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An urgent agenda for Bolsonaro in Brazil

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Once we get beyond the myths surrounding the long presidency of Franklin Delano Roosevelt, we soon recognize that one of FDR’s successes was to establish a myriad of symbols that captured the imagination of world politics. Among one of the most enduring symbols is the “first 100 days” of an administration as a milestone of its achievements.

“100 days” is basically an arbitrary number. For better or worse, however, it has become the rule by which many evaluate whether an administration will succeed or fail. With that in mind, let’s ask ourselves what are likely to be the main challenges facing another president in another country – the conservative populist Jair Bolsonaro of Brazil.

Brazil has been in economic crisis since 2014. The Keynesian economic policy implemented by former president Lula da Silva and his successor Dilma Rousseff in making consumption grow through the expansion of credit has led to negative economic growth and accelerated inflation. In 2015, for instance, Brazil’s GDP fell 3.5 percent while inflation surpassed 10 percent. The subsequent economic downturn plus the corruption scandals contributed massively to Rousseff’s impeachment and the rise of Vice-President Michel Temer.

Temer’s economic policy was orthodox. In a short space of time, he was able to lower inflation, implement a constitutional ceiling for public expenditure, liberalize some labor laws and avoid a currency crisis. Despite his successes, however, Temer saw his political capital eroded by corruption scandals in his administration. He subsequently failed to approve the most important measure of his economic agenda: the reform of the social security system.

Bolsonaro will inherit a country in an economic situation better than the conditions which Temer inherited from Rousseff. Nonetheless, the deterioration of public accounts remains an urgent problem. Another major problem is the social security system. It is a leviathan that has been consuming public resources at a steadily increasing rate since 1988.

A perfect example of a Ponzi scheme, the Brazilian social security system was designed to meet the demands of a rural population with a low life expectancy in a country that had an age pyramid with a huge base. The aging of the economically active population, however, has exposed the internal contradictions of the system. Making matters worse is that public sector unions have captured the public administration and use this to block reformist initiatives.

Bolsonaro has made clear that social security reform will be the number one priority of his future government. His chief economic adviser and future Finance Minister Paulo Guedes has also stressed the importance of approving social security reform in the “first 100 days.” One should also expect a wave of deregulation and economic liberalization led by Guedes.

Bolsonaro has also promised tax reform, which will reduce the concentration of resources in the hands of the federal government, as well as a program of privatization. It is unlikely that the state oil corporation, Petrobras, or the state-owned Bank of Brazil will be sold to the private sector, but the market for production and distribution of energy must undergo a new wave of reforms that will reduce Petrobras’s size concerning the total oil market.

To recall a critical analysis made by the economist Murray Rothbard in his book Exit the Iron Lady (1990) of Margaret Thatcher’s government, the bolder and faster Bolsonaro is in implementing a program of economic liberalization, the better the political results will be. With the return of economic growth and low inflation, Bolsonaro’s popularity is likely to grow, which matches the poll-trends of all Brazilian presidents so far. Moreover, if Bolsonaro can master the economic challenge, the implementation of other reforms, such as the struggle to turn back the leftist Cultural Revolution, could be engaged with great potential success.

The newly elected Congress will be significantly more conservative than the current one. Many new members of Congress were elected in the conservative and populist wave that elected Bolsonaro. The informal political coalition which backed him will have the majority of the seats. Therefore, a conservative agenda on issues such as education, public morals, and security has the potential to advance without much resistance.

The Brazil and the world which Bolsonaro will find himself engaging in 2019 is significantly different from the one his predecessors had to deal with. The announced liberal international order proclaimed by Francis Fukuyama’s The End of History and The Last Man (1992) is falling apart. The populist wave that has been sweeping the world has given a new tone to international relations. The world will be significantly more unstable mainly because of the geopolitical conflict between China and the United States. But if Bolsonaro keeps up with the idea of opening Brazil for world trade, great opportunities will arise for a country with an economy like Brazil’s.

Then, for course, there is the issue of cultural and political resistance to Bolsonaro’s agenda. He will have to face a deep state that refuses to hand over power to the one who was elected and a left-wing media establishment that has already begun the campaign to de-legitimize his government. Universities and the intellectual class, openly hostile to him, will tend to further radicalize. In political terms, Bolsonaro will have to create alliances in a Congress where there are more than 20 political parties and to do so in a way that avoids any taint of corruption.

In practically everything, Bolsonaro will face the same difficulties that President Donald Trump does, but with some differences in Bolsonaro’s favor. First, he is the undisputed leader of the Brazilian right. The overwhelming nature of his victory in the elections will mean his position will not be challenged for a long period. Bolsonaro effectively controls his political movement, and he has the authority to arbitrate any disputes that arise within it. Secondly, Bolsonaro has the effusive support of the military. It will provide many of the necessary personnel to fill positions in the public administration.

Third, the Brazilian population is mostly conservative in social affairs. That means there will be a natural alignment between popular support and Bolsonaro’s political agenda. Fourth, Bolsonaro will have the example of Trump. Just as he was able to learn from the American president’s electoral strategy, he could learn from Trump’s mistakes since he will face an opposition that is substantially the same Trump faces in the United States.

It is still too early for peremptory judgments on how the Bolsonaro administration will act. Many variables are still unclear, especially about how he will articulate a congressional base that will allow him to advance a free-market agenda in economics and a conservative one in social affairs.

The left itself has its own challenges, not least among which is that its members seem not to have understood what happened. The fate of the left is linked to Bolsonaro’s success. If he succeeds, the left will have to move to the center to ensure its political survival in the short term. In any case, Bolsonaro has already been able to transform Brazil into a normal country – a country in which there is a political right and left, instead of a center-left and radical left. That itself will be a stupendous achievement.

Homepage photo credit: Brasília – O deputado Jair Bolsonaro durante o adiamento da votação de processo contra Jean Wyllys (Wilson Dias/Agência Brasil). Date:29 March 2017, 15:35. Author: Agência Brasil Fotografias. Wiki Commons.

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Silvio Simonetti Silvio Simonetti is a Brazilian lawyer, graduated in international affairs from the Bush School at Texas A & M University. He is currently a Research Fellow at the Acton Institute. Silvio loves history and the Catholic Church.

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