State of Insecurity

Reading and reviewing the article, “State of Insecurity: Everyday Emergencies, Public Secrets, and Drug Traffickers Power in a Brazilian Favela” a perspective on the lives of the favela population with the emergence of drug trafficking is shared. Drug trafficking, from the outside takes on the roll of “illegal” and “informal” jobs that threaten the security of Brazil but have manifested into more of a coat of protection and a way of life in many favelas of Rio De Janeiro.

The Brazilian’s states inability and failure to to provide safety in favelas has allowed for drug traffickers to engage and assume the role of “local security” and enforcers of social norms. All of these services are expected of drug traffickers, as stated in the article. The complicity and silence of the favelados must be maintained in this social contract in exchange for the safety and security.

“Rather than being a force that upholds the law, Rio’s police have, since their inception, been charged with enforcing public order”

The article goes on to describe certain cases of favela sectors of Rio de Janeiro and the past experience. the stories continue to demonstrate and have overlapping themes of “respect” for the population of favelados and how it determines their safety, and also the law of silence which is a social norm within favelas such as Caxambu. The questions that are raised are “who defines security or insecurity?” and how are favelas answering these questions.

For the complete article
 Ben Penglase- States of “Insecutrity”

Economic orthodoxy + social spending = success??

This past Thursday, I attended the Bildner Center lecture “China’s Engagement with Latin America: A US Policy Perspective.”  Daniel Erikson (Senior Advisor for Western Hemisphere Affairs, US Department of State) commented on how Brazil is benefitting from a boom in commodity exports, specifically soy and steel, due to the demand from China’s booming market.  This is interesting because in part, it suggests a return to the export led growth model which dominated Latin American economic policy before 1930.  However without the use of countercyclical measures during booms (recall this growth model was known for the boom-bust cycle), Brazil remains vulnerable to demand shocks in China’s market.  Erikson stated that all analyses suggest China’s growth will continue in an upward trend for the foreseeable future, however I am skeptical that it can remain this way forever (“doomsday will eventually come,” as Mauricio Font commented).  While I hope Brazil can benefit from China’s market in the meantime, I worry about the series of events so often seen in Latin American history: growth via dependence on a small number of primary good exports, a negative demand shock for these goods leading to a collapse in the exporting economy, increased yet unsustainable government spending financed through the printing of money resulting in large debts, inflation, and typically, austerity programs imposed by the IMF.

This brings up an important point I’ve noticed in reading about economic and social policy.  Economic growth, unaccompanied with social programs, produces inequality.  As Max Fraad-Wolf explained in a lecture at The New School on poverty and human rights (10/27/2011), “ Capitalism successfully produces wealth just as efficiently as it produces poverty.”  This is because competition under a capitalist system means one person’s advancement is due to someone else’s decline (a zero sum game) and the market mechanism allots more to those that have lots and little to those who have little (purchasing power).  However, social spending can not be done in a sustainable manner, one that is not inflationary and debt-producing, without economic growth.  It should also be noted that although austerity programs/economic orthodoxy can be successful in stabilizing economies, it is uncommon to witness substantial economic growth during these periods.  Thus it seems there is a fine line to walk in balancing economic growth and social spending.

On a side note, Santiso suggests such social spending, or redistributive policies as he refers to them, may be fundamental in maintaining democracy in Latin America.  He cites that “the probability of the ‘death’ of democracies was one in twelve in countries with per-capital income below $1,000 and one in 60 cases of per-capital income exceeding $6,000…beyond which the possibilities of the survival of democracy are greater, going up when the differences in income are narrower” (135, Lula Light).  Santiso suggests that it is the combination of fiscal austerity, tight monetary policy and social activism (and absence of ideological purism) that made Lula such a successful president of Brazil (Ch. 5, Lula Light).

Bolsa Família

What it is: The Bolsa Família program is a system of conditional cash transfers, giving money to families if certain conditions are met such as sending kids to school or taking them to a health care facility.  Emergency assistance is also provided temporarily; the conditions seek to ensure “longer-term investments in human capital.”

Bolsa Família consolidates four social programs, reducing administrative costs and bureaucratic complexity, standardizing results and methodology,  and eliminating redundancies.  These four programs were: Bolsa Escola (Ministry of Education), Bolsa Alimentação (Ministry of Health), Cartão Alimentação ( Fome Zero), and Auxílio Gas (Ministry of Mines/Energy), promoting schooling, health care, food consumption and reduced dependence on government subsidies, respectively.

Objectives: The Bolsa Família program seeks to reduce current poverty and inequality in Brazil and to reduce future poverty and inequality through the building up of human capital.  Thus there exists a quantitative aspect – bringing more people into the safety net – and a qualitative aspect – improving the well-being of the beneficiaries.  Bolsa Família also aligns with some of the Millennium Development Goals (see pg. 68 for specifics).

Bolsa Famliia targets the family unit as the receiver of the conditional cash transfer as opposed to the individual unit.  Payments are made to the mother of the household since studies show she more than others will prioritize investments in her kids (i.e. education, health)

How it targets the poor: “By design, Bolsa Família identi- fied two target groups – the “extreme poor” (families with a per capita income of less than US$17 per month) and the “moderately poor” (families with a per capita monthly income between US$17 and $34). De- pending on the household’s composition and income, the program provides cash transfers ranging from US$5 to $33 (the average is US$24). These amounts were set, in part, to minimize the number of people who might lose benefits from previous programs. On a per capita basis, the average transfer per beneficiary represents about 6 percent of the minimum wage and 19 percent of the poverty line used by the World Bank.” (68).

Donor support: This program has support from the World Bank, the UNDP and the Inter-American Development Bank (see page 69 for SWap –sector wide approach – details: ex. intertwinement of effective implementation – widening the social net – and technical activities of monitoring and evaluation; incentives to exceed milestones, ex. loan’s financing percentage increases).  It uses a results-based approach in which technical milestones are linked to disbursements.

Challenges: a monitoring and evaluation that doesn’t just provide data but actually useful feedback on the quality of the service (coverage is one thing, quality of delivery another); reducing fraud (they are actually publishing names of beneficiaries by municipality on the Internet and setting up a hotline in which people can report suspected fraud).

Results achieved and expected:“Since its launch in December 2003, the Bolsa Família Program has grown exponentially, expanding by January 2005 to cover 26.6 million people. By the end of 2006, the program expects to cover about 44 mil- lion people. Translated as intermediate results in the results-based framework, this means:

• At least two-thirds of extremely poor families will be receiving Bolsa Família income transfers.
• At least 40 percent of total transfers will be going to families in the bottom quintile of income distribution.
• At least 80 percent of primary school–age children in extremely poor beneficiary families will be at- tending school.
• At least 95 percent of beneficiary children will have and be using health cards.” (71)

Lessons learned:

• It is beneficial for borrowers to own, lead and sustain their commitment to the process
• Conditional cash transfers are operationally feasible and political acceptable (as they are not seen as just hand-outs due to the fact that they are not unrestricted cash-subsidies)
• Human capital conditionalities can help the poor “grow out of poverty

– for more see pages 71 and 72

Applicability: Bolsa Família is the largest conditional cash-transfer program in the developing world.  Thus, its challenges and solutions with respect to beneficiary selection, monitoring and evaluation, and quality control, as well as the World Bank’s lending mechanism designed to support the Bolsa Família program should be applicable to other countries.  Of course, this is not a one size fits all model, but clearly need to be adapted, taking into account new and different circumstances (“the (potential) success of the project is in many respects a function of the donor’s capacity to adapt to the specific needs of that program.” (73))

Source: http://www.mfdr.org/sourcebook/6-1brazil-bolsafamilia.pdf