SEATTLE, Washington — Brazil has struggled in recent years to decrease the number of people living on less than $1.90 a day. This is partly due to the economic crisis in 2016 that caused extreme poverty rates to surge up to around 70%. However, the Brazilian Government’s emergency aid program has helped in decreasing poverty rates. With the onset of a global health pandemic, COVID-19 aid in Brazil has caused extreme poverty rates to fall to 3% this year, according to a study by the Getulio Vargas Foundation.
The Decrease in Poverty in Brazil
COVID-19 aid in Brazil not only has dramatically decreased the rate of people living in extreme poverty, but the aid program has also caused a 4% drop in the number of people living on less than $5.50 a day. In addition to decreasing poverty rates, the aid program has succeeded in providing aid to 50% of the population in June 2020, which is a 15% increase from May 2020.
COVID-19 aid has helped in reaching many people in a short amount of time because since April 2020, the aid included giving out $115 monthly to workers and businesses, with single mothers receiving double of that amount. Besides helping those affected by the pandemic, the aid has decreased the wage gap, with the average Brazilian making $280 monthly. Overall, COVID-19 aid in Brazil is keeping extreme poverty at its lowest level since the early 2000s.
Consequences of Decreasing Aid
Even though COVID-19 aid in Brazil seems to be the obvious solution to keeping poverty levels at an all-time low, it is having an adverse effect on the economy. President Jair Bolsonaro announced in July that the aid is putting Brazil in more debt as it costs around $10 billion a month and he has extended the aid program by two months more than what was originally planned.
The Brazilian Government has recently cut the amount of aid in half and the director of the social policy center at the Getulio Vargas Foundation predicts that more than half of the people that benefited from the aid will fall into poverty. Currently, many people in Brazil are facing the consequences of a cut in aid as a result of the economic strain the pandemic has on the economy. The pandemic has caused a surge in unemployment in Brazil due to health guidelines that forced many industries to move remotely. There is also inflation in food prices because of the weaker exchange rate, resulting in an average of a 7% rise in prices in 2020. Without the aid, there will be increased poverty due to the high rate of unemployed people reliant on aid. Rising inflation rates only worsen the situation for struggling people in Brazil.
Future Aid Programs in Brazil
Although COVID-19 aid has been halved and is soon to be removed altogether, there are still some aid programs being planned in hopes of continuing the positive trend in decreasing extreme poverty rates. One of the newer aid programs is a social program planned by Paulo Guedes, the Minister of Economy in Brazil. While President Bolsonaro’s administration is planning to implement another emergency aid program called “Brazil Income”, this new program is providing the poor and unemployed with a standard income to ensure that people have the ability to provide for themselves and their families.
The COVID-19 aid in Brazil proved to have a tremendous effect on millions of residents, resulting in the lowest rate of extreme poverty. Brazil is an example of how relief aid is crucial, especially now, in keeping poverty rates low. If relief efforts can continue in the country through assistance and other forms of aid, low poverty rates in Brazil can be maintained.
– Zahlea Martin