LATIN AMERICA:
Eliminating Poverty at
Low Cost
By Mario Osava*
RIO DE JANIERO (Tierramérica)
- The success of
pioneering efforts to
reduce inequality and
poverty using relatively
few resources has led to
an expansion in Latin
America of direct aid,
targeting the most
vulnerable families,
especially in rural
areas.
Known as "conditional
cash transfer", it
encompasses many
different strategies in
more than a dozen Latin
American countries.
Brazil and Mexico have
truly massive programmes,
reaching 11.1 million
and five million
impoverished families,
respectively, while
Colombia's programme
involves just 1,500
families.
The "Chile Solidario"
initiative, often
included in the same
category, "is not
comparable to other
programmes in terms of
amounts or objectives,"
like Brazil's
"Family-Grant" and
Mexico's "Opportunities"
programmes, said
Verónica Silva,
executive secretary of
Chile's Social
Protection System.
The Chilean programme,
created in 2002, now
covers 290,000 families,
about 40 percent of whom
live in rural areas.
"The proportion of
participants is much
higher in rural zones
(the Chilean population
is around 88 percent
urban), because if you
want to find the poorest
of the poor in Chile,
you have to look for an
indigenous mother who is
the head of a household
in a rural area," Silva
told Tierramérica.
The focus is on extreme
poverty, which affected
5.6 percent of the
Chilean population in
2000, a sector so
marginalised that it
falls outside the social
welfare networks. The
aim is to bring these
families into the fold
with psycho-social
support and a monthly
stipend, which gradually
declines from 28 to
eight dollars over two
years.
The reduction in poverty
and indigence was 20
percent for rural homes
benefiting from the
system, according to the
latest report by the
World Bank, which
provides technical
assistance to Chile
Solidario. Official data
indicate that in 2006,
"for the first time,
poverty rates in rural
areas were below that of
urban areas (12.3 and 14
percent, respectively)."
The World Bank estimates
that Chile Solidario is
responsible for 18
percent of the reduction
of indigence and 35
percent of the decline
in poverty.
Brazil's Family-Grant,
created in 2003 by
joining together several
social programmes
launched in the 1990s,
achieved its goal of
providing aid to 11.1
million families in
2006. It offers between
10.5 and 100 dollars a
month to each family
group, conditional on
children's school
attendance, vaccination,
visits to the doctor,
and adequate nutrition.
The programme achieved a
21 percent reduction in
the gap between rich and
poor between 1995 and
2004 -- an outcome
identical to Mexico's
Opportunities
initiative, according to
the International
Poverty Centre of the
United Nations
Development Programme.
From 1993 to 2006, the
proportion of Brazilians
living below the poverty
line fell from 35.3
percent to 22 percent of
the population.
Family-Grant and the
Continued Benefit
programme, a stipend for
the elderly and infirm,
played "a fundamental
role" in that
achievement, Marcelo
Neri, social policy
expert with the Getulio
Vargas Foundation, told
Tierramérica.
In 2006 alone, 5.8
million people escaped
poverty, as defined by
the official poverty
rate, in this country of
188 million.
Poverty in rural areas
fell from 63.7 to 40.9
percent between 1993 and
2006. Rural retirement
pensions, guaranteed by
the constitution even
for informal sector
workers, today offer the
minimum monthly salary
(245 dollars) to 7.7
million retired farm
workers, which helped
bring about the
reduction.
Brazil’s tax burden
amounts to 35 percent of
gross domestic product
(GDP), similar to that
of rich countries, noted
Neri. But the
Family-Grant provides
the best results with
proportionally lower
costs, of just 0.7
percent GDP, he added.
The Family-Grant
benefits children, in
contrast to pensioners,
and gives a dynamic
boost to the local
economy, expanding the
market for food produced
by small farmers, which
also reduces rural
poverty, Neri said.
Most of the Family-Grant
money that goes to
families is used to buy
food, which promotes
family farming and
smaller local commerce,
said Rosani Cunha,
secretary of Citizen
Income at the Ministry
of Social Development.
Of the families
receiving the grant last
year, 30.8 percent were
rural, a proportion much
higher than the 18
percent of Brazil's
total rural population,
due to the higher rate
of poverty in the
countryside.
The statistics show
higher school attendance
rates, especially in the
north and northeast, the
country's poorest
regions, reducing the
risk of poverty of
future generations and
giving the lie to "the
laziness effect" that
critics had warned of,
Cunha told Tierramérica.
In Pombal, an
impoverished town in the
northeastern state of
Paraíba, a woman who
used part of the grant
to raise chickens and
thus was able to get off
government support,
became an example of
initiatives for exiting
the programme, she said.
Pombal, with 3,710
families receiving the
grant out of a
population of 33,000,
has seen several hundred
families leave the
programme. The city
government is preparing
a poultry farming
initiative involving a
pilot group of 25
families.
The municipal registry,
which includes all poor
families, is "an
important instrument" of
integration and
reinforcement of other
policies, like food
security and housing,
which generates
"synergies", city social
worker Cizia Romeu said
in a Tierramérica
interview.
The Brazilian programme
is notable for its
decentralisation. The
local authorities take
on much of the
responsibility, given
that some of the
conditions for receiving
the grants, such as
school attendance and
health, depend on
municipal and state
governments, explained
Cunha.
But it was in Mexico
that the first programme
of massive conditional
cash transfer was
launched, in 1997, under
the name "Progresa",
later replaced by "Oportunidades"
(Opportunities), in
response to the
1994-1995 economic
crisis.
From 2000 to 2006,
poverty in Mexico fell
from 53.6 to 42.6
percent of the
population, and infant
mortality dropped 11
percent, thanks largely
to the initiative that
began with 300,000
families and today helps
five million in 96,000
marginalised areas, 86
percent of them in the
countryside.
Nevertheless, "it
doesn't seem to have
prevented emigration,
and we don't see a
direct impact on the
rural area’s economic
problems," which are the
result of other factors,
like credit, irrigation
and land quality, but it
has "helped many
families to remain on
their land," according
to Santiago Fernández, a
consultant who evaluates
social programmes.
"The young people end up
migrating," due to
poverty and the
attraction of cities and
the United States, even
though Opportunities
"has provided
improvement in the
situation of many
families, and the
statistics show it," he
said in a conversation
with Tierramérica.
In Colombia, the
"Families in Action"
programme, launched in
2001, has a limited
impact, reaching just
1,500 families, with
subsidies for food and
education of 8.5 to 27
dollars a month,
distributed almost
exclusively to mothers.
But the programme
responds to a unique
facet of Colombian
reality: the population
displaced from rural
areas by the
decades-long armed
conflict. "The benefit
was great, as if it fell
from heaven," said
Fernando Parra,
displaced in 2001 from
the southern department
of Huila, with an
11-member family. He is
now a community leader
in Ciudad Bolívar, a
poor suburb of Bogotá
that is home to many who
have fled the war.
"I like the programme a
lot, but they aren't
taking registrations
now, and many people
need it," lamented
Rubiela Castro, who
lives in Usme, a
district in southeastern
Bogotá.
(*Additional reporting
contributed by Daniela
Estrada in Chile, Diego
Cevallos in Mexico and
Helda Martínez in
Bogotá. Originally
published by Latin
American newspapers that
are part of the
Tierramérica network.
Tierramérica is a
specialised news service
produced by IPS with the
backing of the United
Nations Development
Programme and the United
Nations Environment
Programme.)
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