AARP
“The fact that 28 million Brazilians have escaped from poverty in the past eight years and 39 million people have risen to the middle class is one of the main reasons for our great economic development in recent times.”

More than 28 million Brazilians receive monthly benefits from the Brazilian Social Security System, distributed among retirement benefits, pensions, health care, and welfare assistance. In 2010, the amounts disbursed by in this area reached US$153 billion, equivalent to 6.9 percent of Brazil’s gross domestic product in that year.

This model of social welfare was developed after decades of debates and demands from social movements. Further advances arrived with the Constitution of 1998, which reorganized Brazilian legislation for democracy after more than 20 years of military government.

One of the fundamental principles in our “Magna Carta” is that supportive social security should ensure the maintenance of workers and their families when they cannot sustain themselves, whether because of illness, accident, pregnancy, prison, or old age. Another innovation was transforming the Social Security System, together with Health and Social Assistance, into a right within the area of social protection. Universal coverage brought millions of people into the system who had previously had restricted coverage, particularly rural workers, who had received benefits only if they were heads of a household.

However, when my administration entered government in 2003, many principles of the constitution had not yet been fully implemented. The percentage of people contributing to the Social Security System, for example, had fallen from 66.4 percent of Brazilians between the ages of 16 and 59 in 1992 to 61.7 percent in 2002. By 2009, we had managed to raise this number to 67 percent, or 56.6 million people—the highest rate in the history of the country. A large part of this increase was due to the generation of jobs, since between 2002 and 2010, 15 million formal jobs were created—all of which were safeguarded by the Social Security System.

The historically poor quality of service also undermined the coverage of Brazilian Social Security. Before 2003, Social Security agencies operated with outdated equipment and inadequate facilities, and lacked the skilled personnel required to meet growing demands. Many services were outsourced, and there were infamous queues in which older citizens in search of assistance spent whole nights in front of agencies.

After completion of public procurement processes, we put an end to the outsourcing of attendants and implemented an electronic scheduling center, eliminating the queues. We also invested in renovating the agencies, and we approved a program of network expansion that created 720 new service centers. The concept of mobile units was also implemented; today, there are 10 boats providing services in the far-flung regions of the Amazon. The network now has 1,131 agencies distributed throughout 977 municipalities and providing services to 4 million people per month.

The use of technology, the organization of databases, and improvements in service have enabled a true conceptual turnaround in the treatment of citizens. Instead of “granting benefits,” this work is seen as “recognizing rights.” Claims that once took years can now be filed in less than 30 minutes.

Today, on reaching retirement age, beneficiaries receive a letter informing them of the value of the benefit and the procedures required to receive it. They also have free access to their pension statement from any ATM terminal.

Studies show that retirement benefits have helped around 23 million Brazilians, of all ages, to escape from poverty. That is to say, 23 million people have left behind a household income per capita of less than half the minimum salary (approximately US$339 per month).

The Brazilian Social Security System also has a program, the Continuing Social Assistance Benefit, that grants retirement benefits to any older person or physically or mentally disabled person whose household income is less than one quarter of the minimum salary.

Our government extended this program with the approval of the Brazilian Statute for the Elderly, which lowered the minimum age of eligibility from 67 to 65 years old. In addition, this statute enabled payment to be granted to spouses. This extension has allowed the Social Security System to reach 17.8 million people (82 percent of Brazilians over 60 years of age).

To improve the health of workers, the Accident Prevention Factor was set up in 2003 as a company qualification index for safety at work. The greater the risk of the activity, the higher the rate the employer pays for Occupational Accident Insurance, used to cover Social Security System expenditures related to accidents and disability.

Moreover, the continuing policy of real growth of the minimum salary, agreed with trade unions and employers, enabled strong upward social mobility and the strengthening of the domestic consumer market. Between 2002 and 2010, the minimum salary grew 62 percent, adjusting for inflation, while social inequality reached the lowest level in 50 years.

The expansion of the domestic market and the inclusion of more of the poor has generated a dynamic domestic consumer market in Brazil. The fact that 28 million Brazilians have escaped from poverty in the past eight years, and 39 million people have risen to the middle class, is one of the main reasons for our great economic development in recent times. This generated greater tax revenues, leading to more resources to take care of those in need, in a virtuous cycle of inclusion and development.

Because of these results, various countries have studied our model of social protection, and we have contributed to the restructuring of other systems, particularly in Africa and Latin America. The policy of extending social protection to 3 million Brazilian migrants has achieved milestones in the last few years. We have made international agreements, most notably with Japan and the United States, and the Ibero-American Multilateral Agreement, involving 22 countries, resulting in a true policy of “globalization of social protection.”

There is still much to be done, but I am certain that Dilma Rousseff, who succeeded me as president of Brazil, will work further to extend and improve the network of social protection. We are on the right track, and I am convinced that the nation is not only capable but has a duty to offer supportive and public social security to all its citizens, especially as they grow older.  

Luiz Inácio Lula da Silva
President of Brazil from 2003-2010, Luiz Inácio Lula da Silva was born in 1945 in Pernambuco state in the Northeast of Brazil. He migrated with his family to São Paulo when he was 7 years old in search of better economic opportunities. He began working when he was still a child and eventually trained as a machinist in a factory. He was elected president of the metallurgists union, representing 100,000 workers, in 1975. He founded the Worker’s Party in 1980 and, after three attempts, was elected President of Brazil in 2002. Since leaving office at the beginning of 2011, he has been the honorary president of the Instituto Cidadania, a non-profit organization seeking to find solutions to structural problems in Brazilian society.

 
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