WORLD AFFAIRS
Lessons from Brazil
by REETIKA KHERA
There is more to Brazil's social achievements than its much-talked-about cash transfers.
HILMA, A BOLSA Familia beneficiary, at her residence in Formosa. She uses the money she receives to buy food, clothes and even durables for her family.
I RECENTLY spent a week in Brazil studying its much-talked-about conditional cash transfer programme, Bolsa Familia. It is seen as a successful poverty reduction and food security programme. My interest in it stems from the recent push towards a similar programme in India in lieu of the public distribution system (PDS). The fourth meeting of the National Council for Food and Nutrition Security (CONSEA) in Brazil, held from November 7 to 10, provided me a great opportunity to meet some of those involved in policymaking and implementation in that country. Besides this, I visited two municipalities (the lowest administrative unit in Brazil) to speak with the people who run local administrations and some beneficiaries of government programmes.
During my short visit, I was struck by how different Brazil was from India. To someone who comes from India, it is hard to believe that Brazil still counts as a developing country. The comparative data for the two countries confirm this impression. For instance, in 1990, Brazil's GNI (gross national income) per capita per annum (in terms of purchasing power parity, or PPP, dollars) was five times as high as India's and is now approximately thrice as much (see table on page 62).
Poverty in Brazil has been the problem of a small minority of the population. In a paper that compares Brazil, China and India, Martin Ravallion calculates that in 1981, less than one-fifth (17.6 per cent) of Brazil's population was in “extreme poverty” (that is, living on less than $1.25 a day). This proportion came down to less than 10 per cent by 2005. In India, on the other hand, up to 42 per cent lived in extreme poverty in that period. That is, in 2005, the level of extreme poverty in India was still higher than that in Brazil nearly 25 years ago.
Going beyond income and poverty, even 20 years ago Brazil was ahead of India on most development indicators. In the past two decades, it has consolidated its position: as the table shows, it has almost achieved full literacy, infant mortality rates are low and, very importantly, has favourable gender-specific indicators (for instance, in Brazil, female literacy is marginally higher than male literacy and the female labour force participation rate is almost double that of India's female labour force participation).
Further, Brazil has well-developed public infrastructure. A very small proportion (less than 15 per cent) of Brazil's population is in rural areas. Adjusting for the different definition of “rural” in the two countries is unlikely to bridge the gap. According to the 2011 Census, nearly 70 per cent of India's population still lives in villages. Comparing infrastructure indicators is even more revealing: nearly all households in Brazil have access to electricity, with reasonably regular power supply (I did not experience any power cuts during my visit); access to piped water is impressive compared with India (see table). The reach of the banking system is better than in India.
MARCIA LEITE, 19, attends a class with her 16-month-old son Pablo Ricardo at a public school in the settlement of Tupa, in Xapuri, in the northern Brazilian state of Acra, on March 17, 2008.
Most of Brazil is administered through lively municipalities that are functional bodies with proper administrative infrastructure, including staff, buildings, furniture and computers. The municipalities are also given financial incentives for the proper implementation of federal programmes.
It is important to bear in mind these basic differences between India and Brazil while designing food and nutrition programmes or poverty reduction policies in general. In Brazil, these issues came to prominence when Luís Inácio Lula da Silva came to power in 2003, when poverty, hunger and nutrition afflicted less than one-tenth of Brazilians. In 2003, Lula's government emphasised that Brazil was a country with intolerable inequality. The problem of deprivation was concentrated in such a small segment of the population that it tended to be ignored. His government sought to put the spotlight on them, with the resolve to eliminate such deprivation.
In India, by contrast, the problems of poverty, ill-health, under-nutrition and illiteracy remain pervasive – and perhaps because of being so pervasive, they seem to be tolerated.
Social Security in Brazil
In spite of the fact that the size of the problem in the two countries is different, Brazil's achievements in the past 10 years have been commendable. Indeed, reaching out to the most deprived groups tends to be the most difficult part of the battle against poverty and hunger. This section describes some aspects of Brazil's successful strategy to deal with this leg of the journey.
A UNIVERSAL ACCESS popular restaurant serving meals at the rate of one Brazilian real (Rs.30). The day's menu was fish, chicken sausage, beans, salad, fresh fruit juice and a fruit.
Whenever I mentioned my interest in Bolsa Familia in my discussions, the first thing that people told me was that Bolsa Familia was just one among a range of interventions by the government. Isis Ferreira and Marcelo Saboia, who work at the Ministry of Social Development, said that Fome Zero was a strategy and Bolsa Familia was one programme of that overall strategy. In fact, health, access to water, higher minimum wages are all seen (and rightly so) as essential to achieve food and nutrition security.
In general, the reach and quality of basic services are quite high in Brazil. As the table indicates, Brazil spends nearly 10 per cent of its gross domestic product (GDP) on education and health. India's public expenditure on health and expenditure pales in comparison, barely crossing 5 per cent of the GDP. The higher levels of expenditure are visible on the ground as well. In Formosa, we visited a public health centre (PHC) which serves a population of 4,000. It has 13 field health personnel, a general doctor, a nurse and a dentist. Similarly, access to schooling is impressive; for a total population of 100,000 the district has approximately 60 government schools.
Brazil has an extensive network of social protection programmes. The range of schemes is mind-boggling: a “food basket” programme (providing fresh food); popular restaurants (which provide nutritious meals at one Brazilian real (BR) per meal); a new “food bank” programme (which procures perishables from farmers); a programme for the eradication of child labour (PETI – not just for child labourers but also for children vulnerable to child labour); a housing programme; youth shelters for children from battered homes; and a programme of “entertainment” for the elderly. The municipalities also seem to play a role in the formation of cooperatives and run skill development and training programmes (hairdressing, manicure, and so on) for some Bolsa Familia beneficiaries.
Many of these are now legal entitlements – there is a law for a unified health system (1990), a law on social assistance (1993), a basic income and citizenship law (2004), and, of course, the food and nutrition security law of 2006 and the long-running school meal programme (enacted as a law in 2009).
What seems to be really special about Brazil's battle against poverty and deprivation is an “intensive care” approach whereby every needy person receives personal attention. In 2001, Brazil introduced the Cadastro Unico, a single registry that allows people to come forward and register for various government programmes. People register at their local municipal office by filling a detailed 10-page booklet, which helps the administration “diagnose” the problem and make a customised prescription for each family. Some families may require only income support through Bolsa Familia, while others may require food assistance; children from vulnerable families may need to be enrolled in the programme for the eradication of child labour.
The intensive care approach, operationalised through a network of CRAS (Referral Centre for Social Assistance), has been possible for two reasons: one, it is focussed on the most deprived sections of the population and, two, Lula's regime since 2003 came with the political will to deal with the problem.
Cash transfers
In this larger frame of social interventions, it was not easy to tell whether Bolsa Familia was the most important intervention though it certainly has the largest budget (0.5 per cent of GDP in 2006) and is widely appreciated as a successful intervention. Bolsa Familia assistance is based on self-reported income. It is supposed to be given to any family whose per capita income is below BR 70 a month and to those families with children whose per capita income is above BR70 but below BR140.
It seems well recognised that those in the informal sector have variable and uncertain incomes and that there will be periods when their incomes exceed the Bolsa Familia cut-off and other times when the family earns nothing. For that reason, families are allowed to stay in the programme for at least two years regardless of what happens to their income over this period.
Brazil has a large formal sector (approximately 60 per cent), and when people enter employment in the formal sector, their employment and wage information is uploaded on to the registry of the Ministry of Labour. Every two years, the Cadastro Unico database is updated and cross-checked with the Ministry of Labour to ensure that ineligible persons do not get Bolsa Familia cash transfers. Those in the formal sector are covered by social security benefits such as retirement pension, survival pension, sickness benefit, and unemployment benefit.
Bolsa Familia includes an unconditional cash transfer component as well as a conditional transfer component, which is tied to school attendance and immunisation of children. Initially, benefits were provided for up to three children; this limit has now been relaxed and benefits are given for up to five children. Since school attendance and immunisation are close to universal in the first place, the conditionalities are easily met in most cases. When they are not, remedial action is supposed to be taken – discontinuing the transfers is the “last resort”.
THE REFERRAL CENTRE for Social Assistance (CRAS) in Lauro da Freitas municipality where those in need of assistance come to register their names.
The popularity of Bolsa Familia became clear from my interview with Hilma, a class 8 graduate, currently a Bolsa Familia beneficiary. She lives in Formosa, 80 kilometres from the capital, Brasilia. Her husband is a truck driver with an irregular income. I asked her what she felt was the most significant about getting Bolsa Familia money. She said it was the financial autonomy. Earlier, when she wanted to buy things for her children (she has three daughters), she had to “beg” her husband for money. Now, she is free from that dependence on him. Her mother had been a beneficiary of the programme when she was growing up, so she is accustomed to such assistance. Initially, she spent all the money on food. She was under the impression that nothing else was allowed. Then she enquired at the local municipality office and was informed that she could spend the money as she liked. She now spends some part of it to buy milk and other food items, clothes and schooling material for her girls, but most importantly, over the years she has bought a cooking range, a refrigerator and a sofa set.
Emerging from a long period of dictatorship, Brazil adopted its Constitution in 1988 and immediately began the task of building a welfare state. A strong and comprehensive legal framework, political priority to the issue, allocation of adequate financial resources and public mobilisation have all contributed to Brazil's impressive achievements in this field in the past two decades.
The author would like to thank Saloni Chopra, Jean Dreze, Marcelo Saboia and Fabio Verras for their helpful comments.
Lessons from Brazil
by REETIKA KHERA
There is more to Brazil's social achievements than its much-talked-about cash transfers.
HILMA, A BOLSA Familia beneficiary, at her residence in Formosa. She uses the money she receives to buy food, clothes and even durables for her family.
I RECENTLY spent a week in Brazil studying its much-talked-about conditional cash transfer programme, Bolsa Familia. It is seen as a successful poverty reduction and food security programme. My interest in it stems from the recent push towards a similar programme in India in lieu of the public distribution system (PDS). The fourth meeting of the National Council for Food and Nutrition Security (CONSEA) in Brazil, held from November 7 to 10, provided me a great opportunity to meet some of those involved in policymaking and implementation in that country. Besides this, I visited two municipalities (the lowest administrative unit in Brazil) to speak with the people who run local administrations and some beneficiaries of government programmes.
During my short visit, I was struck by how different Brazil was from India. To someone who comes from India, it is hard to believe that Brazil still counts as a developing country. The comparative data for the two countries confirm this impression. For instance, in 1990, Brazil's GNI (gross national income) per capita per annum (in terms of purchasing power parity, or PPP, dollars) was five times as high as India's and is now approximately thrice as much (see table on page 62).
Poverty in Brazil has been the problem of a small minority of the population. In a paper that compares Brazil, China and India, Martin Ravallion calculates that in 1981, less than one-fifth (17.6 per cent) of Brazil's population was in “extreme poverty” (that is, living on less than $1.25 a day). This proportion came down to less than 10 per cent by 2005. In India, on the other hand, up to 42 per cent lived in extreme poverty in that period. That is, in 2005, the level of extreme poverty in India was still higher than that in Brazil nearly 25 years ago.
Going beyond income and poverty, even 20 years ago Brazil was ahead of India on most development indicators. In the past two decades, it has consolidated its position: as the table shows, it has almost achieved full literacy, infant mortality rates are low and, very importantly, has favourable gender-specific indicators (for instance, in Brazil, female literacy is marginally higher than male literacy and the female labour force participation rate is almost double that of India's female labour force participation).
Further, Brazil has well-developed public infrastructure. A very small proportion (less than 15 per cent) of Brazil's population is in rural areas. Adjusting for the different definition of “rural” in the two countries is unlikely to bridge the gap. According to the 2011 Census, nearly 70 per cent of India's population still lives in villages. Comparing infrastructure indicators is even more revealing: nearly all households in Brazil have access to electricity, with reasonably regular power supply (I did not experience any power cuts during my visit); access to piped water is impressive compared with India (see table). The reach of the banking system is better than in India.
MARCIA LEITE, 19, attends a class with her 16-month-old son Pablo Ricardo at a public school in the settlement of Tupa, in Xapuri, in the northern Brazilian state of Acra, on March 17, 2008.
Most of Brazil is administered through lively municipalities that are functional bodies with proper administrative infrastructure, including staff, buildings, furniture and computers. The municipalities are also given financial incentives for the proper implementation of federal programmes.
It is important to bear in mind these basic differences between India and Brazil while designing food and nutrition programmes or poverty reduction policies in general. In Brazil, these issues came to prominence when Luís Inácio Lula da Silva came to power in 2003, when poverty, hunger and nutrition afflicted less than one-tenth of Brazilians. In 2003, Lula's government emphasised that Brazil was a country with intolerable inequality. The problem of deprivation was concentrated in such a small segment of the population that it tended to be ignored. His government sought to put the spotlight on them, with the resolve to eliminate such deprivation.
In India, by contrast, the problems of poverty, ill-health, under-nutrition and illiteracy remain pervasive – and perhaps because of being so pervasive, they seem to be tolerated.
Social Security in Brazil
In spite of the fact that the size of the problem in the two countries is different, Brazil's achievements in the past 10 years have been commendable. Indeed, reaching out to the most deprived groups tends to be the most difficult part of the battle against poverty and hunger. This section describes some aspects of Brazil's successful strategy to deal with this leg of the journey.
A UNIVERSAL ACCESS popular restaurant serving meals at the rate of one Brazilian real (Rs.30). The day's menu was fish, chicken sausage, beans, salad, fresh fruit juice and a fruit.
Whenever I mentioned my interest in Bolsa Familia in my discussions, the first thing that people told me was that Bolsa Familia was just one among a range of interventions by the government. Isis Ferreira and Marcelo Saboia, who work at the Ministry of Social Development, said that Fome Zero was a strategy and Bolsa Familia was one programme of that overall strategy. In fact, health, access to water, higher minimum wages are all seen (and rightly so) as essential to achieve food and nutrition security.
In general, the reach and quality of basic services are quite high in Brazil. As the table indicates, Brazil spends nearly 10 per cent of its gross domestic product (GDP) on education and health. India's public expenditure on health and expenditure pales in comparison, barely crossing 5 per cent of the GDP. The higher levels of expenditure are visible on the ground as well. In Formosa, we visited a public health centre (PHC) which serves a population of 4,000. It has 13 field health personnel, a general doctor, a nurse and a dentist. Similarly, access to schooling is impressive; for a total population of 100,000 the district has approximately 60 government schools.
Brazil has an extensive network of social protection programmes. The range of schemes is mind-boggling: a “food basket” programme (providing fresh food); popular restaurants (which provide nutritious meals at one Brazilian real (BR) per meal); a new “food bank” programme (which procures perishables from farmers); a programme for the eradication of child labour (PETI – not just for child labourers but also for children vulnerable to child labour); a housing programme; youth shelters for children from battered homes; and a programme of “entertainment” for the elderly. The municipalities also seem to play a role in the formation of cooperatives and run skill development and training programmes (hairdressing, manicure, and so on) for some Bolsa Familia beneficiaries.
Many of these are now legal entitlements – there is a law for a unified health system (1990), a law on social assistance (1993), a basic income and citizenship law (2004), and, of course, the food and nutrition security law of 2006 and the long-running school meal programme (enacted as a law in 2009).
What seems to be really special about Brazil's battle against poverty and deprivation is an “intensive care” approach whereby every needy person receives personal attention. In 2001, Brazil introduced the Cadastro Unico, a single registry that allows people to come forward and register for various government programmes. People register at their local municipal office by filling a detailed 10-page booklet, which helps the administration “diagnose” the problem and make a customised prescription for each family. Some families may require only income support through Bolsa Familia, while others may require food assistance; children from vulnerable families may need to be enrolled in the programme for the eradication of child labour.
The intensive care approach, operationalised through a network of CRAS (Referral Centre for Social Assistance), has been possible for two reasons: one, it is focussed on the most deprived sections of the population and, two, Lula's regime since 2003 came with the political will to deal with the problem.
Cash transfers
In this larger frame of social interventions, it was not easy to tell whether Bolsa Familia was the most important intervention though it certainly has the largest budget (0.5 per cent of GDP in 2006) and is widely appreciated as a successful intervention. Bolsa Familia assistance is based on self-reported income. It is supposed to be given to any family whose per capita income is below BR 70 a month and to those families with children whose per capita income is above BR70 but below BR140.
It seems well recognised that those in the informal sector have variable and uncertain incomes and that there will be periods when their incomes exceed the Bolsa Familia cut-off and other times when the family earns nothing. For that reason, families are allowed to stay in the programme for at least two years regardless of what happens to their income over this period.
Brazil has a large formal sector (approximately 60 per cent), and when people enter employment in the formal sector, their employment and wage information is uploaded on to the registry of the Ministry of Labour. Every two years, the Cadastro Unico database is updated and cross-checked with the Ministry of Labour to ensure that ineligible persons do not get Bolsa Familia cash transfers. Those in the formal sector are covered by social security benefits such as retirement pension, survival pension, sickness benefit, and unemployment benefit.
Bolsa Familia includes an unconditional cash transfer component as well as a conditional transfer component, which is tied to school attendance and immunisation of children. Initially, benefits were provided for up to three children; this limit has now been relaxed and benefits are given for up to five children. Since school attendance and immunisation are close to universal in the first place, the conditionalities are easily met in most cases. When they are not, remedial action is supposed to be taken – discontinuing the transfers is the “last resort”.
THE REFERRAL CENTRE for Social Assistance (CRAS) in Lauro da Freitas municipality where those in need of assistance come to register their names.
The popularity of Bolsa Familia became clear from my interview with Hilma, a class 8 graduate, currently a Bolsa Familia beneficiary. She lives in Formosa, 80 kilometres from the capital, Brasilia. Her husband is a truck driver with an irregular income. I asked her what she felt was the most significant about getting Bolsa Familia money. She said it was the financial autonomy. Earlier, when she wanted to buy things for her children (she has three daughters), she had to “beg” her husband for money. Now, she is free from that dependence on him. Her mother had been a beneficiary of the programme when she was growing up, so she is accustomed to such assistance. Initially, she spent all the money on food. She was under the impression that nothing else was allowed. Then she enquired at the local municipality office and was informed that she could spend the money as she liked. She now spends some part of it to buy milk and other food items, clothes and schooling material for her girls, but most importantly, over the years she has bought a cooking range, a refrigerator and a sofa set.
Emerging from a long period of dictatorship, Brazil adopted its Constitution in 1988 and immediately began the task of building a welfare state. A strong and comprehensive legal framework, political priority to the issue, allocation of adequate financial resources and public mobilisation have all contributed to Brazil's impressive achievements in this field in the past two decades.
The author would like to thank Saloni Chopra, Jean Dreze, Marcelo Saboia and Fabio Verras for their helpful comments.