Brazil’s poor squeezed by less virus aid, surging food costs

RIO DE JANEIRO (AP) - Many people in Brazil are struggling to cope with less government pandemic aid and rising food prices. Millions are expected to fall back into poverty.
Starting this month, the Brazilian government has halved its monthly emergency money transfers to help the poor in Brazil weather the plight of the economic collapse, to 300 reais ($ 54).
The program, which launched in April, was the main reason behind lifting 15 million people out of poverty, including 2 million in July through August alone, according to a report by the Getulio Vargas Foundation, a university released on Friday. According to Marcelo Neri, author of the report, poverty, which the FGV defines as income equivalent to half a monthly minimum wage, or 523 reais, has reached its lowest level since at least the 1970s.
With the government finalizing the program by the end of the year and unemployment still high, many of the people who have benefited from it will be newly impoverished, said Neri, director of the FGV's social policy center. Half of those who have ascended are expected to fall into poverty in October, he said.
Marcio Santos, 27, used to sell water at traffic lights in Sao Paulo. Nobody wants to buy from him anymore because he fears COVID-19 contamination. That's why he's relying on the government's pandemic cash program. Receiving 300 reais a month instead of the 600 reais he has been collecting for months is a hole in his finances.
“How can we take care of our 5 children for a family that receives help from 300 reais? There is no way we can buy milk, diapers and groceries, ”he said.
President Jair Bolsonaro told the United Nations General Assembly last month that the pandemic cash program had improved the livelihoods of 65 million Brazilians and made it one of the largest such initiatives in the world. Political analysts have largely attributed the rise in popularity to the program's success. Around 40% of Brazilians polled by pollster Ibope rate the Bolsonaro government as good or excellent, according to a poll published on September 24th.
However, the Brazilian government lacks the fiscal space to maintain the costly program. It remains to be seen whether Bolsonaro's approval ratings will fall if aid is withdrawn.
Meanwhile, rising food prices have hurt the poor too.
Inflation data released by the Brazilian statistics agency on Friday showed food and beverage prices rise 2.3% in September, the largest increase this month since 1994. Food prices rose 7.3% in 2020 with the use of some staples like rice, milk and tomatoes jumping 41%, 30% and 26% respectively.
Pedro Kislanov, who coordinates the Bureau's inflation survey, says higher food costs are due to a weaker exchange rate, which is boosting Brazilian exports and reducing domestic supply. Domestic demand has also increased due to the government’s COVID-19 bailout program.
Cleide Valente, an elderly caregiver, visits the same street market in Sao Paulo every week and complained about the cost of groceries on Thursday.
”(Before the pandemic) I was able to make a good buy with 120 reais. Today I've already spent 160 reais here, ”said 57-year-old Valente.
According to the World Bank, by the end of 2021, up to 150 million people worldwide could find themselves in extreme poverty and living on less than $ 1.90 a day. The exact amount will depend on how much economies shrink during the COVID-19 pandemic, the bank said in a report Wednesday.
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Pollastri contributed from Sao Paulo.

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