welfare plans in India. But nothing can be farther from the truth.
According to the latest figures released by the Brazilian government, more than 75.4% of the beneficiaries of the Bolsa Familia work and more than 350,000 of them have already become individual micro-entrepreneurs. Under the Brazil without Poverty plan, which also provides technical training to the poorest people who receive monthly assistance from the government, more than 1.1 million people have enrolled for training. Just in the first half of 2014, say the government figures, the beneficiaries were offered more than 760,000 new jobs. To date, 560 professional courses are offered free in 3,631 municipalities across the country. The participants also receive food, transportation and school supplies.
Increasing opportunities
“The Bolsa Família beneficiaries are not poor because they are lazy or not knowing how to work,” said Brazil’s Minister of Social Development and Fight Against Hunger, Tereza Campello. “They are poor by lack of opportunities for education and poor health. How can they compete with these disadvantages? To give people money to survive, we have included rights of a citizen in a consumer society.”
In its 10 years, Bolsa Familia has won two major international awards, inspired similar schemes in dozens of countries and has been researched by more than 70 countries. It has managed to take one-fourth of the Brazilian population out of poverty. It has not only given them fish but also taught how to catch it. And it has given Brazil confidence to ignore the cribbing by megaphones of global finance.
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A few months earlier, the Economist, the mouthpiece of the City, had ran a story with an audacious headline that asked Brazil’s President Dilma Rousseff to fire her finance minister Guido Mantega for “mismanaging the economy”. Mantega was not rattled. “We know this game,” he had said. “We are not going to change our economic policies because of such articles.”
If two of London’s most influential newspapers had raised serious doubts about economic policies of Indian government and attacked it with such acerbic language, a sense of panic would have gripped South Block. But nothing of the sorts happened in Brasilia.
Far from it.
Last October, on the 10th anniversary of Bolsa Familia (Family Grant) programme that has lifted 50 million people out of poverty and inspired policies in more than 20 countries including India, Brazilian President Dilma Rousseff vowed to continue the direct cash transfer scheme “as long as there is poverty in Brazil”. Her target: the 2.3 million people who remain trapped in poverty. Rousseff, who would seek re-election in October, has pledged to “eradicate poverty” through the scheme that was first launched under President Lula da Silva in 2002. The programme, which provides 25 billion Brazilian reals (US$12 billion) to 14 million families, has changed the face of the country.
Stunning results
According to the United Nations, 6.5% of Brazilians were living on just a dollar a day in 2000. By 2009, that proportion was reduced by half. Though touted as a direct cash transfer scheme, the Bolsa Familia has created a net of financial assistance, health and education facilities. To get on the programme, a family’s children must be in school and get vaccinated against diseases. “One of the best effects of the programme is that child mortality is down by 60%,” said Prof Walquiria Rego, a political scientist whose book Voices of Bolsa Familia has tracked the life of beneficiaries of this programme.
“Earlier, children in the age group of 0-5 years were dying of hunger. Also they are attending school. So, the programme has taken care of hunger, health and primary education.”
When it started, the average amount given to poor families was 73 reals ($32) per person and it reached just three million households. In 10 years, the assistance has gone up to 152 reals ($67) per person and it covers 15 million families. Prof Rego, who travelled widely for her book, believes the programme has helped the poor put food on the table, money in the bank and their children in school.
With its economy booming, finding money for social welfare was not a problem for Brazil. The real challenge was to make sure the money reached the intended beneficiaries, without any leakage. Some direct cash transfer programmes have existed in the country since 1995, when local governments began giving money directly to the poor. But since Bolsa Familia was more ambitious in its reach, the government began with creating a single unified registry of the poorest in the country. Once that was done, a system was put in place to transfer the cash efficiently through ATM cards issued by Caixa Economica Federal, the government-owned savings bank that runs several social programmes. This card is the poor’s ticket out of poverty.
To make sure that the money given to families is used properly, the card is given preferentially to a female head of household which she can use like a debit card in more than 14,000 Caixa ATMs across the country.
Some learnings
India may have to learn a few more lessons from Brazil’s anti-poverty initiatives, which are not restricted to doling out cash. In 2011, President Rousseff launched a big plan named “Brasil without poverty” to lift 16.2 million Brazilians out of extreme poverty through increased access to education, health, sanitation, electricity and productive inclusion in addition to direct cash transfer. The single registry of poor (Brazilian equivalent of UID), maintained for the Bolsa Familia plan by the Caixa, is also used by other ministries to provide subsidies and services to the poor.
Despite making such social impact, both Bolsa Familia and Brasil Sem Miseria (Brazil without Poverty) have been in the crosshairs of western, and local corporate media for quite some time. The schemes have been criticised as wasteful expenditure on lazy people who do not want to work. It has also been attacked for being a dole that doesn’t create assets and jobs. Some economists have called it a scheme that "gives the fish, but does not teach how to catch the fish". Similar criticisms have greeted social welfare plans in India. But nothing can be farther from the truth.
According to the latest figures released by the Brazilian government, more than 75.4% of the beneficiaries of the Bolsa Familia work and more than 350,000 of them have already become individual micro-entrepreneurs. Under the Brazil without Poverty plan, which also provides technical training to the poorest people who receive monthly assistance from the government, more than 1.1 million people have enrolled for training. Just in the first half of 2014, say the government figures, the beneficiaries were offered more than 760,000 new jobs. To date, 560 professional courses are offered free in 3,631 municipalities across the country. The participants also receive food, transportation and school supplies.
Increasing opportunities
“The Bolsa Família beneficiaries are not poor because they are lazy or not knowing how to work,” said Brazil’s Minister of Social Development and Fight Against Hunger, Tereza Campello. “They are poor by lack of opportunities for education and poor health. How can they compete with these disadvantages? To give people money to survive, we have included rights of a citizen in a consumer society.”
In its 10 years, Bolsa Familia has won two major international awards, inspired similar schemes in dozens of countries and has been researched by more than 70 countries. It has managed to take one-fourth of the Brazilian population out of poverty. It has not only given them fish but also taught how to catch it. And it has given Brazil confidence to ignore the cribbing by megaphones of global finance.