The week of September 7 comes to an end as one of the most troubled week of the Jair Bolsonaro (non-party) government. The coup threats did not materialize, but political instability worsened and should compromise the liberal agenda advertised by his own government and symbolized in the choice of Paulo Guedes as Economy Minister, still in 2018.
The coming and going of the president’s speeches immobilizes Congress and makes even more distant the possibility of approving matters defended by big businessmen and considered unpopular.
“Parliament reflects the posture of the Executive Branch. If the president proposes the early contest of the 2022 elections, Congress is infected. Unfortunately, this is what we see in 120 days of elections”, analyzes Leandro Gabiati, director of Dominium Consultoria in Institutional and Governmental Relations, which monitors the Legislative agenda in Brasília.
Dominium serves companies in sectors such as retail, energy, agribusiness and real estate, and is attentive to the “thermometer” of tensions between the State and investors.
“This government posture is already reflecting in negative numbers for the economy in 2022, whether in relation to inflation or lower growth”, he assesses.
If there has not yet been an official disembarkation of financial capital and businessmen who represent the greater part of the Gross Domestic Product (GDP), Bolsonaro’s coup declarations erode the Legislature.
“There are two movements after September 7th, and they obey a very clear division, mainly in the Chamber of Deputies”, explains Gabiati.
“On the one hand, the group of parties led by [presidente da Câmara] Arthur Lira [PP-PI], which form an alliance with the government (PP, PL, PTB, part of the PSL). On the other, ‘center’ parties, with parliamentarians who even vote a lot with the government (Democrats, PSD, MDB, Citizenship, PSDB, Podemos).”
For the director of Dominium, Lira’s less-than-incisive reaction to the actions of September 7 was not a surprise.
“Lira is an ally of the government. His main partner is Ciro Nogueira [PP-PI], which today occupies the Civil House, and its entire group materially benefits from that government, with amendments, positions. So, it would not be logical for him to attack or threaten the government with the possibility of impeachment”, he says.
“But there is an interesting movement from the PSDB, Democrats, PSD and MDB parties, highlighting that, given Bolsonaro’s more radical and confrontational stance, impeachment can be an alternative.”
This possibility was formally signaled, after September 7, by the parties mentioned above and by Solidarity, which makes up the same bloc.
It’s not from today
Roberto Nogueira is the founder and director of RN Consultores Associados, which provides advice and consultancy to companies and offers the service of legislative and parliamentary analysis. In his opinion, measures considered ultra-liberal taken at the beginning of the government were already jeopardizing the execution of Guedes’ agenda.
“Finishing the Ministry of Labour, Social Security, Culture, Industry and Foreign Trade, centralizing these actions in a ‘super’ Ministry of Economy, granting broad powers to an openly liberal minister, at first sight might seem coherent with the discourse of simplification, reduction of the public machine and administrative rationalization”, he recalls.
“But without the ministries and their apparently equal councils, the possibilities for debates and proposals also of non-liberal interest also vanished. With no space in the Executive, it remains to seek support and spaces in Congress, starting political instabilities that make difficult not only the supposedly liberal agenda, but any agenda related to the interests of society”, ponders the consultant.
Author of two books on the tax reform, Nogueira was already a member of the National Social Security Council, of the Deliberative Council of the ABDI Brazilian Agency for Industrial Development (ABDI), among others.
Political scientist Leandro Gabiati draws attention to the problems of articulation between the Executive and the Legislature.
“The president does not get involved and does not collaborate with the economic agenda because it is not his profile. He prefers the playpen, he prefers to make the lives of him, the motorcycles. It’s his way of acting, and from this type of choice he loses strength in Congress”, he analyzes.
“We saw that Minister Paulo Guedes tried to lead, for example, discussions on tax reform. But he is already a pretty worn-out figure, who lacks the political skills to conduct this type of agenda.”
The ministerial changes, which Bolsonaro promoted at the end of July, did not solve the problem.
“The arrival of Ciro Nogueira at the Civil House, which generated great expectations about an improvement in the performance and articulation of the government, has not brought the expected results. Because, instead of focusing on relevant economic agendas, he has to put out fires created by Bolsonaro himself”, says the director of Dominium.
The most recent example was the overthrow of the labor mini-reform last week in the heart of Casa de Nogueira, the Senate, after the Chamber approved a matter considered difficult and unpopular.
The master key”
“The political instability generated at the Planalto Palace crosses the street, invades the National Congress, immobilizing it, delaying decisions, victimizing companies and citizens, delaying and even making economic agendas unfeasible”, reinforces Roberto Nogueira.
“It is the master key of all evils: it is disastrous for the country’s image, it alienates investors, disorganizes relative prices, pressures inflation, devalues the real against the dollar, causes capital flight, brings down the stock market, makes the unemployment soar.”
For him, these processes are, at the same time, “cause and effect of political instability generated by attitudes never imagined by a president of a country that was once the sixth largest economy in the world.”
The director of RN Consultores explains which reforms – of a liberal nature and, in his view, in the interest of society as a whole – have been halted by the position of the current president. Bolsonaro’s setbacks, which have now become predictable, do nothing to change this scenario.
“For twenty years Brazil, not the federal government, has needed a broad tax reform, which goes beyond taxation, focused on reducing public spending and improving the taxes to which citizens and companies are subject. How to move forward with an agenda of this nature in a politically unstable environment, without political coordination, devoid of open and in-depth debates with those who understand?”, he asks.
Impeachment and elections 2022
Leandro Gabiati, from Dominium, says that 2021 was expected to be the “year of reforms”, precisely because there were no elections.
“What we saw was the opposite: President Bolsonaro was not engaging in agendas such as administrative reform and tax reform. When the government leader doesn’t buy the fight, it’s much more difficult for Congress to advance technically complex and politically unpopular agendas”, he points out.
“If the government already had problems regarding the economic agenda, the manifestations and statements made by the president [no 7 de setembro] end up formally marking the end of the reform process and the economic agenda that the government had been proposing to Congress.”
Gabiati believes that the impeachment movement still does not have enough votes in Congress, precisely because Lira is committed to the government and to Bolsonaro himself.
However, the parties he defines as the center of government (Democrats, PSD, MDB, Citizenship, PSDB and Podemos) are starting to articulate to overthrow the president, “not only aiming at resolving the situation now, but the 2022 elections.”
“With more than a year of the elections, Congress is already contaminated by this climate of political-electoral dispute that comes from the Executive, and there is no way to be different”, he analyses.
With reforms stalled and a growing polarization between Bolsonaro and former president Lula (PT), Gabiati points out that the bloc led by MDB, Democrats and PSDB tends to adopt as a strategy “to take Bolsonaro out of the game, to try to face Lula in the elections of 2022 with support from the anti-PT electorate.”
Edition: Anelize Moreira