Challenges ahead for Bolsonaro
Tackling Brazil’s pension system a priority
Brazil’s President-elect Jair Bolsonaro has signalled that his Administration will make tackling the country’s budget-crushing pension system a top priority, doubling down on a campaign promise that made him the choice of the business community despite frequently saying he doesn’t understand the economy.
The tough-talking former Army captain cruised to a 10-point victory on Monday by capitalising on widespread frustration in Latin America’s largest economy, which has fallen on hard times less than a decade after being a darling of investors among emerging markets.
Bolsonaro’s victory moved Brazil, the world’s fourth-largest democracy, sharply to the right after four consecutive elections in which candidates from the left-leaning Workers’ Party won.
Perhaps more than belief in Bolsonaro himself, his victory represents a widespread rejection of the Workers’ Party, which was at the centre of a massive corruption investigation and oversaw both Brazil’s boom and its bust.
Like other right-leaning leaders who have risen to power around the globe, Bolsonaro, who takes office on January 1, built his popularity on a mixture of often outrageous comments and hardline positions, but he consolidated his lead by promising to enact marketfriendly reforms. In the end, many outside his base in Brazil accepted the bargain he offered: Swallow his more extreme views and his crude way of expressing them in exchange for economic policies they hoped would put Brazil on the path to recovery.
In a sign of the challenges ahead, the hashtag EleNaoEMeuPresidente — HeIsNotMyPresident in Portuguese — was the top trending topic on Twitter in Brazil yesterday.
In the face of what’s expected to be stiff resistance, Bolsonaro will have to move quickly to reassure international investors that he’s up to the job of righting Brazil’s finances.
A looming US$34 billion ($52b) deficit in 2019 has economists warning that without drastic spending cuts or substantial tax increases the country is only a year or two away from a full-blown crisis, which could include run-away inflation and soaring borrowing costs.