The disputes over emergency coronavirus benefits in Brazil and Argentina

With the profound economic impact of the coronavirus pandemic, emergency wealth transfer policies have popped up in both Brazil and Argentina. While providing much-needed breathing room to vulnerable populations, they have also shown the size of the challenges South America’s two largest economies will face in the post-Covid-19 financial recovery stage.

According to data from Brazil’s federal government transparency platform, around 66 million people received the administration’s emergency aid benefit in July, comprising a BRL 600 (USD 107) monthly payment to the unemployed, informal workers, individual micro-business holders, and beneficiaries of the Bolsa Família cash-transfer program. Single mothers are entitled to a double payment of BRL 1,200 per month.

Before the Covid-19 pandemic, Bolsa Família was the most prominent wealth distribution initiative in Brazil, created back in the early 2000s by the Luiz Inácio Lula da Silva government and credited with bringing millions out of extreme poverty. Now, the sheer reach of the coronavirus emergency aid leaves the world-renowned Bolsa Família scheme to shame. Data from the National Household Sample Survey Covid-19 (PNAD Covid-19), carried out by the Brazilian Institute of Geography and Statistics (IBGE), shows that 44 percent of Brazilian households have at least one individual receiving the benefit, a rate that drops to just 4.6 percent for Bolsa Família.

In short, this shows the eye-watering number of people in Brazil who previously didn’t depend on government income-transfer programs, but now require such policies to survive the economic impact of the Covid-19 pandemic.

According to Lauro Gonzalez, the coordinator of the Center for Studies in Micro-finance and Financial Inclusion at think tank Fundação Getulio...