Economy, political dialogue and international reintegration: the biggest challenges for the new president of Brazil

After Lula’s victory, the range of challenges he faces is wide. A job that will go through the revival of the economy, the reintegration of Brazil on the international scene and dialogue with a Congress that appears to be the key to the development of its new political project.

Twelve years after his last presidency, Luiz Inácio Lula da Silva returns to the Planalto Palace. The house of government in which he served two terms between 2003 and 2010, sees him look back on his 76 years of life. However, the needs and concerns of the Brazilians who saw him lead the country then are not the same as today, and the political challenges of the new president will also have to be updated.

a stressed economy

Inflation, a word that is repeated around the world following the more than two years of the Covid-19 pandemic and the more than eight months of war between Russia and Ukraine, is no stranger to largest economy in South America.

For various analysts, this was one of the main factors voters considered ahead of the election. According to Bloomberg, “the state of the economy is, by far, the main concern of Brazilian voters”, detailed the news agency.

in conversation with The third the economist and professor at the Department of Political Science of the University of Sao Paulo, Glauco Peres da Silva, assured that “public spending has been compromised”, so that the next presidential period “will have difficulties in making the investments necessary to reverse the scenario of economic crisis that we are going through”.

Currently, the country has its lowest unemployment rate in seven years, but it is still above 9%. By contrast, Brazil is expected to end the year with a 2.7% expansion in gross domestic product, as well as a slowdown in inflation of around 5.8%, beating expectations that economists had made at the start. of 2022. , according to Bloomberg.

Lula supporters gather during the second round of presidential elections in Brasilia on October 30, 2022. Photo: Reuters

Faced with this last point, one of the programmatic axes of the leader of the Workers’ Party (PT) aims to review the ceiling on tax expenditures and the current Brazilian tax system. Established in 2016 by the government of Michel Temer, the policy aimed to prevent the expansion of spending by the government in power above current inflation, as well as to freeze the nation’s budget for two decades.

On the other hand, in an attempt to reactivate the businesses of micro and medium entrepreneurs, Lula promised to renegotiate the debts of companies affected by the pandemic. According to the Brazilian Support Service for Micro and Small Enterprises (Sebrae), around one million companies in this category have had to close due to the financial crisis derived from Covid-19.

“The future may even wait for us to do something new, but we cannot let you die from the debt you have incurred due to the pandemic. We will have to take their debt negotiation very seriously,” said said Lula during a meeting with small entrepreneurs in Sao Paulo before the first round, Gazeta do Povo reported.

The basic interest rate, another factor of citizen interest, is at its highest for six years, reaching 13.75% per year. A figure which, according to economists quoted by Globo’s G1 outlet, should experience a slight decrease in 2023, but which will remain a problem that the new tenant of Palazzo Planalto will have to face. As for economic growth, which registered 4.6% in 2021, it will also see a slowdown over the next year, adding to the list of tasks to be accomplished.

Congress and the political key

Both the debates on the laws and the discussion of the budget with which the leader of the PT will govern must go through a Parliament with which Lula will have to dialogue and negotiate for the approval of his program. For Glauco Peres da Silva, the new government “must focus on resuming negotiations with Congress in order to promote a positive public policy agenda. This is the trickiest and hardest to solve.

According to the website La Politica Online (LPO), the president’s great fear is that the legislative body will retain the same power that it had from Jair Bolsonaro, especially with regard to the so-called “secret budget”. Thanks to this mechanism, in force since 2020, a parliamentarian is responsible each year for suggesting to federal ministries how and where to allocate budget items, with the deputy playing the role of “rapporteur”.

Gesture of Lula’s supporters during the second round of the presidential elections in Rio de Janeiro. Photo: AP

Faced with this reality, Peres da Silva told this media that “it will be necessary to resume the preparation of the budget, where the policy of the ‘Secret Budget’ makes the President the hostage of the Legislative Power, and also to plead for the restoration of credible agreements with parliamentarians”.

With the renewal of the entire Chamber of Deputies and half of the Senate, “the next Congress will therefore in any case play a key role”, political scientist and consultant Antonio Augusto de Queiroz told the LPO. And the preliminary scenario, where defeated President Bolsonaro’s allies have won a historic victory, indicates that Lula’s task will not be easy.

international reintegration

Anti-globalization rhetoric, one of the pillars of Bolsonaro’s speech, will seek to be left behind by the leader of the Workers’ Party. The current president has threatened to pull Brazil out of the World Health Organization (WHO) and do the same with the Paris Climate Accord, though he did not specify such steps.

Such positions by Bolsonaro have led Brazil to distance itself from the United Nations, which it accuses of threatening the country’s sovereignty, or of minimizing the consequences of Covid-19 at the worst time of the pandemic.

A reinstatement that goes hand in hand with a new environmental policy, a subject on which Bolsonaro has been harshly questioned throughout his administration. According to data from Brazil’s National Institute for Space Research (INPE), deforestation in the Brazilian Amazon has increased compared to the start of 2019, reaching the highest levels since 2008, when Lula was president.

Brazilians in Canada vote in the second round of the presidential election at a convention center in Toronto. Photo: Reuters

According to Peres da Silva, one of the factors to consider is precisely the management of affairs that have disappeared from the map under the Bolsonaro government, or have lost a lot of ground. “Another political aspect to deal with concerns the resumption of important public policies. The Bolsonaro government has withdrawn resources from many public policies, such as organizations fighting deforestation and promoting culture,” he said.

A report by the Hutukara Yanomami Association, an organization that defends the Yanomami people of Brazil, assured that in 2021, illegal mining increased by 46% compared to the previous year in the Yanomami indigenous territory in the State of Roraima, details the magazine. Nature.

Given the loss of the environmentalist seat held by the South American giant, one of the incoming president’s plans, according to UOL, would be to quickly convene a climate summit, either regionally or even globally. Event in which Lula would raise his environmental commitments and forge alliances in this regard, as well as reduce the mistrust of the international community on the subject, detailed the Brazilian media.

Source: Latercera


Leave a Reply

Your email address will not be published. Required fields are marked *