SEATTLE, Washington — In the wake of COVID-19, a poverty rate drop in Brazil highlights Brazil’s successful efforts with its “coronavoucher” program during the pandemic.
Brazil’s Poverty Rate Reaches a New Low
Brazil has had years of recession followed by a stagnant recovery, increasing poverty levels throughout the country. More than a third of the country is on some kind of social benefit. However, according to a new study conducted by a Brazillian think-tank, Fundação Getúlio Vargas, the country is seeing poverty rates drop to the lowest it has seen in 16 years. The country is suffering from some of the highest pandemic tolls in the world, yet paradoxically, people are being relieved from poverty now more than ever.
The Coronavoucher Program
The reduced poverty rate is due in part to President Bolsonaro’s so-called “coronavoucher” program, which has raised his approval rating among the country’s lowest earners from 22% to 35%. The coronavoucher program costs the country a hefty 50 billion reals (equivalent to $9.3 billion) a month, providing monetary support directly to struggling citizens. About 30% of the population have been getting 600 reals a month (equivalent to $110 a month). There has been no social welfare program akin to the coronavoucher program and many question the sudden change in heart of Bolsonaro who had previously rejected COVID-19 distancing parameters and the implementation of more social welfare programs.
Coronavoucher’s Impact on Poverty
With Brazil’s success during COVID-19, extreme levels of poverty have plummeted from 6.9% in 2019 to 3.3.% of the population in June 2020. The rate of households earning less than $5.50 a day has dropped four percentage points from 2019. The percentage is currently 21.7%, accounting for less than a quarter of the population, which is great news for the country. Without the implementation of the coronavoucher, the country’s inequality gap would have exacerbated and poverty levels would have potentially reached an all-time high.
It is predicted that following the COVID-19 pandemic, citizens will expect similar social welfare programs due to Brazil’s success in reducing poverty during COVID-19. The coronavoucher has brought the issue of social welfare programs to the table and is a highly contentious topic. COVID-19 has made resolving poverty a priority and in coming years there will be added pressure for the government to place importance on this issue due to how successfully it has set the bar in pulling the population out of poverty during COVID-19.
The Sustainability of a Costly Program
Many that are part of Bolsonaro’s administration are worried about the false facade the relief stipend presents. The coronavoucher is only a temporary relief that is not sustainable in solving the root issue and many worry that he will exceed the country’s budget and constitutional spending cap.
Celebrating a Reduced Poverty Rate
The emergency COVID-19 aid program is expensive, costing around 50 billion reals a month. This is starkly contrasted to Bolsa Família, the globally acclaimed cash-transfer program created by former President Lula, which is significantly less, costing only 30 billion reals annually. Bolsonaro’s approval rating continues to increase following the program. The sustainability of the program is questionable, however, if it were not for the coronavoucher relief program, the country would have suffered extreme losses during the pandemic.
– Mina Kim