HOW TO ELIMINATE POVERTY IN BRAZIL

Fernando Alcoforado*

This article aims to present strategies that would allow us to solve one of the largest scourges experienced by the Brazilian population in the history of Brazil that is extreme poverty. In Brazil, in 2019, the number of people in poverty increased to 54.8 million, according to IBGE. It also increased extreme poverty in Brazil when the monthly income is less than R$ 140, according to the line proposed by the World Bank. In 2016, 13.5 million (6.6% of the population) were in this range. In 2017, this index jumped to 7.4%, or 15.2 million living in extreme poverty.

Figure 1 presents the evolution of the number of Brazilians in extreme poverty. The analysis of Figure 1 shows that the downward trend in extreme poverty ended in 2014 and grew from that year onwards.

Figure 1- Evolution of the number of Brazilians in extreme poverty

Source: BRASA

Figure 2 presents the evolution of the unemployment rate from 1995 to 2020, which presented a decrease from 2001 to 2014 and growth from 2014.

Figure 2- Evolution of the unemployment rate (%)

Source: Valor Econômico

Comparing Figure 1 and Figure 2, it appears that, in the period 2001-2014, the number of Brazilians in extreme poverty has a drop in the same way as the evolution of the unemployment rate. From 2014, the number of Brazilians in extreme poverty is growing in the same way as the unemployment rate grows. It can be said that there is a perfect correlation between the number of Brazilians in extreme poverty and the unemployment rate. This means that as much as there is a larger number of unemployed people in Brazil greater is the occurrence of extreme poverty. This also means that the first action to combat poverty consists of eliminating unemployment in Brazil.

In our article “How to eliminate unemployment in Brazil” posted on 10/05/2022on the website <https://www.academia.edu/79047031/HOW_TO_ELIMINATE_UNEMPLOYMENT_IN_BRAZIL&gt;, we suggest that “to eliminate unemployment, we must reactivate the Brazilian economy with the abandonment of the disastrous neoliberal economic model and its replacement by the national developmentalist model with the government becoming an active agent of the development process promoting the reactivation of the Brazilian economy, encouraging the development of the social and solidarity economy and the creative economy to generate jobs and increasing investments in education to restructure the Brazil education system to continually prepare and update people for the current and future job market”.

In addition to seeking to eliminate unemployment, it is necessary to be additionally adopted urgent social strategies to eliminate poverty in Brazil that was further aggravated during the Bolsonaro government. It´s urgent the adoption of measures aimed at social assistance to the unemployed, the provision of social assistance guaranteed to homeless populations and the overcoming of the endemic hunger suffered by the Brazilian population, as well as the creation of conditions for the poor population of Brazil to have access to their own home with the necessary infrastructure, especially basic sanitation. It is urgent to adopt measures to help all the social disinherited that have been abandoned by the Brazilian government, especially in recent years.

Social disinherited are the unemployed who totaled 12 million Brazilians today, too, the underused population, that is, the unemployed who work less than they could and the discouraged people who could work but no longer seek jobs, reaching 4.8 million people. Other social disinherited are the 34.7 million people in informal work, that is, workers without a formal work card, corresponding to 40% of the labor market, according to the National Household Sample Survey (continuous PNAD). Other social disinherited are the poor who earn 35 times less than the rich, according to the National Continuous Household Sample Survey (Continuous Pnad).

The main social disinherited are the population that is located in poverty and extreme poverty that, in Brazil, according to the latest IBGE data, corresponds to 54.8 million inhabitants of which 15.2 million people are in extreme poverty situations. Other social disinherited are also homeless people in Brazil who are approximately 221,869 people according to the Institute of Applied Economic Research (Ipea). Brazil’s social disinherited are also those who do not have houses that do not enjoy the right to housing that totaled 5.8 million houses in 2019, of which 79% focused on low-income families.

The most urgent social strategy should seek to serve the Brazilian population situated in poverty and homelessness with the policy of transfer of income or universal minimum income to the population that is one of the solutions to mitigate poverty. This idea is not new. Friedrich August von Hayek, an Austrian economist and philosopher, later naturalized British, considered one of the greatest representatives of the Austrian School of Economic Thought, was the proponent of this idea when he published between 1973 and 1979 his work “Law, Legislation and Liberty” (Routledge, 1988). The neoliberal income transfer program of Lula and Dilma Rousseff governments in Brazil, Bolsa Familia, is an example of the application of Hayek’s basic income policy.

Rutger Bregman’s book “Utopia for Realists” (London, New York: Bloomsbury Paperbacks Publisher, 2017) shows that giving money for everyone, ie a universal minimum income program would make it possible to mitigate or eliminate poverty. Among the advantages that he points out that this idea comes true, lies in the fact that distributing money decreases crime, improves the health of the population and allows everyone to invest in themselves. Another advantage not pointed out by Bregman is that distributed income to the poor population contributes to increased consumption and growth of the economy.

According to Bregman, a major obstacle to putting into practice the basic income policy for the poor population is the understanding of many people that, giving the minimum of income to survive, people would become lazy. Bregman’s belief is that the minimum income will be as a ‘venture capital’ (investment for startups) for the people giving everyone the opportunity to take risks. This will generate a wave of entrepreneurship. Bregman is a defender of money utopia for all and not just for the poor. In the book quoted, Bregman cites a number of successful examples of how homeless people, Indians and populations in vulnerable regions developed in the United States when receiving money without ordering anything in return. For him, it will be better with less bureaucracy and not establishing requirements.

The basic income program should be universal when expanded to become a right of all citizens, not a favor, says Bregman. The theme of basic income or universal minimum income has been gaining strength in Silicon Valley, the main technological hub of the United States, as production systems are advanced based on artificial intelligence and automation that increase the fear that they will eliminate a series of jobs. In the book “Utopia for Realists”, Bregman states that all the great achievements of civilization, such as the end of slavery, the universal vote, the rights of women, were utopias at some point that came true.

The adoption of basic income policy or universal minimum income for the poor population is one of the most effective solutions to mitigate poverty, since it would allow the poor to have money to face their basic needs in terms of Food, health, housing, etc. It is important to note that poverty is the condition of those who are poor, that is, one who does not have the basic conditions to guarantee their survival with quality of life and dignity. By having a basic income, the poor population will be able to meet their basic needs. It should be noted that an individual acquires the condition of poverty when he does not supply his basic needs because his income is not sufficient and does not have income because he is unemployed or does not have income because he is not able to exercise any productive activity. In short, poverty results from the fact that the individual does not have enough money to face their basic needs.

The basic income policy for the poor would bring numerous advantages such as the reduction of crime, improvement of the conditions of housing of the poor population and increased consumption of goods and services by the poor population. The government, the provider of basic income for the poor population, would have the benefit of less spending on police repression and prison structure because of the reduction of crime and homeless people and the increase in tax collection resulting from the increase in consumption of Poor population. It is important to note that the thesis of basic income for the poor population is quite questioned because there is a widespread anachronistic conception that no one should have income without working. It is, however, a conception that should not be considered in a conjuncture as the current one where employment offer does not supply the needs of the population and the poor population grows vertically in Brazil.

Based on the above, to eliminate poverty, the first action to be implemented consists of eliminating unemployment in Brazil, complemented by the adoption of the basic income transfer strategy or universal minimum income for the poor population, especially those located in extreme poverty and in street situation. There will be no social peace in Brazil if unemployment is not eliminated and a basic income policy for the poor is not adopted. Therefore, it is urgent to adopt the strategies proposed here to combat existing poverty in Brazil. These strategies should serve as a reference for the Brazilian people to choose their candidates for the various elective positions in the next elections. It is recommended to elect candidates who assume the commitment to defend the adoption of the strategies proposed here to eliminate poverty in Brazil.

* Fernando Alcoforado, 82, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, the SBPC- Brazilian Society for the Progress of Science and IPB – Polytechnic Institute of Bahia, engineer and doctor in Territorial Planning and Regional Development from the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning, urban planning and energy systems, was Advisor to the Vice President of Engineering and Technology at LIGHT S.A. Electric power distribution company from Rio de Janeiro, Strategic Planning Coordinator of CEPED- Bahia Research and Development Center, Undersecretary of Energy of the State of Bahia, Secretary of Planning of Salvador, is author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019) and A humanidade ameaçada e as estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021) .