The economic team of President Jair Bolsonaro took office preaching the reduction of the state’s role in financial matters and cutting back spending in myriad areas. It came as some surprise, therefore, when ultra-liberal Economy Minister Paulo Guedes announced last week the creation of a broad cash transfer program entitled Renda Brasil (Income Brazil), billed as an extended version of the globally lauded Bolsa Família program. However, specialists see severe contradictions in the social welfare plan, speculating that the announcement may be an empty political ploy.
The announcement of the Renda Brasil program came as Mr. Guedes declared the government’s emergency coronavirus aid plan would be extended for a further two months, with the value of the benefit cut in half. In response to the pandemic, the administration paid a BRL 600 (USD 116) monthly salary to low-income and informal workers for three months, and the Economy Minister declared his intention to extend this program for two more months, with the base payment dropping to BRL 300. The change requires congressional approval.
Though it was initially reluctant to hand out money to low-income Brazilians — Mr. Guedes instead called for macroeconomic reforms and suggested cash transfers would discourage recipients from wanting to return to work — the government quickly realized that the program offered them significant, albeit temporary, electoral gains.
Despite the president’s approval ratings tanking among wealthier Brazilians, his overall popularity has remained stable, largely due to support from informal workers receiving the emergency coronavirus salary. With this allegiance tied to the receipt of a monthly benefit, the government is now moving to continue payments of a program it opposed in the first place.
Social welfare, or a PR exercise?
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