Bolsa Família: A Legacy Undecided

Brazil’s Bolsa Família has dutifully served as the flagship of Brazilian social welfare since its christening in 2003. The conditional cash transfer program was captained by President Luiz Ignácio Lula de Silva, who himself was born into rural poverty. Lula’s place at the helm of Bolsa Família seemed to symbolize the passage of political power into the hands of the Brazilian citizenry. But today, as Lula fights to maintain his legacy amidst the Petrobras scandal, Bolsa Família has entered choppy political waters that have exposed a massive hole in its hull: the lack of a legal guarantee. Two recent developments dramatically threaten its continuation, and with it, the livelihoods of some 50 million Brazilians that depend upon the program.

Bolsa Família is widely regarded as one of the world’s most successful conditional cash transfer programs. The program is designed to first reduce short-term poverty by giving poor families direct cash transfers. The amount of money transferred depends on family size and monthly income, with the average family receiving just $65 a month. The program also aims to develop human capital by making these transfers dependent upon whether children attend school and complete their vaccinations.

While the program has admittedly worked in tandem with an increased minimum wage and a proliferation of other social welfare programs, the broad success of Bolsa Família is remarkable.  For millions of Brazilians, Bolsa Família has represented a paradigm shift in which the government has given the poor the opportunity to pull themselves up by their bootstraps by helping them to first buy boots.  Stalwarts of the“economic growth before poverty alleviation” philosophy like the World Bank have referred to the program as a core component of “Brazil’s Quiet Revolution” and a major reason for Brazil’s 15 percent decrease in its Gini coefficient from 2003 to 2013. In fact, Bolsa Família contributed about 15-20 percent of that decline while consuming less than 0.5 percent of the nation’s annual GDP. During that period, the program is credited with lifting around 36 million people out of extreme poverty, and the income of the poorest 20 percent of Brazilians has also risen by 6.2 percent.  Additionally, the nation’s infant mortality rate dropped by 40 percent since the establishment of the program. Bolsa Família recipients also boast a graduation rate double that of poor children outside the program.  Bolsa Família plays a fundamental role in the lives of its 13 million household recipients and offers tangible evidence of the government’s concern for popular wellbeing.

But to these families, two recent policy changes suggest that a second, less congenial, paradigm shift may be underway.  In recent months, the program has been burdened by unprecedented levels of account blockages and a constitutional amendment — passed on December 13 — that holds the fiscal commitment to Brazilian social welfare at dangerously low levels. These developments challenge the very existence of Bolsa Família.

Early this November, the Temer administration announced that around 469,000 Bolsa Família accounts had been canceled and another 654,000 accounts were blocked due to detected irregularities in accounts. This temporarily stopped the delivery of benefits to 1.1 million accounts, representing 8 percent of all recipients.  While the size of the blockages is abnormally high, these developments are less of an anomaly than they may seem. The move  simultaneously parallels the nation’s current political climate and exposes crucial and undisclosed flaws in the program’s makeup.

Firstly, even under former President Dilma Rousseff — the hand-chosen successor to Lula and predecessor to current President Michel Temer — the government had started to block accounts, a sign of the changing opinion towards the program.  Dilma, and now Temer, faced severe pressure from the nation’s financial sectors to cut off certain recipients as proof that the program was a conditional cash transfer program, not just a cash give-away.  However, as the legacies of Lula and Dilma — individuals seen by many as analogous to Bolsa Família itself — become tainted by recent scandal, Temer appears to possess a political mandate to continue the cuts with more severity. While the rhetoric adopted by Temer – to ensure “that the benefit is intended for those who really need it” – is politically expedient in justifying his decision to limit the program, it comes with very real and often unwarranted costs for the recipients.

At first glance a triumphant story of empowering a historically disenfranchised poor population with the keys to its own improvement, the program is today fundamentally threatened by its lack of a legal guarantee.

First, despite the political rhetoric, recipients of benefits from Bolsa Família rarely  earn  significantly more than the prescribed income line.  Second, for many of the recipients, particularly those in rural Brazil, Bolsa Família provides relative income stability, something that jobs dependent upon weather and crop outcomes cannot. It provides a source of income that most recipients use directly for necessities like food, clothing, and housing.  Third, while supposedly motivated by an effort to ensure that the program’s benefits reach those who need them most, the push to reform the program has ironically resulted in the reverse, as Brown University’s Dr. Gregory Duff Morton notes: “The people who will be most severely affected are the people at the bottom of the income distribution who don’t have birth certificates or who were in house fires and lost all their paper work or whose kids aren’t going to school because there isn’t a school in the region.” The blocking of accounts is tremendously  detrimental to recipients and has led to crises in children’s health and nutrition. These crises are often caused by simple bureaucratic mishaps, but can result in the stoppage of funds for months, giving the recipient no legal recourse to retrieve this crucial money for food or other immediate necessities. Moreover, it is entirely possible for a citizen to meet all of the requirements of Bolsa Família but still fail to receive benefits if his or her municipality has already met the assigned quota. “At every step of the way,” says Dr. Morton, “it is emphasized to you that this is not a right.”

The reality of many Brazilians looking to receive the benefits exposes the crucial flaw of the program:  although Bolsa Família has a significant impact on the wellbeing of millions of Brazilians, it is not a guaranteed  social right. Whereas Beneficio de Prestaçāo Continuado – another cash transfer programs in the country that works a lot like Social Security – is enshrined as a constitutionally guaranteed right, the protection of Bolsa Família is almost entirely dependent on the will of the ruling party at any given time. Unlike BPC, Bolsa Família is highly vulnerable to political fluctuations. Thus, just as Bolsa Família entered on the coattails of Lula and Dilma, it seems the program will also suffer as they fall.

Unfortunately, the challenges for Bolsa Família and its recipients do not end there.  For decades, the trajectory of the Brazilian social welfare state was one of government commitment to the gradual expansion of legally guaranteed access to social benefits. As a means of correcting longstanding inequality, the nation’s 1988 post-dictatorial constitution set a minimum investment in health and education. However, on December 13, the Brazilian Congress approved a constitutional amendment that will fundamentally undermine Brazil’s commitment to social welfare. The amendment, Proposta de Emenda à Constituição nº 55 (PEC 55), freezes spending in the public sector for the next 20 years, constraining the next five governments to a very low ceiling, inevitably reducing the government’s contribution to development programs in public health, housing, infrastructure and (perhaps most notably) direct transfer programs.

As a result, any programs that lack a constitutional guarantee, like the Bolsa Família program, risk being significantly reduced or abandoned.  Former Minister of Social Development and one of the founders of Bolsa Família, Tereza Campello, claims that due to the amendment, the nation could have the same level of social resources in 2036 as it did in the early 1990s. Perhaps more frighteningly, Minister Campello suggests that the chance of Brazil returning to the UN Hunger Map, which it left in 2014 in a milestone accomplishment, is “huge.” “You do not eradicate hunger,” she warns. “It can return at any time. Simply neglect the situation.”

As the Senate passed the amendment, approved with 53 votes in affirmation to 19 in negation,  thousands of demonstrators took to the streets of Brasília in response, turning over cars and burning buses while dodging tear gas and rubber bullets. Opponents of the amendment suggest the government will now surely struggle to pay pensions, jeopardizing Brazil’s relatively strong (and constitutionally supported) labor laws and unions.  Rodrigo Nunes, lecturer at the Catholic University of Rio de Janeiro, was poignant in noting that, “if one could speak of a coup in Brazil, it was not against Rousseff, but against Brazilian society, against trends towards greater equality and accountability that had, weakly but surely, emerged over the last decades.” It seems impossible for the situation in Brazil to appear more precarious: The nation currently mourns the loss of the Chapecoense football club in a tragic airplane accident.  Thousands of students  currently protest  proposed public education reform through the defiant occupation of their schools.  Meanwhile, the  scandal-plagued Congress succeeded in quietly gutting an anticorruption bill. Now, a literal lifeline for millions of Brazilians awaits its fate, a fate at the hands of a corrupt and constantly changing government.

Today’s political conditions have exposed the rut in the remarkable story of Bolsa Família. At first glance a triumphant story of empowering a historically disenfranchised poor population with the keys to its own improvement, the program is today fundamentally threatened by its lack of a legal guarantee. This reality ensures that Bolsa Família remains dependent on the generous, albeit fickle and unpredictable, gift of a benevolent government, not the legitimate claim to a right of citizenship. Bolsa Família has served as a powerful example of how cash transfers to a nation’s poor can alleviate poverty, improve the health and social standing of its citizenry, and help combat income inequality, contributing to the broader economic success of the country.  But the program also serves as an example of the pitfalls of a system in which the neediest depend upon a program that, due to its lack of legal assurance, can cut off benefits without explanation. Especially after PEC 55, the resilience of Bolsa Família and the Brazilian government’s commitment to the poor will be tested. Unfortunately, in this experiment, the Brazilian poor will serve as bait.

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