Brazil, which has suffered one of the worst consequences of a pandemic in the world, responded to the crisis by distributing so much cash to citizens that poverty and inequality have almost reached national historical levels.
Some 66 million people, 30% of the population, earn six hundred reais ($110) a month, making it the most ambitious social program ever undertaken in Brazil, a shocking replacement for President Jair Bolsonaro, who denounced social assistance, rejected the virus. and now it’s new to popular.
The government has not yet published its own figures, but knowledge of the Getulio Vargas Foundation, one of Brazil’s most sensible universities, shows that those living on less than $1. 9 a day fell to 3. 3% in June from 8% last year, and those below the poverty line were 21. 7% compared to 25. 6%. Both are minimums of 16 years.
Economist Daniel Duque, the lead researcher, said poverty had reached the lowest rate since knowledge gathering began 40 years ago, however, a replacement in definitions in 2004 makes comparison simple before this is complicated. He added that unreleased measurements from July and August show that inequality calculated through the so-called Gini coefficient first fell below 0. 5.
In other words, as Covid-19 killed some 122,000 Brazilians, reduced poverty and inequality, at least in the short term, and also placed the government’s well-being at the center of political debate, as it did ten years ago with the Bolsa Familia program. that has raised millions. The factor will be reflected in the November local elections, a presidential candidacy in 2022.
Duque says it is as if Brazil has suddenly created a vast fundamental source of revenue programs. He thinks it will not be imaginable to end it soon: the population will actually demand more types of programs like this, and “we cannot face the threat of a great decline. “
In fact, the government has begun to diminish it. On Tuesday, Bolsonaro announced that donations would be reduced in part for the rest of the year and promised to make some form of permanent allocation, did not imply how he would pay for it.
Economists say the technique is not sustainable. “Brazil is heading for its largest number one deficit of more than 11% of GDP this year, and the challenge is how to get out of it. “christopher Garman, Managing Director for the Americas, Eurasia Group. “There’s no loose food. “
Markets agree. Last week, investors embarked on a large sale of Brazilian assets after Bolsonaro warned that it would be willing to exceed constitutional spending limits to finance permanent allocations. The genuine fell more than 2. 2% to 5,6320 per dollar, while Brazilian stocks fell by 2. 7%, the peak. emerging markets; both are still recovering.
This is due to the astronomical value of the program, known as coronavoucher, 50 billion reais ($9. 3 billion) consistent with the month until August, which charges in five months what the Family Stock Exchange – created through former President Luiz Inácio Da Silva, or Lula – spent on 8 years. The plan provides $35 a month, achieving about 14 million families this year.
The crown bonus, which represents almost part of Bolsonaros’ recovery program, is more popular, especially among the poor.
José Carlos Alves, 56, who sells souvenirs on the outskirts of the Brazilian capital, Brasilia, says that the $110 per month has replaced his policy, as he faces several months of tourists or sales. says aid shows that Bolsonaro cares and “now has my vote in 2022. “
Monica de Bolle, principal investigator at the Peterson Institute of International Economics, who pleaded with lawmakers on emergency aid legislation, said it was a broader phenomenon: Bolsonaro learned what appears: Brazil is a deficient country with many other deficient people and if given money, you will get their votes.
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