Brazilians Plunged Into Poverty As COVID Aid Dries Up | Business and economic news

 Brazilians Plunged Into Poverty As COVID Aid Dries Up |  Business and economic news

Tatiana Araujo de Sirqueira, 33, single mother of six, and Brazilian President Jair Bolsonaro are almost neighbors, but they live in different worlds.
Sirqueira lives near a landfill less than a mile from Planalto Presidential Palace in Brasilia, along with 36 other families, and collects money by recycling garbage.

She is one of Brazil’s roughly 40 million “invisible” people, a term coined by Economy Minister Paulo Guedes for people without formal jobs who have flown largely under the radar of the Brazilian government and society.

“I live next to the president. I see him and his security pass here every day, ”she said on a hot and dusty afternoon outside her makeshift home. “How can he pass here every day and not see the families here?”

Last year, however, Sirqueira was not invisible. From April to December, she and some 66 million other Brazilians received money from the government’s most generous cash transfer program, emergency aid to help the most vulnerable through the coronavirus pandemic. .

This nearly $ 60 billion basic income explosion has softened the economic blow from the coronavirus, boosted Bolsonaro’s popularity, and pushed back poverty – but its expiration at the end of 2020 negates many of those effects.

Sirqueira now relies on the pre-existing “Bolsa Familia” social benefit of up to 205 reais ($ 36) per month, or about a third of last year’s emergency aid, missing out on a smaller second cycle of the government. money transfer program that starts in April. .

“They said that I no longer met the criteria and therefore could no longer be part of the program. My life has become much more difficult since then, with six children to raise, ”she said.

Millions of Brazilians like her were briefly lifted out of poverty to be sent back again. The national poverty rate fell sharply to 4.5% in August from nearly 11% in early 2020, calculates the Getulio Vargas Foundation.

However, the Rio de Janeiro-based think tank estimates that 12.8% of Brazil’s population – some 27 million people – now live below the poverty line of 246 reais per month, the highest number since the start of the decade. series ten years ago.

The economic impact of aid was matched by its political impact, reversing Bolsonaro’s waning popularity as the first wave of COVID-19 struck and earned him record approval among poorer classes and regions of the world. country, which has since retreated.

Many people in Brazil struggle to cope with less pandemic government aid and rising food prices as millions fall back into poverty [File: Silvia Izquierdo/AP Photo]

Investigator Datafolha showed that Bolsonaro’s disapproval in Brazil’s poorest northeast surpassed his approval by 16 percentage points in April 2020, when money transfers began.

That gap narrowed to just two points in August, the last month before the maximum allowance of 600 reais ($ 104) was cut in half. By January, the gap had rebounded to 15 points, essentially returning to where it started.

In view of next year’s presidential election, Bolsonaro has been keen to extend the program, even if it wreaks havoc on public finances, shakes financial markets and irritates Guedes.

The new aid program, which begins in April, will provide four monthly transfers of an average of 250 reais ($ 43) to a smaller group of informal workers.

Its price of 42 billion reais ($ 7.3 billion) is a fraction of the 322 billion reais ($ 56 billion) bill for last year’s aid, which was almost 4.5%. of gross domestic product.

The smaller program allayed some concerns about Brazil’s public debt trajectory, but also reduced its impact on poverty and inequality rates.

Joao Saboia, professor emeritus at the Federal University of Rio de Janeiro, says that even with the next round of cash transfers, poverty rates will remain high.

“The outlook for 2021 is very poor – slow vaccination, stagnant economy, rising unemployment and high poverty,” Saboia said.

For Sirqueira, a single mother of six, it might be worse.

Local authorities are pushing to transfer his family to a satellite town outside the capital. She resisted their efforts, wary of how her children will fare in a new neighborhood.

On Tuesday, they bulldozed his house.


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