Bolsonaro’s government inherited an economic mess. Unemployment runs at about 13 percent, GDP growth contracted 0.2 percent in the first quarter, and, in June, the country’s Central Bank cut its 2019 growth forecast by more than half. This coincides with a slowdown in much of Latin America, but Brazil’s economic hole runs deep. “This is what I have been calling the tropical version of secular stagnation,” explains Monica de Bolle, senior fellow for the Peterson Institute for International Economics and the director of Latin American Studies at Johns Hopkins’ School of Advanced and International Studies. The economist spoke with AS/COA Online’s Luisa Leme about Brazil’s difficult outlook, as well as the new presidency’s missteps during his first six months in government.
So how can Brazil revive an economy that has lost its dynamism? And can the Bolsonaro government get the job done? De Bolle agrees Brazil’s pension reform, which could pass within days, is important. “But it isn’t going to bring growth back and it isn’t the one sort of silver bullet that’s going to make the economy magically work again,” she says.
Another piece of good news is the agreement on the Mercosur-EU trade deal, particularly given the government’s aversion to globalism. However, “there are other things that are needed, which go beyond [Economy Minister] Paulo Guedes’ mandate,” she says. De Bolle explains those include education-related policies or social programs to alleviate poverty—areas that are either absent from Jair Bolsonaro’s plans or contaminated by ideological debates.
“The girls-wear-pink-and-boys-wear-blue kind of thing doesn’t do anything for the actual policy discussion that Brazil needs.”
Moreover, getting mired in the debates comes with a political cost. De Bolle explains that Speaker of the House Rodrigo Maia, who has more traction on Twitter than all of Bolsonaro’s cabinet combined, understands the need for the country to grow its economy again. What’s less certain is how many victories he will want to give to the Bolsonaro administration, says de Bolle, adding: “[Maia] may want to keep some of these victories for himself if, by any chance, he does get elected president.”
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Luisa Leme produced this episode. The music in this podcast was performed at Americas Society in New York. Learn more about upcoming concerts at musicoftheamericas.org.