The discussion around Universal Basic Income has gained plenty of steam over the 2010s. Strictly defined as an unconditional sum of money paid to all residents of a country, UBI (as it is commonly known) has taken on a number of different faces and meanings as several nations around the world begin to experiment with it. Unsurprisingly, Brazil, with its vast population and harsh levels of social inequality, has not been far from the conversation, as seen by an independent study being held in São Paulo state.

In the impoverished rural village of Quatinga Velho, NGO Instituto ReCivitas has been carrying out its own basic income pilot since 2008. The researchers paid a monthly sum of BRL 30 (approximately USD 12 at the time) to each resident who volunteered for the program, all the while following up on their progress in weekly visits and monthly assemblies.

After suspending the program for a year due to lack of funding, ReCivitas continued its experiment in 2016, this time paying BRL 40 per person per month.

Though the figures are small—living on BRL 40 a month is unrealistic even in the most desperately impoverished parts of Brazil—the money allowed the NGO to study the effects an unconditional monthly stipend could make on the lives of residents of the poor community.

The project’s leaders, Bruna Augusto and Marcus Brancaglione, came up with the idea after living in the nearby village of Paranapiacaba and realizing that with little resources, they could provide a basic wage to the residents of Quatinga Velho which would make a difference. “We weren’t just looking for an isolated community,” says Mr. Brancaglione. “instead [we were looking for] one which had been practically abandoned by the state.”

During the experiment, the organizers told The Brazilian Report that they stopped being “mere observers” and began to really “see, understand and feel” the problems in Quatinga Velho. “We saw that the old adage of teaching someone to fish instead of giving them a fish was just a load of old rubbish,” they said. “It’s a tale for people who’ve never seen a fish or fished themselves.”

Assessing Quatinga Velho’s basic income experiment

The results so far have been positive. While the money is mostly used on food and clothes, as expected, the monthly stipend has caused an apparently improved outlook on life for the Quatinga Velho residents. “We noticed that people started to speak about the future of their children a lot more,” says Mr. Brancaglione. “There is a lot more hope in regard to opportunities and possibilities.”

In fact, over 70 percent of residents reported that their perspectives on the future had changed positively with the advent of the basic income project, with the same percentage believing the program encouraged more participation of the community.

Despite being lauded as a basic income pilot, however, due to the small amounts offered by the Quatinga Velho project it cannot fall under the traditional goal of UBI, which is to provide all residents with a basic living wage, regardless of conditions. It is in fact more in line with Brazil’s existing Bolsa Família program, the cash transfer policy instated by the Workers’ Party government in 2003.

Brazil's basic income experiment

One of the most vociferous advocates for a genuine UBI in Brazil is former Senator Eduardo Suplicy, who authored a bill signed into law in 2004 that makes it the president’s responsibility to implement a basic income for all citizens. Bolsa Família is seen as being the “first step” towards a Brazilian UBI, but no further progress has been made in that direction.

In fact, despite the discussion around the topic, there are no genuine Universal Basic Income projects in existence anywhere in the world. 

Brazil's basic income experiment

Universal basic income around the world

In the U.S. state of Alaska, residents are paid a partial basic income from a permanent fund fed by revenues from oil mining. As it is neither a living wage nor a fixed amount (varying in accordance with the interest on oil revenues), it does not fall under the umbrella of UBI.

Finland launched a two-year basic income pilot scheme in 2017, by which 2,000 people on unemployment benefits were randomly selected to receive an unconditional monthly income of EUR 560 every month, regardless if they find paid work or not.

Reaction to the Finnish pilot has been mixed. As the program does not offer any cash increase (the monthly income is the same as the selected people would have received on unemployment benefits), it does not constitute a living wage. It has also been criticized as being a ploy by the right-wing government to go after benefit fraud.

The Netherlands has come slightly closer to large-scale experimentation with UBI, yet once again only offering it to those currently receiving social welfare benefits. The city of Utrecht led the way with its own pilot program, with another 30 Dutch municipalities now looking to follow suit.

In comparison to these experiments, Brazil is actually quite far ahead in the road towards a UBI. Bolsa Família has been a fixture of Brazilian life for 15 years now, and shows no signs of being rolled back. However, with an overwhelming deficit and Chicago School graduate Paulo Guedes about to be handed the reins to the economy, it is unlikely any progress will be made soon in the transition from conditional cash transfers to anything resembling a Universal Basic Income.

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MoneyNov 13, 2018

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BY Euan Marshall

Euan Marshall is a Scottish journalist living in São Paulo. He is co-author of A to Zico: An Alphabet of Brazilian Football.