The Federal Government’s pandemic response is doubly chaotic: is incapable of coordinating health action; and lacks a focused approach for economic recovery. 

President Bolsonaro must abandon political battles – concentrating on 3 vital proposals, it could:
– save millions from extreme poverty;
– support small / medium-sized business – the heart of Brazil’s job market;
– and approve 3 vital measures for recovery – tax and administrative reform; and a legal framework for the last utilities sector not yet regulated.

Bolsonaro’s main approaches to the pandemic – (a) chloroquine as a cure, and (b) countermanding quarantine decisions of the state governors – show he is severely out of touch with reality and unable to handle real problems.         The numbers reflect the tragic lack of leadership: deaths in the last 30 days deaths have escalated nearly 700%, to over 15,000.

Extreme poverty

As well as frightening death figures, the pandemic has left a wake of social problems that will take years to cure.

According to World Data Lab estimates, it has increased the number of Brazilians living on less than US$1.90 a day from 8.2 million in 2019 to 9.7 million today.

The survey data implies that Brazil will take five years to bring these 1.5 million Brazilians back from extreme poverty.

 

Emergency assistance: use cash to save lives, not feed privilege

While desperate poverty expands, Bolsonaro argues for state corporatism. He resists moves to freeze government workers’ salaries in general, and has explicitly excluded a freeze for federal workers. Not taking this route could have helped the country save more than 32 billion Reais that could be better employed fighting extreme poverty.

Reforms essential for Brazil’s recovery

Instead of fighting state governors about quarantine, Bolsonaro should be making efforts to get Congress to pass three measures that are vital to kick-start a recovery:

  • tax reform;
  • administrative reform; and
  • legislation to regulate water/sewerage services – the only utilities/infrastructure sector still with no regulatory framework.

These measures are fundamental if Brazil is going to:increase the economy’s productivity, boost investment in infrastructure, and combat the inefficiency and exorbitant cost of the state.

But Bolsonaro’s heart beats to the rhythm of state corporatism.

Need for administrative reform

With millions of Brazilians unemployed, and companies closing, government employees in every one of the 60 federal public careers still enjoy lifetime job stability, automatic promotion unrelated to performance, and innumerable privileges and benefits. Brazil’s spending on government workers is one of the highest in the world – it consumes R$ 300 billion per year (14% of GDP), and provides extremely low-quality public service. Brazil is surely a rare case in history – a state that creates islands of privilege for government workers, helping increase inequality in one of the world’s most unequal nations.

Tax reform; and a legal framework for essential water utilities

On a proposed tax reform, the government continues to stall – perpetuating Brazilian citizens’ suffering under one of the world’s most complex and expensive tax systems.

The draft law on a regulatory framework for water and sewerage infrastructure and utilities has been halted in the Senate since November, and the government is making no move to get it approved – even though this could attract billions of Reais in private investment even before the end of this year.

The federal government needs to abandon its political face-offs – against science, and against state governors – and focus its attention on real proposals that will revitalize the economy.

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