Disregarded and transgressed. The motto “Ordem and progress” imprinted on the magnificent Brazilian flag, green-gold with a blue circle that welcomes the stars of the Rio de Janeiro firmament, seems chimerical, today more than ever. “Ordem and progress”, a style that is far removed from the positivist philosophy of Auguste Comte, which it should have inspired, according to the fathers of the country. Jair Bolsonaro’s presidency was so catastrophic that it deserved a Brazilian Senate investigation into the handling of the pandemic: “Crimes against humanity, violation of health measures, fake news, and incitement to crime.” These are some of the accusations that appear in the dossier.
Agriculture sector most in crisis
The evolution of the macroeconomy is a reflection of the pandemic: Brazil enters a technical recession, with the second consecutive quarter of growth with the minus sign ahead. Between July and September 2021, GDP fell by 0.1%, after -0.4% in the second quarter and + 1.2% in the first. The most affected sector was agriculture, with a decline of 8%. The growth rate of consumer prices exceeds 10% per year. Stagflation is therefore emerging: that macroeconomic phenomenon characterized by stagnation and inflation.
Paulo Guedes, current Minister of Economy, defends himself by showing the G20 data, a generalized surge in inflation. “The growth rate of consumer prices is recorded everywhere and the factors that determine its rapid rise are 3: the surge in consumption after the restrictions due to the pandemic, the increase in oil prices, new consumer habits”.
The link with China
In a recessionary context, however, it should be noted that economic relations with China are a strong anchor to Brazil’s prospects. In 2020, 32% of the value of Brazilian exports landed in China, far exceeding traditional trading partners such as the US (10%) and Argentina (4%). On the other hand, China has identified Brazil as a destination for the direct investments of its companies. Between 2007 and 2020, 176 projects were completed, for a total investment of 66.1 billion dollars, of which: 48% for the electricity sector, 28% for the oil sector, 7% to the extraction of metal ores, 6% to the manufacturing industry.
The unknown of the next elections
The economic factors – underline the analysts – are flanked by the political ones, with the uncertainty of the presidential elections of 2022. Less than a year after the presidential elections, the budget of Bolsonaro’s management seems negative. Ruben Ricupero, former Minister of Finance and even more of the Environment, expresses a very harsh judgment: «The budget of the Bolsonaro government is very negative. Without exaggerating, it can be said that Bolsonaro is a man who does not govern, has no propensity for administration. From the first day of the electoral campaign he proposed a sort of cultural war, without ever taking an interest in the administration and attributing a completely personal character to the presidency, with his extreme ideas especially on the occasion of the pandemic ».