troubled conjuncture

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The country's current dramas: a stalled economy, health crisis, Bolsonaro's impeachment

I go back to talking about our troubled political and economic situation. The political prevails over the economic, as usual. More than usual. The reason is that Brazil has an exceptionally inept government, which acts as a drag on the economy in all or almost all relevant areas. Brazil is the last of the G20 countries (the group that brings together the 19 main economies in the world and the European Union) still governed by a Trumpist. All over the world, including and notably in the United States, the extreme right wave of recent years has begun to ebb.

In Brazil, we already have the first signs of this, but they are still tenuous, incipient and even debatable. There are those who deny that the process has already started here. It is argued that Bolsonaro remains strong and has shown remarkable resilience to unfavorable news.

Does the economy recover?

One of the factors that will influence government support will be, as always, the performance of the economy. It is even possible that there will be some economic recovery in 2021, although of the federal government, reflecting, for example, a probable improvement in the world situation with the arrival of vaccines. The arrival of vaccines in Brazil, although late, tumultuous and incomplete, should also help. But a substantial recovery in activity and employment is not on our horizon.

I open a small parenthesis here to remind you that the annual GDP growth rate (calendar year 2021 over calendar year 2020) will be deceptively high. There is a significant inheritance (carry over) in this year's GDP statistics, due to the recovery observed in the second half of 2020. This carry over is estimated between 3% to 4%, depending on GDP in the last quarter of 2020. This means that the annual rate of expansion this year will be in the range of 3% to 4%, if GDP remains stationary at the level of the end of 2020. Growth at the margin (as measured by the fourth quarter of 2021 over the same period of 2020) tends to be small at best, certainly nothing that could offset the recessions of 2015, 2016 and 2020.

The significant recovery of an economy, especially in conditions like the current ones, requires the initiative and coordination of the State. This is exactly what we are sorely lacking. The State does not exist in the abstract and manifests itself, to a large extent, in the federal government of the moment. State and local governments can compensate, in part, for federal incompetence. Congress and the Judiciary can, in theory, impose limits on the destructive tendency coming from the Executive. Two things have been happening. But, firstly, none of these instances of public power is able to replace the federal executive. And, secondly, none of them is free of flaws, which limits their ability to act in favor of the national interest.

The ills of these other instances, although very significant, cannot be compared to the almost total disaster that emanates from the Bolsonaro government. We have a government that confesses, with an open heart, that it came to destroy. And worse: he doesn't have the vaguest and remotest idea of ​​what to put in place of everything he's destroying. At the risk of raining a little on the wet, I ask the reader a question: emphatic: point, please, one, just one area of ​​government that is acting well, doing something constructive. Sincere question. I wonder. I myself look and look and I can't find a single example. I don't think it's out of ill will.

Impeachment and opinion polls

With Bolsonaro, the Brazilian crisis reached a new level of severity. The neoliberals who stayed by the wayside, the leaders of the 2016 parliamentary coup, would not have the courage or capacity to produce the damage that we have seen since 2019 and that we will continue to see until the current president is removed from power, through impeachment, interdiction, resignation or electoral defeat.

Two more years of destruction seems unbearable. Thus, it is natural that, in view of some recent events, the idea of ​​impeachment has resurfaced with force.

The reader will agree that there are legal reasons to remove Bolsonaro from power. There are many crimes of responsibility committed. I dare say that never has a President of the Republic given so many reasons for impeachment and even for impediment due to mental incapacity to hold office.

It is necessary, however, to recognize the sad reality. If Bolsonaro can be considered incapable, and there are strong indications of this, his illness is undoubtedly part of a larger illness of Brazilian society. Bolsonarism precedes Bolsonaro and will continue after him.

Any questions? The strange character was elected after all. And worse: it tells, after all, everything that happened, with considerable support from the population, judging by the opinion polls produced by different institutes. Polls carried out up to the beginning of January showed that something like 1/3 of the population considered the government “good” or “great”. With the usual swings, polls suggested that the electorate was divided into three roughly equal parts: 1) those who support the government (considering it “good” or “great”); 2) those who reject it (“bad” or "terrible"); and 3) those who are neutral (either because they consider it regular, or because they say they neither support nor reject it, or because they declare themselves uninformed or disinterested). That was, in very summarized terms, the picture that emerged from the surveys from mid-2019 until the beginning of this year.

In January, the picture changed. The most recent surveys by XP/Ipespe and Exame/Ideia suggest a significant deterioration in the government's assessment. The first points to an increase in the “bad/very bad” block from 35% to 40% and a drop in the “good/great” block from 38% to 32%. The second indicates an increase in “poor/bad” from 34% to 45% and a drop in “good/great” from 38% to 27%. But it is too early, of course, to say whether they point to a trend.

As is well known, research is of crucial, perhaps decisive, importance. Impeachment is unlikely to succeed if Bolsonaro has firm support from around 30% of the population.

I risk going into the realm of conjecture. Support for him should drop from now on, perhaps significantly, in line with what the last two polls indicate. The forecast, precarious like all political forecasts, is based on two main arguments.

The first is the interruption of emergency aid in January – without having been replaced by anything so far. The aid, everything indicates, brought in 2020 great support to the federal government in the poorest population. In Paulo Guedes' plans, the aid will be replaced by a sharp recovery in activity and employment levels. The economic team spares no rosy forecasts. They even predict a V-shaped recovery and declare that the Brazilian economy will surprise the world, among other fantasies. The economic team approach, being so unrealistic, may not even prevail. The drop in polls may spur the government to seek some replacement, even partial, for the late aid.

As I mentioned, the recovery in economic activity will be modest – and the recovery in employment levels will be even more modest. I don't see why the usual pattern in which employment responds with a lag to the recomposition of sales and production will be broken. If unemployment remains high and if the jobs generated are mainly of a precarious nature, emergency aid will be greatly needed. And the political burden will rest primarily with the federal government.

The second reason to predict a drop in support for Bolsonaro is the worsening of the Covid-19 crisis. The evidence that the federal government acted incompetently, not to say criminally, in confronting the pandemic is growing, not to say wide open. The chaos in Manaus, with the deaths of patients due to lack of oxygen, was yet another clear indication of the mistakes and irresponsibility of the President of the Republic and the Ministry of Health. There are obvious partners in this debacle, notably the government of the State of Amazonas and the city of Manaus, but the federal government will not escape suffering from national public opinion. Added to this is the failure on the issue of vaccines and the important victory on this issue by a political opponent and open critic of Bolsonaro, the governor of São Paulo.

Isolated at the international level, subject to growing criticism at the national level, it will be surprising if Bolsonaro sustains, throughout 2021, a level of support similar to that he had at the end of 2020. And if the drop in support and the increase in rejection are significant , the political conditions for his removal will be given.


*Paulo Nogueira Batista Jr. he was vice-president of the New Development Bank, established by the BRICS in Shanghai, and executive director at the IMF for Brazil and ten other countries. Author, among other books, of Brazil doesn't fit in anyone's backyard: backstage of the life of a Brazilian economist in the IMF and the BRICS and other texts on nationalism and our mongrel complex (LeYa).

An abridged version of this article was published in the journal Capital letter, on January 22, 2021.


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