The new reality imposed since the beginning of the coronavirus pandemic —with the most vulnerable families having to face the combination of high unemployment and increased poverty and hunger— will demand even more efficiency of programs to fight poverty.
The topic was discussed this Thursday morning (18th) during the webinar “How to face inequality and poverty”, organized by sheet and by the Ibre FGV (Brazilian Institute of Economics, of the Getulio Vargas Foundation).
The event included the participation of Vinicius Botelho (doctoral student at Insper), Fernando de Holanda Barbosa Filho and Fernando Veloso (both researchers at Ibre). The debate was mediated by journalist Fernando Canzian, a special reporter for the newspaper.
In the current scenario, rising inflation, which is even more cruel to low-income families, high unemployment in the last five years and low growth prospects for the Brazilian economy make it even more necessary to adopt programs and initiatives to reduce of poverty.
Veloso criticized, however, the maneuver carried out to increase the value of the benefit after the replacement of Bolsa Família by Auxílio Brasil —which began to be paid on Wednesday (17)— after the approval of the PEC (proposal to amend the Constitution ) of the Precatório and changes in the spending ceiling.
“Obviously, the issue of court orders is a default. The change in the spending ceiling, with the new index, in addition to generating legal uncertainty, weakens the only fiscal anchor that remains for us”, he assessed.
He said he believes that current factors, such as the dramatic acceleration of inflation, according to the government’s own forecasts, prove that the new program has already caused enormous damage.
The researcher also criticized the possibility of changes in the precatório and the spending ceiling to boost the so-called rapporteur’s amendments (used in political negotiations), the electoral fund and the proposal to create programs with other objectives, such as helping truck drivers.
“The images of the lines of families trying to receive the Brazil Aid show the confusion and insecurity that were generated. The social program that was supposed to solve ends up bringing more insecurity,” added the analyst.
The Netherlands, in turn, recalled that the fiscal problems of recent years ended up being reflected in the weakness of the labor market. Thus, with each new crisis, the level of unemployment rose and poverty grew, increasing the need for efficient income transfer programs.
“The service sector linked to families has not yet returned to what it used to be, and some of the jobs that were destroyed may never be recovered. How to get those people who have been unemployed for more than two years back in place?”
Regarding the demand for more programs in line with the former Bolsa Família, Botelho added that the current programs have been working below expectations, from the point of view of overcoming intergenerational poverty.
“If we look at increasing levels of learning and income, the results are very ambiguous. On the one hand, there is a view that there is still a poverty trap, which places families in a situation of extreme deprivation and ends up causing poverty is perpetuated.”
The researcher adds that the new program needs to focus more on improving household registration processes, using the information more intelligently, to design better policies to overcome poverty.
Veloso also recalls that Brazil has not fully recovered from the 2015 and 2016 recession, and that this biennium has had profound consequences on the job market. “And not only in Brazil, recurring crises leave marks that last for ten years, according to a World Bank report.”
Given that unemployment will remain high, with projections that this scenario will last until 2026, it is necessary to think about how to increase employability and protect people, said the economist.
“Without economic growth, there is no social program that will solve it”, provoked Canzian.
Holanda added that there is a mass of people who occupied a job that ceased to exist with the pandemic. This increases the need for a focused program that can reintroduce people into the workforce.
“There is nothing that generates employment other than economic growth. We usually look for shortcuts instead of looking for a structural solution, but one of the solutions would be to seek to improve the qualification programs.”
To reverse this trend, he also stated that it is necessary to seek a public policy for sustainable growth.
“We had the Growth Acceleration Program that did not solve the problem of growth. Public investment is not a shortcut, it is necessary to get good investments, in areas of return and in projects that make sense.”
To allow the continuity of social programs without compromising the fiscal issue, Veloso also assessed that there is room to increase the progressiveness of the tax system.
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