Universalism and Targeting the Poor: A Dual Approach to Fight Poverty in Brazil (1988-2001) João Batista Nascimento Gregoire Submitted to the graduate degree program in Latin American and Caribbean Studies and the Graduate Faculty of the University of Kansas in partial fulfillment of the requirements for the degree of Master of Arts. Chair: Dr. Elizabeth Kuznesof Dr. Melissa Birch Dr. Gary Reich Date Defended 06, December 2018 ii The thesis committee for the Center for Latin American and Caribbean Studies Program certifies that this is the approved version of the following thesis: Universalism and Targeting the Poor: A Dual Approach to Fight Poverty in Brazil (1988-2001) Co-Chair: Dr. Gary Reich Co-Chair: Dr. Melissa Birch Date Approved: 06, December 2018 iii Abstract This research scrutinizes the social policies developed in Brazil between 1988 and 2001 with the goal of examining the political process that combined the universalization of social rights and the development of social policies targeting the poor and, as a result, culminated in the first federal cash transfer program in Brazilian history. With this specific goal in mind, to undergo an historical study on the genesis of cash-transfer programs in Brazil, the focus of this research is to trace the origins of the convergence point, when the fight against poverty in Brazil aligned universal social rights jointly with a federal cash transfer program (Bolsa Escola). Since this research is underpinned by the successful results of cash-transfer programs in Brazil, it aims to discover what institutions, events, and people were critical for the deployment of such initiative. iv Acknowledgements This research project would not be possible without the illuminating guidance of my faculty advisor, Professor Elizabeth Kuznesof. I am also deeply indebted to the Director of the Center for Latin American and Caribbean Studies, Professor Marta Caminero and my dear friend Professor Cécile Accilien. I have been fortunate to find at the University of Kansas an environment that reaffirmed all my previous convictions about pursuing an academic career. v Table of Contents 1. Introduction ……………………………………………………………….. 1 1.1 – Combining Universalism and Targeting the Poor ……………………2 1.2 – Explanation of the Timeframe ……………………………………….6 1.3 – Structure of the Chapters ………………………………………….…7 1.4 – Methodological Framework and Primary Sources …………………..8 2. Jose Sarney (1985 – 1990) …………………………………………………..12 2.1 – Tudo Pelo Social ……………………………………………………..14 2.2 – An Ungovernable Country …………………………...………………18 2.3 – The Social Structure Before 1988 …………………………………....21 2.4 – Programa do Leite …………………………………………………... 24 2.5 – Conclusion …........................................................................................32 3. Fernando Collor de Mello and his Reconstruction Project .......……….........36 3.1 – Creation of Ministerio da Ação Social ………………………….........39 3.2 - Corruption Scandal – Legião Brasileira de Assistência ........................40 3.3 - Lei Orgânica da Saúde and the Creation of SUS ..................................44 3.4 – Itamar Franco takes Office ...................................................................49 3.5 - Ação da Cidadania Contra a Fome, Miséria e pela Vida ......................51 3.6 – Lei Orgânica de Assistência Social ......................................................54 3.7 - Conclusion.............................................................................................57 4. The Father of the Plano Real Succeeds Itamar Franco………………………63 4.1 – Rede de Proteção Social ........................................................................66 4.2 – Programa de Erradicação do Trabalho Infantil ......................................69 4.3 – Bolsa Escola – A Regional Cash-Transfer Experience...........................74 4.4 - Programa de Garantía de Renda Familiar Mínima .................................79 4.5 -From Regional to Federal – .....................................................................87 5. Final Conclusions.............................................................................................96 vi List of Tables 1. Brazilian Public Health Care Spending………………………………..23 2. Nutrition Program Spending…………………………………………..26 3. Mortality Rate in Brazil………………………………………………..29 4. Levels of Extreme Poverty…………………………………………......32 5. Regional Inequality On Medical Care Spending…………………….....45 6. Federal Spending on Healthcare 1989-1993……………………………48 7. Programs of Rede de Proteção Social…………………………………..68 8. Number of Children in the Labor Market 1992-2008..............................72 9. Levels of Education Bolsa Escola……………………………………….76 10. Income of Applicants Bolsa Escola……………………………………...77 11. Expenditure of Cash Benefits – PGRFM……………………………...…84 vii List of Abbreviations: BPC Benefício de Prestação Continuada CEF Caixa Econômica Federal CEME Central de Medicamentos CONSEA Conselho Nacional de Segurança Alimentar ECA Estatuto da Criança e do Adolescente INAN Instituto Nacional de Alimentação e Nutrição FAE Fundação de Amparo ao Estudante FAT Fundo de Amparo ao Trabalhador FIOCRUZ Fundação Oswaldo Cruz FNDE Fundo Nacional de Desenvolvimento da Educação FSESP Fundação Serviços de Saúde Pública INAMPS Instituto Nacional de Assistência Médica da Previdência Social INAN Instituto Nacional de Alimentação e Nutrição LBA Legião Brasileira de Assistência LOAS Lei Orgânica de Assistência Social LOS Lei Orgânica de Saúde MAS Ministério da Ação Social MEC Ministério da Educação PAP Programa de Abastecimento Popular PAT Programa de Alimentação ao Trabalhador PCA Programa Complementar de Alimentação PETI Programa de Erradicação do Trabalho Infantil PGRM Programa de Garantia de Renda Miníma PROAB Programa de Abastecimento de Alimentos Básicos em Áreas de Baixa Renda PSDB Partido Socialista Democrático Brasileiro PT Partido dos Trabalhadores SINE Sistema Nacional de Emprego SUCAM Superintendência de Campanhas da Saúde Pública SUDS Sistema Único de Desenvolvimento de Saúde SUS Sistema Único de Saúde viii UNB Universidade de Brasília DIEESE Departamento Intersindical de Estatísticas e Estudos Socioeconômicos 1 I – Introduction Perhaps the most striking feature of Brazilian society is its extensive levels of poverty and inequality. It is inconceivable to live in Brazil and not be faced with a scenario where the utmost luxury coexists with extreme poverty. Any scholar that dedicates an academic career to learn and study about Brazil becomes versed in the robust economic development that the nation experienced through its modern history. Notwithstanding, such development was not accompanied by an overall socio-economic improvement of the Brazilian population.1 The high levels of intergenerational poverty indicate that if you are born in a poor Brazilian household it is very likely that you will die in the lowest stratum of Brazilian society.2 Although the acute income gap has been a characteristic of Brazilian society since its colonial times, more recently the country has made the fight against poverty a governmental problem. The Constitution of 1988 is considered a milestone in the social history of Brazil. For the first time the country granted primary education and medical aid as universal rights that ought to be guaranteed by the government to every Brazilian citizen.3 In order to ensure that these basic rights of education and health care would not 1 Marshall C Eakin, Brazil: the Once and Future Country. (St. Martins Griffin, 1998), 202. Marshall Eakin illustrates how, in the Brazilian case, high economic growth did not translate to better widespread living conditions “From the 1930s to 1980s, Brazil experienced something of an industrial revolution, becoming the tenth largest economy in the world and the most industrialized nation in the developing world. Yet Brazil has now the most inequitable distribution of wealth of any country in the world…” 2 For a detailed study on the dynamics of intergenerational poverty in Brazil see Dorte Verner and Erik Alda. “Youth at Risk, Social Exclusion, and Intergenerational Poverty Dynamics: A New Survey Instrument with Application to Brazil.” Policy Research Working Papers (June 2004): 1- 46. 3 Federative Republic of Brazil Constitution, 1988. Art. 212 “Education, health, food, work, housing, leisure, security, social security, protection of motherhood and childhood, and assistance to the destitute are social rights, as set forth by this Constitution”. 2 simply be a written agreement, with no serious repercussions for politicians that opted to ignore it, government authorities after the 1988 Constitution no longer had absolute authority over the allocation of resources in the Federal budget. Article 212 of the Brazilian Constitution established that spending on healthcare could not be inferior to 15% of the Net Tax Revenue while article 198 set 18% as the minimum to be invested in education.4 1.1 Combining Universalism and Targeting the Poor Albeit the Constitution of 1988 represented a massive social advancement, it was not sufficient to solve the biggest social problem in the country – its enormous poor population and severe economic inequality. As long as the poor had meager access to income, they could receive medical treatment, but would never rise above their precarious sanitary conditions and deficient nutrition, arguably the main reason that they fall ill5. Little good was being done by providing free education to a family that relied on the labor of their children to eat. If Brazil were to correct