New Brazil leader faces hard times

TO PICK NEXT PRESIDENT THIS WEEKEND Will have three major challenges in a violent, poorly educated nation.

Whoever wins Brazil’s presidential election on Sunday will have their work cut out, juggling market pressure to implement austerity measures while trying to drag 23 million people out of poverty.

According to a World Bank report presented to the 13 candidates, Latin America’s biggest economy is facing “three challenges: a major fiscal imbalance... a lack of sustainable growth in productivity... [and] the state’s ever-increasing difficulty in providing basic public services”.

In Brazil, “part of the population still lives in the 19th century and the other part is already in the 21st century,” says Getulio Vargas Foundation economist Marcelo Neri.

Neri says millions of Brazilians have a poor education, live without access to water and sanitation and are confronted by “levels of violence worthy of a war”.

The economy is struggling. Public debt hit 77% of gross domestic product (GDP) in July, up from 56% in 2014. The World Bank says it won’t stabilise unless Brazil manages an unlikely 4% annual growth through to 2030.

Without deep structural reforms, debt could reach 140% of GDP, the report says.

Hugely unpopular outgoing President Michel Temer has frozen public spending and left hanging the delicate question of pension reform, considered by the markets as a cornerstone to fiscal consolidation.

Most presidential candidates are proposing pension reform and a programme to reduce the public deficit, but without going into specifics on the figures for fear of losing votes.

The problem is that, while candidates focus on trying to win votes, they might ignore the most pressing issues affecting those most in need.

Neri says the country needs social “inclusion policies” but fears “the elections aren’t heading in that direction”.

Six million (33%) more people live in poverty than in 2014, the Getulio Vargas foundation says.

There are also 13 million people unemployed in a country with a population of 208 million and which ranks ninth in the world in terms of social inequality.

Marcos Lisboa, president of teaching and research institute, Insper, is concerned that all the candidates are travelling a worryingly well-trodden road.

“The worry is that debates on the most urgent problems are ditched in favour of proposals that either reproduce the disaster the country went through these last few years or that promise the moon,” he says.

Neri adds: Brazil needs to choose the “middle path”. – AFP