Millions to return to poverty in Brazil if government stops emergency handouts: Study

Over 67 million Brazilians received emergency cash transfers from the government during the COVID-19 pandemic, which helped alleviate the impact of the crisis. The end of these emergency handouts may send at least 15 million people back to poverty, a study says. Due to the government’s initiative, poverty in Brazil fell to a historic low of 50 million people this year. While the authorities want to keep parts of the scheme, there are concerns about its cost.

President Jair Bolsonaro's efforts have been stalled in Congress, due to disagreements even among his supporters over how to fund the programme without breaking a spending cap amid worries about the country's budget deficit. The president, who came to office last year with an agenda of austerity and reforms, rose to popularity because of the handouts introduced in April which are due to end in December.

They started giving out $107 to the poor, with an estimated cost of $57.6 billion to the government Treasury. At least 44% of Brazil's households have received these payments. Most of the handouts were given in the northern and north-eastern regions, which have the highest levels of poverty in the country. Anyone living on less than half of the minimum wage i.e. $93 is considered poor.

READ | Brazil's Grinding Poverty Worsens During Pandemic

READ | Brazil’s Poor Squeezed By Less Virus Aid, Surging Food Costs

Poverty levels to increase

Starting this month, the government has halved the amount of its monthly emergency cash transfers initiated to help the poor to withstand the hardship of the economic meltdown. Brazil was the only country in Latin America that had the most generous handout programme this year but it was not the one with the best fiscal conditions. Levels of poverty and extreme poverty are expected to rise in many other Latin American countries where economies have been badly affected by the pandemic.

READ | Brazil Reaches 150,000 Deaths From COVID-19 Milestone

Meanwhile, the pandemic in Brazil appears to be easing in recent weeks. Shops and other businesses have started to reopen amid fears of a rise in unemployment as the country is likely to face a deep recession.

Brazil, which has a population of 212 million, is one of the world's worst-hit countries by Covid-19. Around five million cases have been confirmed with nearly 149,000 deaths due to the disease, the health ministry says. Official numbers suggest women and African-origin people are the most affected.

READ | Brazil Strains At Quarantine As Virus Cases Pass 5 Million