Socialist Utopia A City in Brazil Experiments with the Unconditional Basic Income

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Like an island surrounded by the Brazil of right-wing President Jair Bolsonaro, the city of Maricá is testing a leftist totem: the unconditional basic income. It has proven its worth in the corona crisis.

By Jens Glüsing in Maricá, Brazil

When the cashier Agnes Marques Ferreira lost her supermarket job in January, the government of her hometown of Maricá saved her from plunging into misery by providing her with a monthly basic income worth around 900 reals,

In theory, the sum would hardly be enough for the single mother of two boys to make ends meet. But Marques Ferreira now pays 20 percent less for electricity and water. Furthermore, the city’s public transportation system is free of charge, and if she does need to make larger expenditures, such as renovating her bathroom, she can apply for a no-interest loan from the city.

She lives together with her family in a simple house in a Maricá suburb. “In Rio, I would be begging on the streets,” says Marques Ferreira. “Here, I have a quality of life that most poor Brazilians can only dream of.”

The town responsible for this beneficence is located around 60 kilometers (37 miles) east of Rio de Janeiro, on the Atlantic coast. At first sight, Maricá is almost indistinguishable from other Brazilian cities. Gas stations, workshops, cheap restaurants and protestant churches line the four-lane artery that connects it with Rio.

But if you turn off the main road into the town center, the image changes. Cycling paths run alongside the roads and bikes can be borrowed at no cost. Uniformed traffic guards help children and the elderly across the street. Just off the city’s main square, which is undergoing renovations, there is a brand new, bright red cinema, built by the city’s culture agency. The buses are also red, as are the loaner bikes and the city hall. The choice of color is no accident: Here, it proclaims, the leftists are in power.

Om a Brazil run by the extreme right-wing President Jair Bolsonaro, Maricá is like an island. With a population of 160,000, the community has been led by the Labour Party of ex-president Luiz Inácio Lula da Silva for the last 12 years, and it is home to an experiment in new social policies aimed at equal opportunity and integration.

In Maricá, policies that are being discussed as a model in many parts of the world – particularly for the post-corona era – have become reality: unconditional basic income, a free public transportation system and comprehensive, free health care. Social scientists, economists and politicians from around the world are paying close attention.

“We are a laboratory for all of Brazil,” says former Mayor Washington Quaquá. The 49-year-old governed the city from 2009 to 2017 and laid the groundwork for today’s reality. The jovial social scientist is a senior figure in the Labour Party and is a rising star among the proteges of the powerful Lula.

After two terms in office, Quaquá was no longer allowed to run for re-election in 2016. So, he pushed his university friend Fabiano Horta to run. Horta has been so successful that he was re-elected in November with a spectacular 88 percent of the votes.

“We Have the Best Mayor”

Two years earlier, Bolsonaro had won 62 percent of the vote in Maricá in presidential elections. It doesn’t take long to find Bolsonaro fans in the city. In front of a juice stand in the city center sits Wilson Gomes de Anrade, a 78-year-old pensioner. He is full of praise for the president. “He doesn’t steal, and he doesn’t allow others to steal!” For him, Labour Party supporters are “all communists.”

But he avoids criticizing Quaquá and Horta, his successor. “They do a good job. They’re just in the wrong party,” grumbles the former clockmaker. When it comes to “health, education, basic income and urbanization,” he gives them a rating of 10 out of 10. “We have the best mayor in the state of Rio de Janeiro.”

This verdict isn’t just surprising because it comes from a staunch Bolsonaro supporter. Former Mayor Quaquá was barred from seeking public office for eight years in 2014 by a regional election court. The judge argued that the ex-mayor had abused his power to guarantee re-election by raising the salaries of city employees shortly before the vote.

But his opponents have been unable to leverage the verdict for their own political purposes. And even without holding public office, Quaquá remains the most powerful politician in Maricá. He receives his visitors in a dilapidated country home in the green hills outside the city. The smell of barbecue is in the air, the water in the swimming pool looks as though it’s been there for awhile and faded posters from the Landless Workers’ Movement (MST) and the Labour Party hang on the walls of the veranda.

City officials, union representatives and a minister from the former leftist government of Dilma Rousseff are waiting for an audience. Several former cabinet members from the Lula and Rousseff era have found a haven in Maricá.

Quaquá sits beneath a large oil painting of Che Guevara, the revolutionary, sipping a cup of coffee. Quaquá admires the guerrillero: “For us, Cuba is a source of romantic inspiration,” he says.

He has taken his economic ideas, though, from China, a country he admires for its long-term strategic approach. “The state there works as an incubator for companies,” he says – a model he copied in Maricá, where the city administration provides support to tech startups.

The social welfare safety net, though, echoes that northern Europe, whose countries also inspired his ideas about how to finance that system if the community’s most important source of funding – the oil reserves off the coast of Maricá – should ultimately dry up.

Quaquá calls the vast oil field a “gift of nature.” It was discovered during Lula’s term in office, and the license fees that Petrobras, the partially state-owned oil company, pays to coastal communities are Maricá’s most important revenue source. The mayor forecasts that the city will receive additional revenues of a billion reals (157 million euros) from those fees in the next three years.

Industry Versus the Environment

Following the example set by Norway, the city has established a fund designed to continue pumping revenues into the community as fossil fuels are phased out. “We have a maximum of 20 years,” says Quaquá.

The city administration wants to use that time to push industrialization forward. They want to transform Maricá into a supply center for the oil platforms off the coast and build a new industrial port – right on one of the city’s most beautiful beaches. Environmentalists have managed to obtain a temporary injunction due to the potential of ecological damage, and the plans are currently on ice until a higher court can address the issue.

The socialist governments of Lula and Dilma Rousseff were plagued by similar problems: The Labour Party’s focus is on economic growth and it is willing to accept environmental damage in exchange. “Without industry, there is no economic growth,” says Olavo Noleto, president of Codemar, the municipal development company. The goal, he says, is to make the city independent of oil revenues in the next 10 years.

The city is also building a technology park, complete with a university and factories. As part of a cooperative, the city is planning to produce premium chocolates and other foodstuffs. A film- and television-center is to produce films that will then be broadcast on its own streaming service. With this “leftist Netflix,” as Quaquá calls it, Maricá hopes to join the battle of ideas against President Bolsonaro and his followers.

Some critics believe that the oil wealth has gone to the heads of the city administrators. But Quaquá counters such criticisms by saying: “When we came to power, we weren’t receiving any licensing fees. And we still achieved everything we set out to do.”

Back then, Maricá, like many Brazilian cities, was ruled by a mafia of private bus companies. Their owners financed election campaigns, bribed politicians, had a strong say in who was appointed to what post and dictated ticket prices. Quaquá and his team managed to do something that nobody thought they could: They broke up the oligopoly. Today, the buses are owned by the state, the vehicles are new and air-conditioned, and the bus schedule is available to all on the internet.

A COVID Leader

The next step was Quaquá’s introduction of an unconditional basic income for those living in poverty. Around a quarter of the city’s population – 42,000 people – receive money from the state. All they must do is prove that they have lived in Maricá for at least the last three years and don’t earn more than three times the minimum wage. To receive the money, they must open an account at a bank owned by the city and install an app on their mobile phones. At the beginning of every month, money is deposited in the account by the city administration.

The basic income is not paid out in Brazilian reals, though, but in Mumbuca, a digital currency which only circulates in Maricá. It is linked to the real at a 1:1 exchange rate and represents an attempt to juice the local economy. “People used to go to Rio to go shopping,” says Quaquá. “Now, they spend their money here.”

“We accept Mumbuca,” read signs in the windows of most of the shops in the city. It is also accepted in restaurants, doctor’s offices, beauty salons and barber shops. It is named for the river which flows through the city.

Local shopkeepers were initially skeptical. “We thought: What a crazy idea!” says Delfim Moreira, president of the city’s trade association. But today, 9,400 businesses use the digital currency – far more than accept Visa and Mastercard.

When the pandemic reached Maricá last year, the municipality raised the basic income. “We erected a wall of social protection around the population,” says Mayor Horta. Maricá is the only municipality in the state of Rio de Janeiro to have created more formal jobs last year than were lost as a result of the pandemic.

The mayor is a reserved man who lacks the charisma of his predecessor, Quaquá. When the red, loaner bikes were introduced – which are available for free throughout the city – he showed up to the event in a plaid shirt and red facemask. In December, he fell ill with COVID-19: “Luckily, though, I got off lightly,” he says.

Buying Vaccine

Quaquá wasn’t quite as lucky: He spent several days fighting for his life in November 2020 after being brought to the state-run hospital with COVID-19. He had to be treated in an intensive care unit and placed on a respirator.

While in the hospital, he tried out one of the most recent achievements of the state-run technological institute, one developed in cooperation with the Federal University of Rio de Janeiro. It is a transparent helmet that helps COVID-19 patients breathe. From his hospital bed, he posted photos of the invention on Facebook. “We are currently building a factory and will sell the thing across the country,” he says.

Maricá is a frontrunner in the fight against the coronavirus. The new hospital that was inaugurated last May – and that carries the name Dr. Ernesto Che Guevara – was completely converted for the treatment of serious COVID-19 cases. Meanwhile, city health authorities opened their own laboratory for test analysis and sent employees to people’s homes to test them.

The elderly, indigent and other risk groups don’t need to leave their homes to be vaccinated: Doctors from the health agency come to them. Like the rest of the country, however, the city does suffer from a shortage of vaccines.

“Municipalities were not allowed to buy their own vaccine until recently,” Quaquá complains. But in response to the worsening of the COVID-19 crisis in the country recently, Brazil’s highest court ruled three months ago that governors and mayors could also purchase vaccine.

One day after that verdict, the head of Maricá’s city-owned technology institute began negotiations with an agent in Argentina to purchase 400,000 doses of Russia’s Sputnik-V vaccine.

Soon, the pace of vaccinations in Maricá will likely be faster than in Rio. Indeed, the mega-city’s conservative mayor, who has spoken derogatorily about Maricá in the past, has recently sought a more conciliatory tone. He wrote online that he has established contact with his counterpart in Maricá. The Rio mayor added that he is considering how best “to follow his example.”

Der Spiegel

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