Dilma Rousseff vows to continue direct cash transfer scheme "as long as there is poverty in Brazil"

On the 10th anniversary of a social programme that has lifted 50 million people out of poverty and inspired policies in more than 20 countries including India, Brazilian President Dilma Rousseff has vowed to continue the direct cash transfer scheme “as long as there is poverty in Brazil”. Bolsa Familia (Family Grant), which is dubbed by the country’s opposition parties and media “populist,” is now targeting the 2.3 million people remain trapped in poverty.

Last week, the centre-left government of Ms. Rousseff, who would seek re-election in October 2014, pledged to “eradicate poverty” through the scheme that was first launched under President Luiz Inacio Lula da Silva in 2002. Speaking at an event to mark the anniversary, the President said the programme had not only reduced poverty, but also contributed to the economy. “Never before has a programme boosted the economy so much. For each R$1 spent in the programme, the impact on GDP is R$1.78,” she said.

Even as Ms. Rousseff rejected the criticism of the programme, which provides B$ 25 billion ($12 billion) to 14 million families, the country’s centre-right parties attacked the Workers Party government, accusing it of “prolonging” the scheme to capture voters in the poor regions.

But the achievements of Bolsa Familia are hard to dismiss. According to the U.N., 6.5 per cent of Brazilians were living on just a dollar a day in 2000; by 2009, it was reduced by half. Though touted as a direct cash transfer, Bolsa Familia has created a net of financial assistance and health and education facilities.

To get on the programme, a family’s children should be in school and get vaccinated. “One of the best effects of the programme is that child mortality is down by 60 per cent. Earlier, children in the age group of 0-5 were dying of hunger. Also, they are attending school. So, the programme has taken care of hunger, health and primary education,” says Prof. Walquiria Rego, a political scientist whose book Voices of Bolsa Familia has tracked the life of beneficiaries.

Initially, the average amount given was R$73 per person and it reached just three million households. In 10 years, the assistance has gone up to R$152 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 children in school.

The programme has also empowered women. To make sure that the money was not lost due to corruption, the state-owned Caixa Federal bank provides the funds directly into the bank accounts of mothers of poor families. “Many women told me that Bolsa Familia gave them personal freedom. The regular income has made them visible and acceptable to the society,” says Prof. Rego.

Negative impact

But with the country getting into the election mode ahead of the presidential polls in 2014, critics are ramping up their attacks on this scheme. While some opposition parties have alleged that “1.23 million people receiving the grants were not in poverty”, industry lobbyists say it has a negative impact on labour force participation.

But independent studies show that the programme has made a deep impact. Last week, the Organization for Economic Cooperation and Development (OECD) praised Brazil for cutting poverty substantially. “Successful policies to spread the benefits of economic growth more widely have substantially reduced poverty and income inequality,” the OECD said. “Wider access to education has allowed more Brazilians to move into an expanding number of better-paid jobs.”

Another study, published last month, by the Brazilian Institute of Applied Economic Research showed that the programme was responsible for a decline of 28 per cent in extreme poverty in Brazil in the last decade.

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