Modern Brazil by Anthony W. Pereira

Author:Anthony W. Pereira [Pereira, Anthony W.]
Language: eng
Format: epub
ISBN: 9780192540133
Publisher: OUP Oxford
Published: 2020-07-11T00:00:00+00:00

Growth with social inclusion

In 1994 the Real Plan stabilized the Brazilian economy and brought to an end years of chronic inflation. Annual price increases dropped to a low single figure and Fernando Henrique Cardoso, who had been the Finance Minister when the Plan was carried out, won the presidency. In his two terms in office from 1995 to 2002 Cardoso maintained price stability and also increased social spending, beginning a process that gradually began to reduce poverty. This safety net was expanded in the 2000s under the presidency of Cardoso’s successor, Lula (2003–10).

Perhaps no programme epitomizes the Lula administration’s commitment to social inclusion as much as the Family Allowance (Programa Bolsa Família or PBF), one of the largest conditional cash transfer programmes in the world. The result of a fusion and expansion of existing programmes and begun in 2003 in the first year of Lula’s presidency, the Family Allowance now includes roughly 14 million families comprising 49.6 million people, or 26 per cent of Brazil’s population. The programme reaches beneficiaries in 99.7 per cent of the 5,570 counties (municípios) of Brazil. Like other conditional cash transfer programmes (CCTs), the Family Allowance involves a cash transfer, a targeting mechanism, and conditionality. Payments are made on the basis of a vast database called the Cadastro Único para Programas Sociais (CadÚnico) or the single registry for social programmes. CadÚnico contains data on 23 million low-income families.

Families are eligible for the PBF if their income falls below a certain threshold. Payments vary depending on family profiles. Average payments are modest and despite the vast scale of the programme, it costs only about 0.5 per cent of GDP. This amounts to less than 3 per cent of total social spending in Brazil or one-tenth of the money spent every year servicing the government’s debt.

The conditionality of the Family Allowance concerns schooling and health. Beneficiary families must keep their children aged 6 to 15 in school for 85 per cent of the annual school days (this drops to 75 per cent for those aged 16–17). They must also get their children younger than 7 the inoculations required by the national immunization schedule and allow the growth and development of their children to be monitored by professionals in the national health service. Pregnant women and nursing mothers aged 14 to 44 who are beneficiaries of the Family Allowance also have to agree to periodic monitoring by a health care professional.

The creation of the Family Allowance programme was part of an extraordinary period of growth with inclusion in Brazil. From 2003 to 2011, Brazilian per capita income increased 40 per cent while income inequality fell by almost 10 per cent. The incomes of the bottom decile rose much faster than the incomes of the top decile. The poverty rate fell from 37.13 per cent in 2003 to 21.42 per cent in 2009. In absolute terms, from 2001 to 2007, the population living in extreme poverty (with monthly per capita income below R$70, or roughly US$16) fell by 11

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