One-third of population in Brazilian city set to receive basic income

Signal of change / One-third of population in Brazilian city set to receive basic income

By Stephanie Holloway / 13 Nov 2019

Around 52,000 people in the city of Maricá in suburban Rio de Janeiro will receive a monthly stipend of 130 reais (£24), just under the national poverty line, as part of a new initiative called the ‘Citizens’ Basic Income’ launching this November. The CBI will be monitored by the Jain Family Institute in New York, working alongside Brazilian academics at Fluminense Federal University and the Euclides da Cunha Foundation.

There is no criteria for how these funds are spent, although eligible recipients must have lived in Maricá for at least three years, be registered in the city’s database, and with earnings not exceeding three times the Brazilian minimum wage. Any increase in income resulting from a combination of work, personal initiative and the CBI will not affect the guarantee of benefits.

Moreover, the CBI will be distributed in ‘mumbuca’ – a digital social currency pegged 1:1 to the Brazilian Real that is not accepted outside of Maricá. It has no physical form and is either pre-loaded onto a card or accessed via an app.

So what?

Basic income has played an active role in Brazilian public policy since 1995 and is conceived in legislature as a human right. After the national rollout of several conditional cash transfers (CCTs) including Brazil’s flagship programme Bolsa Familia, the Maricá initiative represents the next step towards wider implementation.

While places like California, Kenya, Finland and Ontario have conducted basic income pilot projects, the CBI is unique in that it is a large-scale policy without an ‘end date’. Further, it is funded by the municipal budget (as opposed to taxes or philanthropy as in other cases) which gets 72% of its revenue from oil royalties.

The decision to use a local currency is also significant for two reasons. Firstly, it keeps money circulating within Maricá's economy to the benefit of local businesses and housing development. Secondly, as Banco Mumbuca is the sole overseer of all mumbuca transactions, researchers can tap into an unprecedented amount of data on the effects of cash transfers at scale. Unlike previous literature which focuses on the individual (e.g. food security, housing stability, employment status and wellbeing), the scope of CBI permits a novel focus on inflation, political participation, media, financial inclusion, formal economic activity and identity formation.

What does it take for universal basic income to enter the mainstream? How might ‘success’ be defined in a basic income policy like Maricá’s? Could the fact that oil royalties fund the programme enable oil lobby groups to capture government decision-making?

Sources

https://www.vox.com/future-perfect/2019/10/30/20938236/basic-income-brazil-marica-suplicy-workers-party

https://www.businesswire.com/news/home/20191030006167/en/Announcing-Research-New-Large-Scale-Basic-Income-Policy

What might the implications of this be? What related signals of change have you seen?

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