Half of the Brazil Aid budget would end extreme poverty if resources were better used, says FGV

In an interview to CENARIUM, Marcelo Neri, director of FGV Social, says that Auxílio Brasil, formerly Bolsa Família, "took a step backwards" and "disregards poverty studies" (Marcello Casal/Agência Brasil)

Iury Lima – From Cenarium Magazine

VILHENA (RO) – Food. Medicine. Transportation. Basic needs practically inaccessible for more than 27 million Brazilians, according to the Getulio Vargas Foundation (FGV). All these people are below the poverty line – almost three times the entire population of Portugal. But would it be possible to eradicate extreme poverty in the country? For the economist and director of FGV Social, Marcelo Neri, the answer is yes and, as incredible as it may seem, by spending half of the annual budget of almost R$90 billion earmarked for Auxílio Brasil, a Bolsonaro government program created to replace Bolsa Família.

Neri points out that, as difficult as it is to improve life for this part of the population, the big problem in question is not the lack of resources, but the lack of good management, because the federal government would be misspending the money from welfare programs.

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“There is a very large number of poor people: 27.5 million, almost five million more than before the pandemic. If we were to make a very targeted transfer, giving the poor what they need to get to the poverty line, it would cost R$15 per person; a relatively low amount per month, but that, in aggregate budget terms, would be about R$45 billion per year. And we spend twice that, for example, now on Brazil Aid. So, it is still within our reach,” Marcelo Neri pointed out in an interview with CENARIUM.

For the economist and director of FGV Social, the problem is not the lack of resources, but rather poor management (FGV/Reproduction)

‘Generous, but doesn’t see poverty’

In the evaluation of the director of FGV Social, Auxílio Brasil “lost its pace” in the transition from Bolsa Família to the new income distribution system that, despite being “generous”, “does not see the size of poverty” and “contradicts the studies” about the problem.

“The value has increased, but the distribution is made in a way that doesn’t see larger families, with greater needs, that is, the poorest families,” says the specialist.

This ‘invisibility’ profile includes families like Raquel Mapidawey Suruí. She is a single mother, an indigenous member of the Paiter Suruí ethnic group, but no longer lives in one of the 28 villages of her native people.
Unemployed at 35, she does what she can to support her five children.

Today, the family of six lives in the district of Riozinho, 480 kilometers from Porto Velho. Raquel had even received a R$250 (US$ 49,62) stipend from Bolsa Família, but she has been unable to receive any more benefits since August of last year. In a desperate situation, she says that there are days when she even goes hungry.

“I have five children and it is very hard to raise them. Things are very expensive and survival is difficult. We go through needs, there are days we go hungry, we need things and we can’t get them. I need to buy food, school supplies and health supplies for them. We need a little more help from the government,” Raquel Surui told the report.

Raquel Surui, surrounded by her five children, in Riozinho (RO) (Iury Lima/CENARIUM)

Raquel’s family is part of the big cake of people who spent the whole year of 2021 with up to R$ 290 monthly: 13% of the Brazilian population, according to FGV, being the highest level in almost a decade.

“Brazil Aid doesn’t see the case of this family with five children. The program doesn’t differentiate a family of six people from an adult living alone. In a large family like this, the need, logically, is greater. The Brazil Aid program ended up despising a lesson that we not only already knew, but were already doing. It is a step backwards”, criticized Marcelo Neri.

Worst level in almost 10 years

YearExtreme poverty (in %)
201211,4%
201310,5%
20149,2%
20159,9%
201610,8%
201711,2%
201811,1%
201911%
20208,2%
202113%
Source: FGV Social

Investing in the youngest is the way

According to the Getulio Vargas Foundation, a more effective investment in children would result in a beautiful future economy: with more education and assistance from an early age, fewer periods, hospitals, and even fewer cash transfer programs later on.

“Children are the big pocket of poverty in the country. Therefore, it is necessary to give resources to children, mainly, through education. The youngest children are the ones who have left school the most. In the end, taking care of them is taking care of the future of the country,” warned the economist.

Stagflation

According to the specialist, the Covid-19 pandemic pushed about 20 million people to the poverty line (before even extreme poverty). These are citizens who have had to deal with another problem in addition to lack of income: stagflation. This, because, obviously, for the poor, the high prices cause even more impact.

“We have a situation of high inflation, because it has reached 12% in 12 months, and it has been a long time since we have seen this happen. The inflation of the poor is even higher and, besides this, the Central Bank is going to increase interest rates. When it does this, unemployment will suffer. So, it’s not just high inflation, it’s stagflation in the income of the poor: a mixture of stagnation and high inflation,” concluded Marcelo Neri.

See more details in the report made in partnership between TV Cenarium and TV Cultura

* With Jorge Valente colaboration – From TV Cultura

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