A Development Method that Works?
An anti-poverty scheme invented in Brazil is starting to attract governments worldwide. In Brazil, "Bolsa Familia" offers families making less than 120 reais ($68) per head per month 95 reais on condition that their children go to school and take part in government vaccination programs. Currently, about 11 million families - a quarter of Brazil's population - receive the benefit. In addition to providing immediate help to the poor, this program aims to break the prevalent culture of dependency by ensuring that all children receive a good education. It does this by making it more profitable for children to attend school than to stay at home and work. In Alagoas, one of Brazil's poorest states, there have already been many encouraging signs. School attendance has risen both within the state and throughout the country. Furthermore, Bolsa Familia has also helped to push Alagoas' rate of economic growth above the national average, reducing income inequality. Although only 30% of Alagoas's labour force of 1.3m has a formal job, more than 1.5m of its people had a mobile phone last year. According to Aloizio Mercadante, a senator for São Paulo state, this is proof that the program has helped the poor to achieve "Chinese rates of growth." This consumption boom has in turn helped to spawn new businesses. The main concerns regarding this initiative include:
1. Fraud. The main concern is whether local governments are collecting accurate data on eligibility and enforcing the conditions. According to the World Bank, however, 70% ends up in the pockets of the poorest 20% of families.
2. Some people worry that Bolsa Familia will end up being a permanent program rather than a temporary initiative. Since the program only began in 2003, it is still too soon to tell. However, this will depend in large part on the success of Brazil's public school system.
3. Bolsa Familia is sometimes equated with straightforward vote-buying. According to the Economist, however, this does not appear to be the case.
Taking these factors into consideration, it appears that Bolsa Familia may prove to be a successful model to export and build upon. For a relatively modest outlay (0.8% of GDP), Brazil is getting a good return. The program has been implemented in many Latin American countries and New York City. It is now on its way to Cairo and Eastern Europe.
For more information, a full article can be found on: the Economist
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