BIG SKY, Montana — Brazil faced a recession in the 2015/2016 financial season. Consequently, the COVID-19 pandemic hit Brazil at an already economically fragile time. While unemployment rates and the national GDP are looking bleaker than they have in years, the government swiftly acted to bring financial relief to millions of individuals across the country. COVID-19 relief in Brazil aims to cushion the impacts of the pandemic on already struggling citizens.
The COVID-19 Pandemic in Brazil
Brazil has a robust healthcare system and has historically handled public health emergencies quite well. Brazil declared the COVID-19 pandemic a public health emergency in early March 2020 but endured incongruous responses from public health officials and President Jair Bolsonaro. Despite a history of efficient responses to public health emergencies, Brazil quickly became an epicenter of the COVID-19 pandemic.
The Brazilian government received criticism for failing to implement an extensive testing and contact tracing system and has failed to import an adequate amount of medical supplies to battle COVID-19. Despite the challenges the administration has faced since March 2020, the government has created one of the most widespread and effective programs for COVID-19 relief in Brazil. The COVID-19 relief program is the most robust social program that Brazil has ever implemented and reports indicate poverty reduction in Brazil since its creation.
Poverty Reduction Success
About 30% of Brazil’s population is receiving COVID-19 aid. Roughly 66 million people have been receiving “600 reais ($110) a month.” This aid has led to poverty levels and income inequality approaching record lows. Data shows that the rate of “people living on less than $1.9 a day fell to 3.3% in June” 2020 from 8% the previous year. Additionally, the rate of people living below the poverty line fell from 25.6% to 21.7%.
Income Inequality also hit a historic low. The Gini coefficient measures income inequality on a scale of zero to 100 with zero representing absolute equality. Between July and August 2020, Brazil’s “Gini coefficient fell below 0.5 for the first time ever.”
Governmental Aid Going Forward
Minister of Economy Paulo Guedes said that the country is rebounding strongly from the COVID-19 pandemic and emergency relief funds are not guaranteed to continue in 2021. President Bolsanaro stated that the emergency benefits to low-income citizens cannot be a perpetual program. The government reduced the payments by half in September 2020.
The total cost of the aid so far is $61.2 billion, a significant financial strain on the already unstable economy of Brazil. Given the likely end to governmental aid for low-income citizens, the future of poverty reduction in Brazil is unclear.
The United States Aids Brazil
Given the uncertainty of future aid from governmental programs, other foreign investments and actors have stepped in to provide millions of dollars in COVID-19 relief aid. This is providing hope for further poverty reduction in Brazil.
The U.S. government has provided more than $19 million in foreign aid relief to Brazil since the outbreak of COVID-19. In late May of 2020, USAID pledged $6 million in assistance to Brazil for emergency relief services such as sanitation, water and other essential health needs. USAID also allocated an additional $2 million to Brazil to specifically support the Amazon region of the nation. This allocation aimed to mitigate transmissions and the impact of COVID-19 in this highly vulnerable region.
The Centers for Disease Control and Prevention (CDC) provided $3 million to Brazil’s government for improved contact tracing, case identification, data collection and overall control of the outbreak. In May 2020, the United States also gave R$75,000 to 40 small grant projects working to combat COVID-19 disinformation and address domestic violence during stay-at-home orders.
The Road Ahead
COVID-19 relief in Brazil provides aid to an already struggling population. The United States sustains a close relationship with Brazil as it helps to mitigate the damages of COVID-19 and restore the economy to further poverty reduction in Brazil.
– Tatiana Nelson