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Kai Ryssdal: China’s annual legislative session — it’s called the National People’s Congress — has started. This week the premier, Wen Jiabao, said China will ‘basically eradicate poverty’ by 2020.
No poverty in China, nine years from now. Seems a pretty tall order, but it does make you think about this: Just how do you get poor people out of poverty?
Well, you can pay them. One of the most effective anti-poverty programs does just that. Marketplace’s Jeff Tyler went to Mexico for the story.
Jeff Tyler: Kids play in between hundreds of mothers waiting in line at this school gymnasium in Monterrey, Mexico. Moms have gathered here for payday. The government program Oportunidades — Spanish for “opportunities” — covers 34 million people. That’s one in three Mexicans. It doles out what are known as conditional cash transfers. Essentially, these are small financial rewards for meeting certain obligations, like taking kids to get regular medical check-ups or keeping them in school. The education stipend starts at $29 a month for elementary school — up to $185 a month to keep a high school senior from dropping out.
That money makes a huge difference for people like 58-year-old Maria Guadalupe Reyna.
Maria Guadalupe Reyna: Economically, it’s very hard to take care of seven kids. Just getting them enough food to eat is very difficult.
Like many mothers here, she plans to spend her stipend on groceries. Oportunidades has helped cut malnutrition around Monterrey by half. Independent studies also show that the program helps break the cycle of poverty that extends from one generation to the next. Reyna has no formal career, but her son is now a professional.
Guadalupe Reyna: Because of the program, my oldest son is now an accountant.
Part of the secret of the program’s success is giving the power of the purse to women.
Maribel Acosta helps run Oportunidades in the state of Nuevo Leon.
Maribel Acosta: The aid money is given to the account holder, who is usually the mother of the family. The mom has the best understanding of how to handle the family’s finances.
In other words, moms are better with a budget. The program also gets mothers to re-think the value of education. In the past, kids got pulled out of school to help support the family, especially girls.
Acosta: We give more support for girls as an incentive to keep them studying, instead of taking the girl out of school so she can go to work.
Mexico spends about $5 billion a year on Oportunidades. Critics say the program bribes people to do what they should be doing anyway.
Helena Ribe disagrees. She’s with the World Bank, which loans Mexico money for the program.
Helena Ribe: It’s considered a very good investment, because it’s ensuring that the poorest people are better off, and that the children invest in education, the mothers invest in nutrition and health — which is well-known as one of the best investments that both families and countries can make.
In the long run, investing in preventive health care can save Mexico money on emergency services. And Ribe says giving kids grants to go to school can pay off too.
Ribe: Kids that completed the program and graduated tend to have about 10 percent more income.
A similar program in Brazil has dramatically reduced poverty and inequality there. Altogether, 30 countries are experimenting with conditional cash transfers.
But the model doesn’t work everywhere. A pilot program in New York City got mixed reviews. And even in Mexico, the program has not been as successful in big cities. Urban health services may be lousy or not available. And kids in the program often graduate from college only to find no available jobs.
But whatever its shortcomings, the program gets enthusiastic support from the mothers at the gymnasium.
Blanca Nejero even credits Oportunidades with saving her marriage.
Blanca Nejero: I thank god for this program. Before, I was going to split from my husband because of economic problems.
Someday, when she grows older, Oportunidades could help Nejero again. The safety net has been expanded to include benefits for the elderly.
In Monterrey, Mexico, I’m Jeff Tyler for Marketplace.
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