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Home » Blog Updates, Case Studies

The Story of Curitiba in Brazil

Submitted by on September 8, 2010 – 4:43 pmNo Comment

The story of Curitiba in Brazil illustrates how the introduction of a complementary currency was able to help a developing and impoverished city leverage its untapped resources to creatively solve a host of challenges and support environmental clean up, job creation and city restoration.

Garbage was a major problem in Curitiba, the capital of the southeastern state of Paraná, Brazil.  Its urban population had mushroomed from 120,000 in 1942 to 2.3 million in 1997. Many of the inhabitants lived in favelas, shantytowns made of cardboard and corrugated metal. Garbage collection trucks could not enter these favelas as the streets were not wide enough. The garbage piled up and disease broke out.

Jaime Lerner, who became mayor of Curitiba in 1971, did not have funds to apply customary solutions, such as bulldozing the area or building new streets. Bond measures, further taxation, or federal assistance were simply not options. Another way had to be found.

What Curitiba did have was an abundance of food supplies owing to the fertile lands and tropical climate of southeastern Brazil. It also had a municipal bus system that was underutilized, with many favela residents unable to afford public transportation. Mayor Lerner made use of these local resources to help resolve Curitiba’s urban issues.

Large metallic bins were placed at the edge of the favelas. Anyone who deposited a bag full of pre-sorted garbage received a bus token. Those who collected paper and cartons were given plastic chits, exchangeable for parcels of seasonal fresh fruits and vegetables. In addition, a school-based garbage collection program supplied poorer students with notebooks.

Tens of thousands of children responded by picking the neighborhoods clean. Parents made use of the tokens to travel downtown, oftentimes to find jobs. The bus tokens were soon accepted at local markets in exchange for food. In one three-year period, more than 100 schools traded 200 tons of garbage for 1.9 million notebooks. The paper-recycling component alone saved the equivalent of 1,200 trees—each day!

Eventually, more than 70% of Curitiban households became involved in the programs. The 62 poorer neighborhoods alone exchanged 11,000 tons of garbage for nearly a million bus tokens and 1,200 tons of food. Other programs were created to finance the restoration of historical buildings, create green areas, and provide housing—all by methods that placed little or no financial burden on the municipality.

The many initiatives—environmental cleanup, city restoration, job creation, improved education, disease intervention, hunger prevention—were each tackled without having to raise taxes, redistribute wealth, issue bonds, rely on charity or obtain loans from the federal government or organizations such as the World Bank and the International Monetary Fund (IMF). The improvements burdened no one. Everyone benefited.

The results in purely economic terms are worth noting. From 1975 to 1995, the Gross Domestic Product (GDP) of Curitiba increased an average of 75% more than its parent state of Paraná, and 48% more than the GDP of Brazil as a whole. The average Curitibano earned more than three times the country’s minimum wage. If non-traditional monetary gains, such as the exchange of garbage for provisions, are taken into consideration, the real total income for residents was at least 30% higher still. The results in human terms—in the renewal of dignity and hope for a better future—can only be imagined.

Curitiba discovered a means by which to match unmet needs with unused resources. They did so by making use of complementary currencies—monetary initiatives that did not replace but rather supplemented the national currency system. This innovative approach provided much needed improvements to the local economy. It enabled a developing and formerly impoverished city to empower itself and vastly improve its conditions in the remarkable span of a single generation.

In 1990, Curitiba was honored with the United Nations’ highest environmental award, granted by the United Nations Environment Program (UNEP).

Excerpt from Of Human Wealth by Bernard Lietaer and Stefan Belgin