After the election of Jair Bolsonaro, there was some skepticism about the new administration’s ability to liberalize the economy. His finance minister Paulo Guedes is trying to change those perceptions. John Pual Rathbone and Andres Schipani report at the FT:
The election victory in October of Mr Bolsonaro, a former army captain who admires US president Donald Trump and has frequently praised Brazil’s military dictatorship, was widely seen as part of the global shift to rightwing nationalism and a threat to Brazilian democracy.
Mr Guedes insisted that was a mischaracterisation. “It is the opposite. That was my message in Davos,” he said. “Brazil is a vibrant democracy . . . Bolsonaro’s election showed that . . . [we will finish] privileges. Pensions is a machine of regressive and perverse income transfers.”
The challenges facing Mr Guedes include a yawning fiscal deficit, snowballing public debt, near record unemployment that has left about 12m people without work, low productivity and an anaemic economic recovery. However, external accounts are broadly in balance and foreign reserves stand at an ample $377bn.
The recession and corruption scandals set the backdrop for an election in which almost 60m Brazilians voted for Mr Bolsonaro, who promoted Christian family values, anti-corruption and a far-right law-and-order platform that resonated widely given a record 64,000 homicides in 2017.
Mr Guedes’ recruitment as economics adviser marked a tipping point in the campaign, as it brought in previously sceptical investors, business groups and entrepreneurs.
“People asked me: how can a liberal join conservatives? They will only bring disorder. But disorder is already here: more people are dying each year here than US soldiers did in Vietnam,” he said. “The president will bring ‘order’, the liberals ‘progress’,” he said, referring to Brazil’s national motto “ordem e progresso”.
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Jeremy Jones, CFA
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