Helping ‘left behind’ children to learn
By Alison Broady,
A little under two hours outside Rio de Janeiro is the small seaside city of Marica. Traditionally, an affordable, quiet place where people rest before and after the long commute into the city, for years Marica lost much of its population’s spending power to Brazil’s second largest city.
"I believe local currencies, like the system in Marica, can be a powerful business development model for towns and villages in the UK, especially those losing out to online sales or nearby large cities."
However, the Marica I found on several visits this year as part of my Churchill Fellowship learnings about the impact of local currency basic income projects, was totally different. Instead of peripheral ‘commuterville’, I found a bustling, thriving city centre.
Since 2013, Marica has become one of the fastest growing cities in Brazil, increasing in size by approximately 3% annually. How did Marica become a success story of urban development? Well, I believe the answer lies in the decisions of its governing Workers Party, who over the last decade has used lucrative oil revenues to build a ‘solidarity economy’ prioritising social profitability ahead of purely financial profits.
In Marica, oil revenues have been used to fund new hospitals, schools, and free public transport, but the flagship programme is a Citizen’s Basic Income (Renta Basica de Ciudadanía) paid in the city’s own currency, the ‘Mumbuca’. In Marica, 25% of its poorest citizens (around 42,000 people) are given a Renta Basica of 300 Mumbucas per month (approx £45), where 1 Mumbuca = 1 Reais (Brazilian currency). Whilst in theory the municipal government has committed to paying a basic income to all citizens, this is subject to budgetary constraints.
The payment is made digitally to recipients, who can either use an app or a prepaid card to spend their Mumbucas with local businesses in Marica. However, this is not just a welfare programme to support the poorest people. The municipal government also pays Mumbuca to those in the informal economy (the first programme of its kind in the world) and gives city hall employees food vouchers in Mumbuca to support local restaurants. Additionally, any local resident or business can set up their own account via the app so that they can pay, or be paid, in Mumbuca.
The currency is regulated and administered by the city’s own bank, the Mumbuca Bank. For every transaction made in Mumbuca, the recipient business pays a 2% fee, and anyone who wants to exchange their Mumbucas for cash, pays a 1% fee to do so (recipients of the Renta Basica cannot exchange their Mumbucas for cash). These fees go back into the bank to fund administration of the programme and micro credit lines for small businesses. City officials also hope that when oil revenues eventually disappear, these fees can help the Renta Basica programme become self-sustaining.
Research by Gama (2023) suggests that Mumbuca use is increasing each year and the number of businesses benefitting is constantly diversifying, suggesting an increased use of the currency and a ‘stickiness’ within the local area, also known as its ‘circulation velocity’ (the number of times a Mumbuca is spent in Marica before it is converted to Reais and exits the system).. This is important because the longer each Mumbuca stays in circulation and is used as a means of exchange in the local area, the greater its value.
Marica is not the only city in Rio state to be running such a programme. Neighbouring Niteroi, a much larger city, also launched its own local currency, borrowing significantly from the success of Marica. The most exciting thing about Niteroi is the potential scale. Whilst acceptance of the currency amongst local businesses is much lower than Marica at present, Niteroi is certainly one to watch. As its Mayor, Axel Grael, told me: "Niterói has a large investment capacity. So, if there ever is the necessity to expand the program, we will do so, and we have already expanded it twice."
I believe local currencies, like the system in Marica, can be a powerful business development model for towns and villages in the UK, especially those losing out to online sales or nearby large cities. They can support community wealth building and circular economy initiatives and give power back to communities when making spending decisions. Digital or local currency initiatives in the UK, such as the Brixton and Bristol pound have had some success but not the transformative impact the Mumbuca has had in Marica - maybe it's time to supercharge these local currencies with a Universal Basic Income? Local governments across the UK, from Derry City Council to Manchester City Council, have shown support for trials of Universal Basic Income. Perhaps this is a model they could look at whilst also promoting local economic development and equitable business growth?
Patrick Brown is a 2023 Churchill Fellow, his report containing his findings on the impact of Universal Basic Income in Brazil and Colombia. and the role universal cash transfers can play in peace building will be published later this year.
The views and opinions expressed by any Fellow are those of the Fellow and not of the Churchill Fellowship or its partners, which have no responsibility or liability for any part of them.
By Alison Broady,
By Jonathan Vincent,
By Kevin Munday,