Around 8.6 million Brazilians will no longer be considered poor in 2024, equivalent to the combined populations of Belo Horizonte, Porto Alegre, Recife, Belém and Natal. An additional 1.9 million people – the population of a capital like Curitiba – were lifted out of poverty. Over the past three years, Brazil has made progress in the fight against poverty and inequality, reaching the lowest marks in the historic series begun in 2012. The data released Wednesday by the Brazilian Institute of Geography and Statistics (IBGE) are undoubtedly cause for celebration. But it is necessary to understand whether the causes of this progress are lasting or whether the progress will be temporary.
- Autumn: In 2024, 8.6 million people will emerge from poverty. Misery also falls to the lowest level in the IBGE series
Much remains to be done. The country has 48.9 million poor people, a population larger than that of the state of São Paulo. Inequalities, measured by the Gini index — which ranges from zero (egalitarian society) to 1 (opposite extreme) — have improved, but still stand at 0.5. In South America, only Colombia does worse. In the world, there are not many countries more unequal than Brazil.
To understand recent progress, it is necessary to look at what has happened over the past five years. Created in 2020, Emergency Aid contained the impact of the pandemic on the income of the poorest. Countries at a similar stage of development to Brazil, such as Mexico, have not done anything similar. What initially had an emergency justification quickly became definitive, used as political leverage. Then-President Jair Bolsonaro renamed Bolsa Família Auxílio Brasil and multiplied the value without bothering to measure the effectiveness of spending. Upon taking office, President Luiz Inácio Lula da Silva took over the old name, but, concerned about its popularity, he increased the profit even further.
- Significant gains: The poorest see their income jump by 13% in 2024, while the top of the pyramid only sees an increase of 1.6%
As a proportion of GDP, Bolsa Família spending quadrupled, from 0.4% in 2018 to 1.6% in 2023. The Continuous Payment Benefit (BPC), aimed at low-income disabled and elderly people, reached a record 6.5 million payments in September (at a cost of almost 10 billion reais), up from 5.1 million in the government’s first month (at a cost of 6.7 billion reais). With so much money invested in social programs, poverty and extreme poverty rates have continued to decline. At the same time, more employment opportunities have emerged, thereby increasing the labor income of the poor. October’s unemployment rate (5.4%) was the lowest since 2012, when the IBGE adopted the current criteria.
There is no shortage of reports of fraud or misuse of social programs. With its expansion, Bolsa Família has lost the focus on the poor that guaranteed its effectiveness in the past. In the future, it is unrealistic to believe that it will be maintained under current conditions. It is also unlikely that unemployment will continue to fall at the same rate.
From now on, to progress in the fight against misery and poverty, the government will have to improve existing programs. Social policies are “unbalanced in intergenerational terms,” says Laura Machado, an economist at Insper. Four out of ten Brazilians aged zero to 14 live in poverty. Among the elderly, 8%. This distortion must be corrected. In the case of Bolsa Família, it is possible to refocus attention on those in need, make benefits more equitable in per capita terms, and improve exit rules. Finally, the defeat of poverty will only be sustainable when programs of this nature are no longer necessary.
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