Synthesis of the Brazilian Economy

BRAZIL ECONOMICS - Report 03 Oct 2022 by Affonso Pastore, Cristina Pinotti, Paula Magalhães and Diego Brandao

ELECTIONS IN BRAZIL, GLOBAL DECELERATION AND A SEEMINGLY INTRACTABLE WAR – Despite the campaign urging protest votes in favor of Lula, the result of 48.4% for Lula and 43.2% for Bolsonaro provided definition of the second round, on October 30th. The votes for Simone Tebet (4.2%) and Ciro Gomes (3%) can morph into null votes, abstentions or mainly support for Lula. Nevertheless, the prolongation of a campaign marked by mutual insults instead of serious policy proposals will add little regarding the plans of each one, besides aggravating an already sharply polarized environment.

ELECTIONS – The presidential race has been clearly exposing why Brazil remains mired in the mud of slow growth with high corruption: disparagement of democratic institutions, fiscal responsibility and the search for the common good has been a constant since the end of the FHC administration. This has been occurring through a self-feeding process, steadily eroding the conditions for the country to find sustained economic and social development with environmental protection. Except for brief interludes supported by favorable external conditions or temporary initiatives of certain sectors in search of gains, there are no signs of willingness to rebuild the key institutions that have suffered the greatest harm in recent years.

This is the case of the legislative branch, sullied by the Mensalão scandal, followed by Lava Jato, and now bedeviled by the outrageous “Secret Amendments”. The parties’ funding and spending lack transparency and the electoral rules favor incumbents. Is there any evidence of a serious attempt to reverse this tendency of deterioration? Unfortunately, the answer is no.

The judiciary, whose solidity is a precondition for the functioning of any civilized society, is being degraded by evident permeability to political interests. Nevertheless, together with a free press, the judicial branch has been operating as an efficient bulwark against coup plotters of all stripes.

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