From ‘Bolsa Família’ to ‘Renda Brasil’: Brazil’s Pathway towards Universal Basic Income
How the country’s notable trajectory of social policies could be reaching its consolidation phase at the turn of the decade
In late August 2020, Brazil’s Ministry of the Economy finds itself at a crossroads: after a couple of extensions of the new coronavirus emergency relief payments initiative directed to unemployed and self-employed citizens as well as to informal workers, 10 out of 10 members of the Bolsonaro administration acknowledge that this fiscally unsustainable policy should come to an end until December this year. The monthly BRL 600.00 cash transfer (which is currently equivalent to around USD 107.00) came into force back in April 2020 and was originally meant to last for just three months. Single mothers are eligible to receive twice as much. As a result of enormous political pressure from several sectors of society and other branches of government, the so-called ‘Auxílio Emergencial’ was renewed for additional two months, covering July and August. As for the period between September and December, the government already considers stretching the plan again but paying beneficiaries probably half the original amounts or even less than that.
The ‘Auxílio Emergencial’ works in harmony and in close coordination with ‘Bolsa Família’, Brazil’s flagship social protection and safety net program created in 2003 and designed to tackle poverty and extreme poverty (income below USD1.90 per day per person) as well as to fight hunger, ensure food and nutrition security and promote access to public services such as health, education and social assistance throughout the country. This means that recipients get the highest amount possible from either one of these two sources, non-cumulatively. Despite enormous bureaucratic obstacles — including people who had to issue their equivalent to the social security number for the first time in their lives — and barriers imposed by State-run bank system’s inefficiencies, around 22 million families in Brazil (66 million people, considering the average of three individuals per family) fulfilled the criteria for receiving the temporary financial support. This is a little over 30% of Brazil’s entire population, which is a nation composed by 210 million inhabitants.
Much influenced by the macroeconomic disaster imposed by the COVID-19 epidemic in Brazil and to avoid an undesired hiatus between the conclusion of the period covered by the ‘Auxílio Emergencial’ and the beginning of any new governmental subsidy, the Brazilian government has been considering the launch of a new nationwide social protection system very soon. Envisioned to have its start in January 2021, ‘Renda Brasil’ would represent an attempt to replace the long-lasting and internationally renowned ‘Bolsa Família’ by merging it with ‘Auxílio Emergencial’. It would then cover all 14 million families of the first program plus the 8 million households currently being exclusively assisted by the later. This second group of individuals are the ones who do not qualify for ‘Bolsa Família’s conditionalities and would end up empty-handed in the beginning of 2021. While this transition has been subject to discussions in Brasília since November 2019, talks have been accelerated as Brazil’s Congress already expects a draft bill to be revised in the next few weeks.
‘Renda Brasil’ would certainly be President Jair Bolsonaro’s largest political and budgetary investment in the social area. The new program is likely to represent a BRL 60 billion annual spending, which would be twice as much if compared to ‘Bolsa Família’. By rebranding and expanding the country’s traditional conditional cash transfer program, the Brazilian State would be increasing the average subsidy amount from around BRL 190.00 (USD 34.00) to approximately BRL 300.00 (USD 53.50). Furthermore, such a measure would represent an unquestionable electoral move already envisioning the 2022 presidential campaign. As ‘Bolsa Família’ has been inherently associated with Brazil’s former President Luiz Inácio Lula da Silva and the country’s Labor Party (Partido dos Trabalhadores, PT), Bolsonaro would be strategically coming closer to low-income Brazilians, who are mainly located in the Northeast region of the country (over 50% of ‘Bolsa Família’s recipients live there). This constituency has historically voted for PT and Lula da Silva could be potentially running for President again in October 2022.
When finally implemented, ‘Renda Brasil’ will be the materialization of Brazil’s cumulative experiences when it comes to social policies formulated by the federal government. If back in 2003 ‘Bolsa Família’ constituted the unification of five other previously dispersed social programs — ‘Bolsa Escola’; ‘Cadastro Único do Governo Federal’ (CadÚnico); ‘Bolsa Alimentação’; ‘Auxílio Gás’; and ‘Cartão Alimentação’ –, ‘Renda Brasil’ will now similarly be seen as a further consolidation process as well as an expansion of Brazil’s public policies repertoire in this area. Technical teams within the Ministry of Citizenship (former Ministry of Social Development) have already been promising a rigorous and more frequent monitoring of citizens’ individual status in terms of fulfilling conditionalities and, consequently, a more fast-paced and dynamic procedure for processing beneficiaries’ inclusions or exclusions from the cash transfer program. Additionally, a user-friendly smartphone app is being designed to widen the reach capacity of the program by decentralizing interactions. This will serve as a platform for recipients to check the status of their applications, the due dates of scheduled wire transfers, among other relevant information.
Little by little, during hard and stable times, regardless of the political spectrum, Brazil has been gradually noting that transferring cash for those most in need is not a bad idea at all. A study by Brazil’s Applied Economic Studies Institute (IPEA) in 2013 showed that ‘Bolsa Família’ had a remarkable multiplier effect in the country’s economy. By each BRL 1.00 invested in the program by the federal government, BRL 2.40 actually circulate in terms of households’ consumption and up to BRL 1.78 are added to the nation’s GDP. Likewise, ‘Auxílio Emergencial’ has been saving the businesses in 2020. This happens mainly because poor families end up necessarily, and almost instantly, buying goods and services in their local contexts (instead of having the ability to save the money), which helps activate many economic actors’ cash flows. The macroeconomic impact is gigantic specially considering that over half the economically active population (people between 15 and 65 years of age) of Brazil could be receiving this financial support from the State. So far, Brazilians have been experimenting with conditional modalities of cash transfers only. However, as we enter this century’s roaring twenties, this nation could be gradually paving the way for the creation of an unconditional Universal Basic Income (UBI) of its own. As any public policy, it starts with a bold idea. Just like any political process, it has to start somewhere and somehow.