Bolsonaro speeds up payments to the poor as election looms
The new ‘presidente da Cidadania’ (street-president) of Brazil, Jair Bolsonaro, has just been installed as the candidate for the presidency of the Brazilian Republic. He is a right-winger who has promised to cut the government budget.
His electioneering talk has been a little different. Bolsonaro has said he will implement a new payment scheme for poor Brazilians. It is expected that those on the lowest rung of the Brazilian social ladder will receive 70 per cent of the money for any new goods and services they use.
On Sunday, Bolsonaro’s office confirmed that the payment scheme is in the works. He said that from this point on, Brazilians will receive their “bolsa de valores” (wallet) by direct deposit. This means that the poorest will actually get the cash, which would be in US dollars, in their bank accounts on Monday.
Bolsonaro also reiterated that Brazilians will pay more for food and services. “Every Brazilian will pay 15 per cent at the beginning … later, 50 per cent. From then on, 20 per cent. That amount will grow by 50 per cent each week,” he said.
The payment scheme for the poor, or Bolsa Família, has been in the works for some time. This comes after reports of an increased interest rate in the country’s banking system. This was to be offset by the 50 per cent increase in people’s real income, the equivalent of 2.5 per cent, to be paid to the poorest Brazilian families.
This means the government will have to come up with the money to cover the interest costs due for the new interest rate to be paid by the bank. Brazil’s economy, which grew by 2.6 per cent in 2017, has suffered from a slowing down in consumer spending. The government’s plans to raise the minimum wage to a level of $10 per day would raise consumer spending to a new record high of 3.9 per cent of GDP, but this would still leave the economy with a record low rate of growth of over 1 per cent.
Bolsonaro has also made the Bolsa Família payment scheme a key plank of his election bid.