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| Documento | English |

| Brazil: Citizen's Income Signed into Law by President Lula
Newsflash 25, January 2004

Basic Income European Network

| 04/02/04 | | |
|

|

This was a truly extraordinary event. Overlooking
the world-famous Praça dos tres Poderes designed
by Oskar Niemeyer, the ceremonial room of the
President's Palacio do Planalto was gradually
filling with journalists, photographers, TV
crews, ministers and other political dignitaries.
Facing the swelling audience, four empty chairs.
And behind them, a large wall covered by
colourful smiling faces of all ages and races,
alternating with an inscription in large letters:
"RENDA BÁSICA. Cidadanía para todos" (Basic
income. Citizenship for all").
An off voice announced the arrival of the
President, and the crowd went quiet, as José
Inacio Lula da Silva and his wife Marisa sat
down. By their side, the Ministro da Casa Civil
(Brazil's de facto Prime Minister) José Dirceu,
and Federal Senator Eduardo Matarazzo Suplicy,
Lula's only opponent in the Worker's Party's
presidential primaries and author of the law
proposal which the President was there to sign.
Summoned by the off voice, I rose to the pulpit
to indicate briefly what I saw as the world-wide
significance of the event (an expanded English
version of my intervezntion was published the
next day in South Africa's Business Day and is
available from from
www.etes.ucl.ac.be/PVP/PVPInterventions.html).
Next was Senator Suplicy's turn, visibly moved,
who briefly retraced his long fight for the
introduction of a guaranteed minimum income in
Brazil, eloquently recited a poem, restated the
key advantages of a universal citizen's income
over means-tested schemes, thanked the various
Workers' Party heavyweights who had helped the
proposal through the various stages, and ended in
a way that did not exactly go unnoticed in the
Brazilian press, by warmly hugging the president.
After ceremonially signing the law, Lula paid
hommage to the determination of his old comrade,
whom he described as the inexhaustible Don
Quixote of minimum income, while warning that
there was no magical solution to Brazil's
problems and that the new law would only be
introduced gradually.
Notwithstanding this presidential caution, this
was definitely a "day of glory" for the very
popular 62-year old Sao Paulo Senator, who was
surrounded for the occasion by his 95-year old
mother, his ex-wife and mayor of Sao Paulo Marta
Suplicy, several other members of his family and
many friends. A first culmination in his fight
had been the unanimous adoption of his 1991
minimum income proposal by the federal Senate,
never endorsed by the Chamber of Deputies. His
more ambitious 2001 citizen's income proposal,
instead, was approved with some amendments by the
Senate in December 2002 and by the relevant
commissions of the Chamber of Deputies in
September and November 2003. The President had
until January 2004 to either veto or sanction it.
He chose the latter.
What will now happen? As initially formulated,
the 2001 Suplicy proposal stipulates that,
subject to it being endorsed by a national
referendum in 2004, "an unconditional basic
income, or citizenship income" will be introduced
in 2005 for every Brazilian citizen or foreign
resident for five years or more, that it will be
of equal value for, payable in monthly amounts
and sufficient to cover "minimal expenses in
food, housing, education and health care", taking
into account "the country's level of development
and budgetary possibilities". Two main amendments
were made before unanimous approval by the
senate: the idea of a referendum was dropped, on
the ground that everyone would be in favour
anyway, and a new article was added, stipulating
that the "basic citizenship income" will be
realized in steps, at the discretion of the
Executive, giving priority to the neediest layers
of the population". And it is with these two
amendments that Suplicy's proposal was signed by
Lula.
From the second amendment it follows, no doubt,
that Brazil is bound to remain stuck for quite a
while with a means-tested system. But this does
not make the law meaningless. First, the
existence of the law makes progress easier
towards a stronger integration of existing
assistance system, and towards a stronger
integration with the social insurance and the tax
system, as Brazil's federal government is legally
entitled to take any number of further steps, in
a financially responsible way, towards a full
universal basic income. Secondly, this
perspective will help face the objections that
will no doubt arise soon, as the federally funded
means-tested system keeps getting more
comprehensive and less stingy, and as individual
and collective beneficiaries strategically adjust
to its getting established. When over 50% of the
active population works entirely in the informal
sector, the income test needs to rely essentially
on declarations of income earned by the
beneficiaries. As the officials in charge of the
existing income-tested Bolsa Familia system are
well aware, there is no realistic way of
seriously checking whether the declarations are
correct. Consequently, either one needs to be
ready for major problems of arbitrariness in and
resentment about local decisions of inclusion and
exclusion, in particular of a clientelistic kind.
Or one needs to devise more observable
alternative proxies of income poverty, such as
the number of light bulbs, the quality of the
material used for the house or how well fed the
children look, at the expense of discouraging
systematically a diligent use of the modest
resources poor households have. A genuine
citizen's income would get rid of theses problems
in one swoop, while extending support to low-paid
working families. Even if progress towards it
must be gradual - for example through turning the
existing means-tested Bolsa familia and the
existing income tax exemption for dependent
children into a universal child benefit system
that would also benefit the working families that
are neither poor enough to be entitled to welfare
payments (about EUR 50 per capita per month) nor
rich enough to pay tax (about EUR 400 per month)
-, it therefore offers a way of tackling
effectively the criticisms the existing system is
bound to trigger without accepting to roll them
back.
To investigate the way in which the new law could
influence the further development of existing
programmes, Eduardo and I had, on 7-9 January, in
quick succession a long evening discussion with
Jacques Wagner, Minister of Labour, and his
staff; two long meetings with Antonio Palocci,
Finance Minister, and two of his top cabinet
advisors, and with Cristovam Buarque, Education
Minister and former Governor of the Federal
District of Brasilia, where the Bolsa Escola
programme was first introduced; a working lunch
with Ana Miranda, the President's special
assistant in charge of the new Bolsa Familia
programme, and her staff, and with Marta Suplicy,
mayor of the city (Sao Paulo) in which the
largest municipal assistance programme is
operating; and a working breakfast with José
Graziano, Minister in charge of the Zero Hunger
programme. The general picture was that there was
strong sympathy for the objective, but no clear
vision about how to get there and, for the time
being, many other priorities. How much difference
the new law will make to Brazil's protection
system in the coming years is quite uncertain.
Just think that off the four ministers we saw,
two (Buarque and Graziano) lost their job and one
was shifted (Wagner, from Labour to Social and
Economic Development) in Lula's recent government
reshuffle of 23 January. Nonetheless, the signing
of Senator Suplicy's law proposal was an
important, indeed incredible, moment in the
history of basic income, that should give hope
and strength to many across the world who view
basic income as a central compoentnt of a
desirable and sustainable future for our
societies.
pvp

The pictures of the event shown on the same
evening on national TV can be accessed at
http://pop.gmc.globo.com/webmedia/pop_legado.html?player=wmv&usuario=tvgjornalismoaberto&tipo=ondemand&programa=817&path=/video/jg/20040108/CRG_mat03_high.wmv&banda=bl

Some coverage in Brazilian national papers can be downloaded from
http://www.estadao.com.br/agestado/noticias/2004/jan/08/141.htm
http://www1.folha.uol.com.br/folha/dimenstein/noticias/gd080104h.htm
http://noticias.bol.com.br/politica/2004/01/08/ult96u56994.jhtm
and more can no doubt easily be found through
search engines (try "Lula", "Suplicy", "renda
básica de cidadania", "projeto de ley", "8 de
janeiro", etc.).

In Spanish, some coverage can be found in the Mexican "El Economista"
http://www.economista.com.mx/online4.nsf/0/59439A4A9D8769FA86256E150070F8D8?OpenDocument

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