Today's Article
Instead of socialized
welfare for broken
banks, Brazil's
financial assistance
packages focus on
the poor and are
almost totally
de-centralized.
welfare for broken
banks, Brazil's
financial assistance
packages focus on
the poor and are
almost totally
de-centralized.
The American Spark
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Why Brazil's Economy Grows As Rest Of World Shrinks
By Cliff Montgomery - Nov. 16th, 2008
Brazil is one of the very few countries to still enjoy a relative prosperity during the current global financial
meltdown. Its national economy has extensively grown in the past half-decade, and its poor often have
benefitted most from Brazil's wise fiscal policy.
An increased minimum wage, along with lower inflation and an easier ability to obtain credit, have allowed the
nation's poor to become an engine for economic growth.
These improvements, along with the world's most generous slew of conditional welfare programs from federal,
state and local governments--a primary cause of President Luiz Inácio Lula da Silva--have helped Brazilians to
attain an economic stability they've never before enjoyed.
"The question of poverty is at the forefront of Latin American governments today. The poor are visible again,
and Brazil is playing a leading role in this," Social Development Minister Patrus Ananias recently told The
Christian Science Monitor. Ananias last month made a special trip to Namibia, to aid in a review of the African
Union's social policy framework.
Small rustic towns receive half of Brazil's welfare subsidies. The township of Manari is tucked away in the
province of Pernambuco, near the "backlands," or "sertao"--a forsaken land filled with craggy trees and fields
of dust. Just half a decade ago Manari was the country's least developed town, according to the United
Nations Development Program. A full 57 percent of Manari's population was illiterate, and its average monthly
income was a mere $13--equivalent with Haiti, the Western Hemisphere's poorest nation.
But thanks to the fiscal policies of Da Silva and others, Manari now is enjoying an economic boom. In the last
three years, the little town has built its first health clinic and high school. The government over the summer
finished a modern highway which connects Manari to a major thoroughfare.
The most clear improvement for the townspeople, however, surely is Brazil's monthly cash payments to 3,000
struggling families in the town.
The payments are not mere handouts. Families must actively meet a few clear conditions to receive the aid. If
a family keeps its children in school, gets them vaccinated, and continues to send them to regular health
checkups, that family then receives the much-needed aid.
"We have security now," Dida Santos, who survives in a small one-room house with her family, told the Monitor.
She and her husband had barely kept their family alive on little more than the corn and beans they grew and
the handful of animals they raised.
Now Santos makes weekly trips to the supermarket, and the family has even saved enough money to
purchase its first refrigerator. It was never needed before--the Santos family never had spare food to preserve.
While this welfare program for families--known as "Bolsa Familia"--has greatly aided in reducing the immediate
effects of poverty, the Da Silva government also has recognized that the single greatest aid for the poor is to
create decent-paying jobs, which allow the poor to help themselves.
Da Silva also has helped to usher in more than 8 million new jobs, and he has ensured that those new jobs
actually pay enough to help those who work them. Brazil's president raised the country's minimum wage from
the equivalent of $90 a month to $187 a month--more than doubling the working poor's pay.
It's important to note that such actions have increased both jobs and company profits. In fact, it is Brazil which
now is doing rather well during the current global economic mess, not America.
At a time of great world-wide crisis, poverty numbers are actually dropping in Brazil. Income for the poor has
increased a staggering 22 percent in the last five years. And far from becoming poor themselves, Brazil's rich
have enjoyed a 4.9 percent increase to their wealth during the same period, indicate government figures.
What is the secret to the country's success? Its slew of economic programs constitute the largest--and one of
the most successful--welfare and financial aid packages in the world. But instead of socialized welfare for
broken banks, Brazil's financial assistance packages focus on the poor and are almost totally de-centralized.
Though the federal government issues payments to beneficiaries through a debit card, it's the local and state
governments that actually run the programs. This gives a much greater voice to those actually affected by the
initiatives, and puts the administrative power firmly in the hands of local politicians from each area.
"Many countries are looking to Brazil as an example of how to implement these programs. They are looking at
how Brazil has done this at such a massive scale," Kathy Lindert, a World Bank human development
economist, told the Monitor.
"We are seeing one of the largest, most unequal countries get more equal," she added. It may be a lesson
America now needs to learn.
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark
e-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
By Cliff Montgomery - Nov. 16th, 2008
Brazil is one of the very few countries to still enjoy a relative prosperity during the current global financial
meltdown. Its national economy has extensively grown in the past half-decade, and its poor often have
benefitted most from Brazil's wise fiscal policy.
An increased minimum wage, along with lower inflation and an easier ability to obtain credit, have allowed the
nation's poor to become an engine for economic growth.
These improvements, along with the world's most generous slew of conditional welfare programs from federal,
state and local governments--a primary cause of President Luiz Inácio Lula da Silva--have helped Brazilians to
attain an economic stability they've never before enjoyed.
"The question of poverty is at the forefront of Latin American governments today. The poor are visible again,
and Brazil is playing a leading role in this," Social Development Minister Patrus Ananias recently told The
Christian Science Monitor. Ananias last month made a special trip to Namibia, to aid in a review of the African
Union's social policy framework.
Small rustic towns receive half of Brazil's welfare subsidies. The township of Manari is tucked away in the
province of Pernambuco, near the "backlands," or "sertao"--a forsaken land filled with craggy trees and fields
of dust. Just half a decade ago Manari was the country's least developed town, according to the United
Nations Development Program. A full 57 percent of Manari's population was illiterate, and its average monthly
income was a mere $13--equivalent with Haiti, the Western Hemisphere's poorest nation.
But thanks to the fiscal policies of Da Silva and others, Manari now is enjoying an economic boom. In the last
three years, the little town has built its first health clinic and high school. The government over the summer
finished a modern highway which connects Manari to a major thoroughfare.
The most clear improvement for the townspeople, however, surely is Brazil's monthly cash payments to 3,000
struggling families in the town.
The payments are not mere handouts. Families must actively meet a few clear conditions to receive the aid. If
a family keeps its children in school, gets them vaccinated, and continues to send them to regular health
checkups, that family then receives the much-needed aid.
"We have security now," Dida Santos, who survives in a small one-room house with her family, told the Monitor.
She and her husband had barely kept their family alive on little more than the corn and beans they grew and
the handful of animals they raised.
Now Santos makes weekly trips to the supermarket, and the family has even saved enough money to
purchase its first refrigerator. It was never needed before--the Santos family never had spare food to preserve.
While this welfare program for families--known as "Bolsa Familia"--has greatly aided in reducing the immediate
effects of poverty, the Da Silva government also has recognized that the single greatest aid for the poor is to
create decent-paying jobs, which allow the poor to help themselves.
Da Silva also has helped to usher in more than 8 million new jobs, and he has ensured that those new jobs
actually pay enough to help those who work them. Brazil's president raised the country's minimum wage from
the equivalent of $90 a month to $187 a month--more than doubling the working poor's pay.
It's important to note that such actions have increased both jobs and company profits. In fact, it is Brazil which
now is doing rather well during the current global economic mess, not America.
At a time of great world-wide crisis, poverty numbers are actually dropping in Brazil. Income for the poor has
increased a staggering 22 percent in the last five years. And far from becoming poor themselves, Brazil's rich
have enjoyed a 4.9 percent increase to their wealth during the same period, indicate government figures.
What is the secret to the country's success? Its slew of economic programs constitute the largest--and one of
the most successful--welfare and financial aid packages in the world. But instead of socialized welfare for
broken banks, Brazil's financial assistance packages focus on the poor and are almost totally de-centralized.
Though the federal government issues payments to beneficiaries through a debit card, it's the local and state
governments that actually run the programs. This gives a much greater voice to those actually affected by the
initiatives, and puts the administrative power firmly in the hands of local politicians from each area.
"Many countries are looking to Brazil as an example of how to implement these programs. They are looking at
how Brazil has done this at such a massive scale," Kathy Lindert, a World Bank human development
economist, told the Monitor.
"We are seeing one of the largest, most unequal countries get more equal," she added. It may be a lesson
America now needs to learn.
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark
e-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
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