By Artur Piva
One of the great specialties of former president Lula da Silva, who is preparing to return to the presidency of Brazil on January 1, is the administration of the “cursed legacy”.
That’s how he solves all the problems in his government – everyone who came before is to blame for everything, even if it’s not their fault.
On the contrary: he gets the house in order, but a minute later, he is already complaining that a disaster has been thrown at him and that it has nothing to do with anything bad that can happen to him until the last day of the mandate.
So it was with Fernando Cardoso.
Lula da Silva took over a Brazil without the worst problem in its economic history – inflation, eliminated by his predecessor with the Real Plan.
Also on hand was the privatization of telecommunications, without which the country would have gone, the mining and steel industries, as well as the state-owned banks, which functioned as the governors’ private mints—perhaps the only ones in the world. that made a loss.
Lula da Silva succeeded.
He implemented this tale and instead of exposing the lie, Fernando Cardoso ended up thinking that he, Lula, was now the man to save Brazil.
History can now repeat itself – with the difference that Jair Bolsonaro is unlikely to ever kiss and kiss that Fernando Henrique did.
The new president is already accusing the current government of the worst economic crimes of the last 500 years and everything else – and the reality is just the opposite.
Bolsonaro will leave Lula da Silva with the best situation the country has ever had in transitioning from one government to another in any recent era.
This is what the facts and figures show, as can be seen from the 12 main indicators of the state of the Brazilian economy at the moment.
1. INFLATION
Dilma Rousseff, Lula da Silva’s successor in the Presidency of the Republic, was removed from government, leaving a legacy of inflation that was a truly damning legacy.
In August 2016, when the impeachment ended, the Consumer Price Index – which measures the cost of living – for 12 months was close to 9%.
In the United States, it was just over 1% for the same period.
In September of this year, the two countries exchanged positions. Since then, Brazilian inflation has been lower than US inflation.
In October, for example, the price change was 6.5% in Brazil and closed at 8% in the US.
2. GROWTH
The economy is also more agile compared to the end of the last PT (progressive-globalist) administration.
According to the International Monetary Fund (IMF), Brazil’s Gross Domestic Product (GDP) shrank by around 4% in 2016. At the same time, the world grew by around 3%, and China recorded an expansion of 7%.
For 2022, the IMF estimates almost 3% growth in Brazil’s GDP. The projection for the performance of the global economy and Chinese GDP this year is practically at the same value as in 2016.
The recovery of national production has also been created in an environment of international uncertainty.
In addition to the special Russian military operation in Ukraine, which began in February, the government of President Jair Bolsonaro had to face an unprecedented challenge:
- coronavirus pandemic,
- a global health crisis that restricted trade between countries,
- broke up companies and disrupted global production chains.
3. UNEMPLOYMENT
Currently, the unemployment rate in the country is around 8%. This number was only lower in mid-2015, according to surveys conducted by the Brazilian Institute of Geography and Statistics (IBGE).
During the pandemic, the vacancy rate calculated by IBGE reached a record high of almost 15% in two moments: July-September 2020 and January-March 2021.
The massive job losses occurred in the wake of restrictive measures enacted during the health crisis.
Contrary to the president’s position, the restrictions imposed by governors and mayors followed the maxim: “We will see the economy later.”
4. TRADE BALANCE
In 2016, the current value of the Brazilian trade balance – the sum of exports and imports – closed at 20% of the country’s GDP. In 2021, the percentage increased to 30%. These data show an increase in the openness of Brazil’s economy.
5. PRIMARY SUFFICIENCY
Moreover, the primary surplus – consisting of the amount earned from exports minus the expenditure on imports – became 50% larger. The amount jumped from $40 billion in 2016 to $60 billion in 2021.
6. COLLECTION OF FEDERAL TAXES
Federal tax collection is almost 30% higher than when Dilma left office. In the accumulated 12 months recorded in August 2016, the value was just under R$1.5 trillion ($283 billion), according to data from the National Treasury.
In September 2022, the amount was close to R$ 2 trillion.
7. PUBLIC EXPENDITURE
As of June 2022, the federal government has a primary surplus in public accounts accumulated over 12 months; that is, expenses have become smaller than expenses.
The positive balance for the same interval had not occurred since November 2014 (when the global economy was still very favorable).
In the most recent data, value added virtually closed at $85 billion in September.
8. PROFITS OF STATE COMPANIES
State companies have become profitable. Last year, the net result of these companies closed close to $190 billion, 40 times less than $5 billion in 2016 – and about $230 billion more than the loss of $32 billion recorded in 2015.
9. INTERNATIONAL RESERVES
The country has about $330 billion in international reserves to cushion the effects of currency volatility. The figure appears in the current Central Bank report and represents the amount in September of this year.
10. AGRIBUSINESS
In early 2022, Brazilian agribusiness production chains were threatened with the possibility of a fertilizer supply crisis.
The concerns arose because of the sanctions imposed on Russia due to its invasion of Ukraine.
Russians are the world’s leading suppliers of this vital contribution to agriculture.
Through diplomacy, the federal government managed to guarantee the supply of fertilizer.
As a result, Brazilian agribusiness will harvest a record 270 million tons of grain in 2022 – a mark that should be surpassed in 2023, with 310 million tons estimated for the upcoming harvest.
In this context, meat production – adding cattle, pork and chicken – continues to grow. Estimated increases for 2022 and 2023 are 1% and 3%, respectively.
The annual availability of meat per inhabitant should increase to about 3% next year.
Thus, the supply to Brazil, deducting the exported volume, will be over 95 kilos.
11. Partnerships with the private sector
The government also leaves as a legacy an investment partnership program with the private sector that guarantees the injection of R$ 1 trillion between investments and grants.
The extensive list includes around 150 projects, distributed between the states of São Paulo, Rio de Janeiro, Mato Grosso do Sul and Pará, and the leasing of airport terminals in Paraná and Pernambuco.
Taking into account the proposals under study, the program portfolio contains 224 projects. One of them, still under analysis, is the privatization of the Port of Santos.
When Bolsonaro assumed the presidency, the port of Santos, the largest in Latin America, was recording repeated losses.
The balance of operations for 2018 was negative with about R$ 500 million.
Now, the facility generates dividends. For example, the accumulated net profit from January to October is already positive at $430 billion.
12. CONTINUED AND COMPLETED WORKS
The current government has also given continuity to the delayed projects started in the previous administrations. An emblematic case is the transposition of the São Francisco River, which is paralyzed in some parts.
After 15 years of embarrassment and four presidents of the Republic, the transposition aimed at guaranteeing water in the Northeast Sertão was completed.
Another example is the North-South Railway. Construction work began in 1985, during the Sarney government.
The construction of the original road, which spans 1.5 thousand kilometers between Porto Nacional (Tocantins state) and Estrela D’Oeste (São Paulo state), should be completed by the end of 2022.
Its structure was planned to be the backbone of rail transport in Brazil.
The Abunã Bridge over the Madeira River in Rondonia is also included in the list. Inaugurated in May 2021, it took seven years to build.
In the public works panel of the Ministry of Economy, about 130,000 projects started in previous governments and completed during Bolsonaro’s term are cited.
Projects of all sizes are listed: construction and renovation of day care centers, hospitals, schools, shopping centers and other public buildings, as well as structures such as bridges, roads and railways.
This is the legacy of a more economically open country, with balanced public accounts and in line with world growth, but dependent on the austerity measures adopted by the Bolsonaro government to preserve itself.
After being elected, Lula da Silva questioned, for example, the need to maintain surpluses, cut spending, guarantee fiscal stability and respect the spending limit.
Lula da Silva’s speeches give the impression that his administration will follow the opposite path to Petrobras’ well-known precipice.
With information from Oeste Magazine
