Poverty in Brazil During COVID-19 Is Facing Accelerated Rates

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SEATTLE, Washington — With more than 150,000 dead from COVID-19, Brazil is struggling against both the social and economic impacts of the novel pandemic. Evidence shows that COVID-19 is more detrimental to areas with higher rates of poverty and/or reliance on labor jobs. Strong leadership and policies are also crucial to effectively countering the virus, which explains why Brazil has been so hard-hit. The HEROS Act could be a key player in poverty in Brazil during COVID-19.

Poverty in Brazil

One-quarter of Brazil’s population lives in poverty, lacking access to healthcare because they cannot afford health insurance. Inadequate healthcare has led to many diseases running rampant throughout the nation within the last 20 years. As a result, Brazil’s poor suffer disproportionately from deadly diseases like dengue, chikungunya, Zika and H1N1. After COVID-19 began to spread in the country, its impact only added to the stress of its impoverished communities.

Additionally, Brazil’s president, Bolsonaro, did not take the disease seriously and refused a nation-wide lockdown, leading to a patchy and ineffective response at the state level. A Statista report in October forecasted that Brazi’s GDP would decrease by 4.52% in 2020, but experts are saying that it will get worse in 2021. As Latin America’s largest country and the world’s ninth-largest economy, the devastation of Brazil will also severely affect many other nations, including the U.S.

Poverty in Brazil During COVID-19

Being one of the countries worst-affected by the coronavirus, Brazil is struggling to maintain emergency payments to its citizens. The monthly payments starting at R$600 reais, have been cut in half and will expire on Dec 31. This could jettison 15 million Brazilians into poverty. The payments had helped lower the number of Brazilians that earn less than $92 per month (515 reais) by 23.7%. Continued payments past January 2021 will be necessary to stabilize the nation’s hard-hit labor market/force.

Politicians are hesitant to extend this aid as the only plausible funding solution would break a constitutional spending cap and worsen a run-away budget deficit. The first round of relief subsidies cost the Treasury R$321.8 billion reais ($57.6 billion). However, without these crucial relief-aids, more citizens are projected to join the 4.8 million Brazilians that fell out of the middle class due to COVID-19-induced loss of income.

U.S.-Brazil Relations

As the two of the largest economies in the Western hemisphere, Brazil and the U.S. share an important relationship. In 2018, the two countries traded $103.9 billion in goods and services, giving the U.S. an overall trade surplus of $20.6 billion. Brazilians are also “the eighth-largest group of visitors” to the U.S, contributing greatly to America’s tourism industry. Therefore, in the gradual event of recovery from COVID-19, Brazil’s economic stability will be essential to the U.S.’s economic restoration.

The U.S. has already loaned the Ministry of Economy in Brazil $350 million to support COVID-19 relief and containment, reinforcing this commitment to Brazil’s needed economic rehabilitation. Congress is currently reviewing the HEROES Act, which promises an additional $9 billion in foreign aid funding globally. Support of this bill will not only help allies like Brazil but also prevent further spread and development of the virus.

Currently, supporting bills such as the HEROES Act and institutions like the U.S. Agency for International Development is the best way to help reduce poverty in Brazil during COVID-19. People can support funding for the International Affairs Budget to fight COVID-19 by emailing their representatives.

Christine Chang
Photo: Flickr

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