Heading to the Abyss, at High Speed
The Bolsonaro administration had been trying to follow a liberal program aimed at restoring the country to steady growth. It was making very slow progress toward the reforms necessary for fiscal consolidation when the COVID-19 pandemic hit, dooming the country to a recession and destroying the president’s plans to achieve strong economic growth as an “instrument” to facilitate his reelection in 2022.
However, showing total insensitivity to the humanitarian problem, he has conspired against social distancing and butted heads with governors, Health Minister Mandetta, and Congress, on which he relies for approval of the reforms. Now aware that the recession is conspiring against his reelection dreams, and seeking to curry favor among his hardcore ideological supporters, he has expressed antidemocratic attitudes, including appearing at a public demonstration in favor of closing Congress. In a clear manifestation of economic populism, he created a Crisis Office, headed by an Army general, and announced, without consulting with Guedes, a program of investments in infrastructure that would use government money besides concessions to the private sector. Finally, in an even more incredible act, he announced his intention to replace the superintendent of the Federal Police, with the apparent purpose of interfering in sensitive investigations, prompting the resignation of Justice Minister Sérgio Moro.
The country is thus passing through three simultaneous crises: the pandemic; an attempt at a profound change in the economic bearings, with the launch of a program for investments in infrastructure that if executed will make progress toward fiscal consolidation impossible; and a political crisis, with the president’s interference in the Federal Police, leading to Moro’s resignation.
Unfortunately, the nation is now facing a fork in the road, in which one route, with unknown probability, is the opening of an impeachment process, and the other is his clinging to power. In light of so much uncertainty, the only possible forecast is a sharp aggravation of the economic and political situations
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