At 9 a.m., Marina Timóteo da Silva, 20, takes her youngest son in her arms and her oldest daughter by the hand down the narrow alleys of Grota, in Paraisópolis, São Paulo, to the lunch line at the NGO G10 das Favelas, in the lower part of the slum.
She gets two portions for lunch and dinner, then wait to see if she can get another one for breakfast the next day. She separated from her husband four months ago, and now provides for her 5-year-old daughter and 1-year-old son with donated food and odd jobs as a hairdresser in the neighborhood. Ms. Silva finds herself with no way out. She is very concerned about the rent, which will be raised to R$400 from R$300.
Ms. Silva is part of the more than 4 million new poor that the pandemic left as a legacy in Brazil. Since the Covid-19 shock, the country has been experiencing an explosion of poverty and prospects are not rosy. This acceleration is visible in large cities, including São Paulo, where there is an increase in entire families living on the streets.
The proportion of poor people – who have a monthly per capita income of up to R$261 – was 10.97% (23.1 million people) in 2019. In August 2020, it went to 4.63% (9.8 million people), the best since official records began, due to the adoption of full emergency aid, according to FGV Social, the Center for Social Policy at the Fundação Getulio Vagas, based on microdata from the Continuous National Household Sample Survey (PNAD Contínua) and PNAD Covid.
In the first quarter of 2021, excluding the emergency aid, but returning cash-transfer program Bolsa Família, poverty is multiplied by 3.5 and reaches 16.1% of the population. That’s 34.3 million people below the poverty line, 24.5 million more than in the previous six months.
With the adoption of the new aid on a reduced scale and limited duration from April this year, the proportion of people below the poverty line reaches 12.98%, 4.6 million more than before the pandemic.
The scenario ahead is uncertain, says FGV Social coordinator Marcelo Neri, due to the doubts surrounding Auxílio Brasil, which will replace Bolsa Família. “If the original value of Bolsa Família were maintained, another 6.8 million would be in poverty, totaling 11.4 million more people than before Covid-19,” said Mr. Neri. “But it should not reach this total, as the new aid will be higher. We just don’t know how much higher it will be and how long it will last.”
Many beneficiaries of Bolsa Família and the emergency aid do not know if they will be covered by Auxílio Brasil – the discussion on poverty lines, inflation correction and the extension of payments is ongoing.
This is the case of Ms. Silva, from Paraisópolis. Before the pandemic, the woman, who was born in Bahia and has been living in São Paulo for 15 years, worked serving meals at the restaurant Cidão do Bar, near the Alto Morumbi slums. She earned R$900 a month by March 2020, when Cido, the owner, had to sell the business. Ms. Silva even received R$600 through the emergency aid last year. Since then, she gets by with the R$150 she eventually gets as a hairdresser, the meals she takes from Monday to Saturday, and the help from her ex-husband, who last week gave her R$100 to buy fruit and diapers.
She lives in a small house in Grota, one of the areas where the inhabitants live crowded together in Paraisópolis, in the middle of alleys with garbage. Downstairs is a single mattress where she sleeps with her children João Miguel and Ana Vitória, next to the sink with fruit, three dishes and detergent, and the bathroom. Upstairs, the cold floor with puddles that formed the night before because of the leaks.
“With what I earn today I can’t buy gas bottles and cook food. If I received the aid, I would be able to buy bottles, and I would get a stove from a junkyard,” she says. “But I don’t know if I’ll get it, and I have to see how I’ll pay the next rent. I am living off collecting cans.”
Twenty kilometers away, in Heliópolis, Renata Cristine do Nascimento, 31, lives a similar situation. “I was born and grew up here. I have never been through this. I’ve been in trouble, but I always had a cart to pull, recycling, cans and cardboard to pick up, vegetable to sell. But not now,” she says. “We want to work and we can’t. And there are many families like us out there, in difficult situation, sharing milk, rice, whatever they have.”
Ms. Nascimento lives with her son Miguel, age 5, and daughter Janaína, age 12, in a bedroom with a kitchen inside an old house that was divided into three, in an area known as Paquistão (Portuguese for Pakistan), near the Heliópolis Hospital. Her house is the only one where ventilation can enter through the door and window – the other two neighbors only have a door. The rent for the room that has a double bed where she sleeps with her son, a single bed for her daughter, a TV, a stove, a refrigerator and a bathroom with shower costs R$400 and is two months overdue.
She says that everything got worse after she got Covid-19 in January this year. Until then, she was receiving R$171 from Bolsa Família and a salary of R$1,200 as an employee at a supermarket in Mooca. She had three strokes, was hospitalized for 15 days, had physical therapy and partly lost vision in her left eye.
She received R$1,200 in emergency aid in April 2020, but she doesn’t know how much she will receive in the future. Today she receives Bolsa Família, plus R$380 she gets through odd jobs as a kitchen assistant in a bar and at Clube Juventus every two weeks. Among the fixed expenses are rent (R$400), internet (R$50) and school transportation (R$120). Eventually Ms. Nascimento gets odd jobs – she does manicure and pedicure services for R$25 and cleans houses for R$100.
“Sometimes I get a donation, a basic food basket, or I use my credit card. Once I owed three months’ rent and a friend came to help me,” she said. “But I can’t get a job anymore. I’ve already had a lot of interviews to work as a kitchen assistant and caterer, but when I explain that I need to have exams every Monday and Thursday because of the sequelae of Covid, they don’t accept.”
Ms. Nascimento complains that the government has forgotten who lives in the favelas and that, even if the new allowance is higher than R$400, it will not be enough. “We don’t want money, we want work. I don’t want the government to give me R$400, I want to work,” she said. “I want to be able to walk around, go out with the kids, take them to the park. I just want to have a job so that if my son asks for bread, I can pay for it. Because today I don’t have a cent.”
All the partial evidence suggests that there has been a very significant and sad increase in poverty in Brazil, said Pedro Herculano Guimarães Ferreira de Souza, with the Applied Economics Research Institute (IPEA). “What triggered this was the pandemic, but the problem is that all the evils it brought came at a very bad time for Brazil,” he said. “The recovery that took place between 2016 and 2019 benefited the richest half of the population, while poverty rates remained very high. It was a lost decade because after the recession, poverty and inequality increased and never fell to their previous level.”
Mr. Souza says the pandemic caught Brazil at a bad time, with Bolsa Família out of date and without adjustment, and a lower income among the poorest people than before the recession. “It was a very bad starting point. In 2020, we had the emergency aid, but it was temporary and expired. Now we are seeing the real impact of the crisis, and the damage has become clear.”
Today, the big problem with Auxílio Brasil is uncertainty, he said. “Any program that manages to transfer more money to poor families is welcome, because R$50 or R$100 makes a big difference,” he says. “But we don’t know the format of the program, the values, whether it will be permanent or temporary, how the readjustment of the poverty lines will be.”
Data from the Ministry of Citizenship show that nearly 68.26 million people were eligible to receive emergency aid in 2020, a number that dropped to 56.84 million eligible to receive the extension of emergency aid, and to 39.37 million who received the aid in 2021. Of these, just over 10 million are Bolsa Família beneficiaries and should continue to receive the payments, now under the name Auxílio Brasil. But the fate of more than 29 million people who received emergency aid this year but do not receive Bolsa Família is an unknown.
“What will happen is that these people will be left unprotected”, said economist Marcelo Medeiros, a professor at Columbia University. “Even if that’s the case, even including everyone in this new Bolsa Família takes time and depends on government engagement. And the incentives that the government has for this are deeply moved by the elections.”
Mr. Medeiros predicts that the increase in inequality in recent years should persist in the medium term. “The truth is that poverty in Brazil grew as it always does after the recession. What the pandemic has done is to amplify that by introducing new causes. But Covid-19 wasn’t the only reason,” he said.
According to the economist, after the 2015-2016 recession, no clear measures were taken to recover the income of the poorest. “It was just when the government should have brutally expanded Bolsa Família, but it didn’t. The social safety net is there for that: to keep people from falling into poverty in a crisis,” he argues. Mr. Monteiro says that from 2016 until now there have been few moments of recovery focused on the richest.
In a “normal” country, social spending exists to compensate, reduce and mitigate social problems arising from economic crises, like the one that Brazil has been experiencing since the end of 2014, said Celia Kerstenetzky, from the Institute of Economics at the Federal University of Rio de January (UFRJ).
“The health crisis has aggravated this scenario, affecting employment and income. But it also showed the potential of social policy to compensate for problems at a critical situation, as happened with emergency aid, and it demonstrated what many were already saying: that social policy has positive impacts on the economy and development. In the absence of this transfer of income, the fall in GDP in 2020 would have been much greater than it was,” she said.
International experience, she says, shows that social policy works well when institutionalized in the form of regular, systematic programs and policies, functioning as “automatic stabilizers” that respond immediately to social needs.
But in the case of Brazil, she said, we react to crises by deinstitutionalizing previous public responses, subtracting the capacity to respond to problems. “The most perverse symbol of this is the extermination of Bolsa Família and its replacement by something that nobody knows what it is, but which has a date to end and a political and electoral objective to fulfill,” she said.
Mr. Medeiros argues that Brazil is once again in the post-recession environment that marked the Temer administratrion. “We need to make the economy recover and there is no clear measure to foster economic recovery among the poorest,” he warned.
If the GDP grows around 4.8% this year, as projections point out, it does not mean growth of this magnitude for everyone. “When we say that the economy will grow, we are talking about the richest 5%, who keep half of everything,” he said.
The idea of economic recovery has been aborted, with forecasts getting worse and a scenario of stagflation, which is already a reality for the poor, says Mr. Neri. “The unemployment rate and inflation are higher for the poorest half of the population. And they’ll both go up before they go down,” he says. “The scenario is worrying and adds to the electoral cycle that is approaching, which tends to throw more fuel on all these uncertainties.”
Source: Valor international