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BRAZIL: Presidential dual rhetoric to continue to delay reform effort

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President Jair Bolsonaro’s capacity to operate in two ostensibly conflicting worlds – that of social media and his own government – reached a high point this week. Bolsonaro has been as erratic as ever, resorting to confusing doublespeak. The net result is further delays in the reform effort as Congress spends more time reacting to provocations than to pushing forward its ambitious agenda in the short window of opportunity that extends to mid-year when all politics veers towards the October municipal elections.

The week started with the government feeling confident that it could win a vote in the Senate and maintain presidential vetoes to the Budget Directives Law (LDO). An agreement between the government and Congress seemed to suddenly gain momentum instead but the president, afraid as usual that his staunch supporters might misinterpret his attitude as succumbing to pressures from the legislative branch, went on social media to deny any such agreement. Put off, Congress then delayed the vote that would maintain the vetoes in exchange for the government’s commitment to accept the “return” to its purview of only BRL 11bn of the BRL 30bn allocated to the rapporteur of the draft bill. On 4 March, Congress ultimately voted to maintain the vetoes after the government came back to the negotiating table, apparently with a tougher position on the part of the president himself, who demanded and got half of the rapporteur’s funds. The president then went on social media to emphasize the fact that Congress maintained his vetoes when in fact there was an agreement behind the outcome.

The to-and-fro style is already a hallmark of the president’s way of governing. However, he has been more cautious when it comes to economic issues, particularly those that could jeopardize the economic growth he needs to ensure electoral success in 2022. Bolsonaro’s distance from Congress, allowing it to own the reform agenda as much as possible, worked well with the pension reform. However, Bolsonaro seems to be more willing to take risks than he might have been in the first year of his mandate, thereby generating uncertainty. Moreover, Congress is now understandably less inclined to move alone on politically costly initiatives such as the administrative reform. The tax reform still has to re-allocate burdens across economic sectors in order to be as revenue-neutral as possible and that also has a political cost Congress does not want to endure by itself.

To make matters worse, the heightened sense of uncertainty extends to the government itself and hits the nervous center of the government: the Economy Ministry in general and Minister Paulo Guedes in particular. Guedes made a reference this week to how “we have only 15 weeks to change Brazil” in a meeting with social movements – sending shivers down the political and financial systems’ spines. His frustration with the president’s hesitation to move on the administrative agenda is well known and his own hesitation in sending a clear proposal from the government for a tax overhaul points to lesser determination than necessary to make it happen, particularly in the short timeframe available.

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BRAZIL: Presidential dual rhetoric to continue to delay reform effort

President Jair Bolsonaro’s capacity to operate in two ostensibly conflicting worlds – that of social media and his own government – reached a high