Fernando Alcoforado *
This article aims to show the differences of economic propositions among the candidates Jair Bolsonaro, Ciro Gomes, Fernando Haddad, Geraldo Alckmin and Marina Silva in order that the readers know their purposes and identify who will have real conditions to overcome the economic crisis deep in which the Brazilian nation is. Voters need to understand that without overcoming the serious economic problems, the remaining problems will not be solved in Brazil. Without underestimating the importance of other issues such as education, health, environment, security, etc., to guide the choice of the voter about the best candidate for the Presidency of the Republic, it is fundamental that the voter analyzes the economic proposals of the candidates to make the most choice appropriate. I hope that this article makes it possible to guide the readers’ decision about the choice of the candidate for the Presidency of the Republic who is better able to solve the gigantic economic problems of Brazil.
- Economic proposal of Jair Bolsonaro
Jair Bolsonaro does not propose any economic plan that contributes to solve the economic crisis of the Country and the unemployment that unhappy the Brazilian population. It is absurd Jair Bolsonaro to consider the Central Bank independent of the actions of the government characterizing its submission to the dictates of the financial system as is the case of the banks. It is absurd to consider that the prices practiced by Petrobras follow those of the international markets without taking into account the interests of the population. It is absurd to argue that men and women have different wages at the expense of women. It is absurd to consider that the individual labor contract prevails over the CLT (Consolidation of labor laws) to the detriment of the workers in their relationship with the bosses. It is absurd to reduce the size of the state so that the market imposes its will on the Brazilian economy to the detriment of the Brazilian people. However, the initiative to end the compulsory union tax is positive.
It is absurd for Jair Bolsonaro to maintain the flexible exchange rate, which means to give up control over the exchange rate by letting it evolve according to the interests of the market, that is, the financial system. The correct would be to adopt the fixed exchange rate whose value would be determined by the government in function of the national interests. It is a meaningless proposal, without nexus, that Jair Bolsonaro intends to reduce the tax burden by attracting “new money” to Brazil, by exploiting mineral resources, stimulating tourism and increasing public safety. It is absurd to be against the tax on large fortunes and inheritances that would be one of the alternatives of raising the tax revenue and reducing the tax burden on a large part of the population and on the companies. It is absurd for Jair Bolsonaro to seek to reduce public debt through privatizations, concessions, the sale of real estate properties of the Union, and the return of funds to official financial institutions which are insufficient when it should reduce the burden of public debt, which charges the Union’s budget by more than 50%, renegotiating with its creditors its lengthening in time. However, the initiative to simplify and unify federal taxes is positive.
Jair Bolsonaro’s initiative to cut spending is correct, but it is absurd to “privatize expeditiously” to reduce debts and reduce financial expenses when the correct thing would be to reduce the payment of public debt burdens by renegotiating with the creditors their lengthening in time for the government to dispose resources. It is an act detrimental to Brazil’s interests to privatize the state, among them Petrobras, given that if they are properly managed they can collaborate in favor of the economic and social development of Brazil. It is absurd to break Petrobras’ monopoly in the natural gas chain just as it was absurd that the oil monopoly was broken by the Fernando Henrique Cardoso government because the management of oil and natural gas should be unified. It is absurd to veto China only in the sale of state-owned enterprises.
- Economic proposal of Fernando Haddad
The initiatives proposed by the candidate are aimed at reactivating the Brazilian economy, especially those aimed at raising public investments, including the resumption of paralyzed works, investments by Petrobras and the “Minha Casa Minha Vida” program. It´s positive the initiative to increase consumption which is reinforced by the increase in investments in the “Bolsa Família” Program, the creation of lines of credit with interest and affordable terms to serve the families that are in the negative register and the implementation of the national program to support the activities of the social and solidarity economy. The initiative to create an investment fund composed of 10% of the international reserves and contributions from public banks and debentures to finance infrastructure projects and the multiplication of Public Private Partnerships (PPPs) is positive. Fernando Haddad rightly states that the state should be an inducer of growth and invest in infrastructure to generate 8 million jobs in 4 years. It´s correct the initiative of Fernando Haddad to revoke the pillars of neoliberal labor reform as a stimulus to pejotization, outsourcing and the prohibition of access to Labor Justice, to elaborate a new Labor Statute and to value trade unions and workers ‘and employers’ associations in guiding the preparation for professional qualification, as well as reorienting Petrobras’ current disastrous fuel price policy. All the initiatives adopted by Fernando Haddad are aimed at reactivating the Brazilian economy in the short term without presenting, in the meantime, a long-term Economic Plan that contributes to achieving sustained economic and social development. With the exception of the revocation of the neoliberal labor reform in force, Fernando Haddad does not present concrete proposals to break with the neoliberal model that led the Brazilian economy to the current disaster. Fernando Haddad does not present proposals that contribute to halt the process of denationalization and deindustrialization of the Brazilian economy.
Fernando Haddad’s proposals are positive in order to combat the recession, such as the repeal of the spending ceiling established by the Temer government, to raise consumption with the exemption of the payment of Income Tax for those who earn up to 5 minimum wages, conditioned to increase the tax rates for the super rich, to invest in urban mobility with the municipalization of Cide, a tax on fuels, to tax banks to combat the high levels of bank spread, to reduce the cost of credit to increase consumption and investment. It´s positive the proposed tax reform, which provides for the poorest to pay less, taxation of profits and dividends, the introduction of a progressive inheritance tax and the gradual implementation of Value Added Tax (VAT), which replaces the current tax structure indirect taxes, the introduction of progressive inheritance tax and the revitalization of public banks, especially BNDES, BB and CEF, and national development financing mechanisms. It´s positive the initiative to give the Central Bank a double mandate, which will reinforce inflation control, will also take on a commitment to employment based on a new indicator that guides the definition of the basic interest rate of the economy. The initiative to strengthen Petrobras is correct with the maintenance of the pre-salt sharing regime and the local content policy and the economic regulation of the media to avoid concentration of ownership. The serious and certainly weak point of Fernando Haddad’s proposal regarding fiscal policy lies in the fact that he does not propose any initiative to stop the rapid growth of the public debt, whose payment of its charges is more than 50% of the budget of the Union, so that the government does not have the resources for investment and doesn´t meet the most basic needs of the Brazilian population. Without the equation of the public debt, there will be no solution to the fiscal crisis of the State in Brazil.
The proposal by Fernando Haddad against the sale of Petrobras assets, the non-privatization of Petrobras and against possible sales of Eletrobras and Petrobras assets is positive because they would contribute to the strengthening of the Brazilian State and, as a consequence, would promote the economic and social development of Brazil. It´s correct the proposed revision of the agreement between Embraer and Boeing that would lead to the definitive denationalization of Embraer and would ompromise the policy of productive and technological autonomy in the Defense area of Brazil, would be damaging to the Brazilian industry that would be affected by the reduction of purchases internal parts and components that will be carried out largely in the United States by Boeing and would lose control over the management of the company as a whole that would be assumed by Boeing.
- Economic proposal of Ciro Gomes
Ciro Gomes presents a proposal capable of promoting the reactivation of the Brazilian economy by considering the State as an inducer of economic growth since the private sector alone, as advocated by neoliberalism, has not been able to achieve this goal. The economic proposal of Ciro Gomes is positive because it intends to implement the National Development Project, focused on combating deindustrialization of the country and proposes to invest at least 5% of GDP (Gross Domestic Product) in infrastructure (R $ 300 billion per year), which is one of the ways to make GDP grow rapidly, through public investment or by stimulating the private sector to do so. In order to reactivate the Brazilian economy, Ciro Gomes also proposes to create 2 million jobs in the first year of government, using resources from the FGTS (Service Assurance Fund) to stimulate labor-intensive sectors, reinforce the “Minha Casa, Minha Vida” program with additional resources and encourage current model of concessions and Public Private Partnerships, in addition to strengthening of the role of BNDES (National Bank for Economic and Social Development) in this process. In addition, Ciro Gomes proposes to “clean” the name of the Brazilians in the Credit Protection Service (SPC) register of defaulters, to stimulate consumption that is a way to promote economic growth and generate employment, as well as review labor legislation for legislation to “adapt to new labor market trends” and ensure greater protection for workers. Its proposal is to exercise control of the exchange rate, which should oscillate around a competitive level for the domestic industry, the control of interest rates with the commitment to reduce the economy basic rate and the setting of two targets for the Central Bank (rate of inflation and unemployment rate).
It´s positive the repeal of the spending ceiling established by the government Michel Temer, which has contributed decisively to further aggravate the economic recession that broke out in Brazil in 2014. Taxation on profits and dividends and on inheritances and donations to raise the government’s tax revenue that will contribute to ending the current fiscal deficit is extremely positive. The initiative to end the fiscal deficit in two years is very positive, reducing tax waivers. It´s positive the proposal by Ciro Gomes to establish a limit for the payment of domestic public debt by the State and establish a ceiling for all expenditures to enable the availability of public resources for investment, as well as his proposal to use US $ 200 billion of Brazil’s international reserves to pay 9% of the country’s domestic debt. Also positive is its proposal to make BNDES to act as a major financial agent of the industrial policy strategy, together with FINEP and the state bodies to foster innovation and make with which Banco do Brasil and Caixa Econômica Federal have an active participation in the process of reducing the stratospheric banking spread in Brazil. Its proposal to re-create the sovereign fund to prevent excessive exchange rate swings and to allow the implementation of countercyclical policies and the stability of important prices, such as oil, is also correct, and its proposal to broaden the composition of the Council National Monetary Council and to publish the transcription of the recordings of the COPOM (Monetary Policy Committee) meetings after six months, aiming for greater transparency of the actions of the Central Bank.
The proposal of Ciro Gomes is against the privatization of Eletrobras and the adoption of a policy for the oil sector that provides for the application of the pre-sharing percentages for the exploration of oil and gas in the pre-salt areas, the expropriation of all oil fields auctioned to foreign companies in the Temer government and the limitation of Petrobras’ profit by 3%, in addition to changing the way the company is managed. It´s correct his proposal to suspend the agreement between Embraer and Boeing that would lead to the definitive denationalization of Embraer and would compromise the policy of productive and technological autonomy in the area of Defense of Brazil, would harm the Brazilian industry that would be affected by the reduction of purchases internal parts and components that will be carried out largely in the United States by Boeing and would lose control over the management of the company as a whole that would be assumed by Boeing.
- Economic proposal of Geraldo Alckmin
Geraldo Alckmin promises to double the population’s income after a predetermined time, yet to be defined without informing what resources he would carry out and acts against the Constitution by promising to deconstitutionalize issues related to the country’s economic management so that economic policy has flexibility. Geraldo Alckmin proposes to make Brazil’s foreign trade represent 50% of GDP, which is a difficult proposal because Brazil’s foreign trade now represents 11% of GDP and the world average corresponds to 29.8% of GDP. The initiative to correct the FGTS by TLP (Long Term Rate) to ensure real gains above inflation, to make Brazil the “most attractive” country to undertake and invest in Latin America, strengthen rural insurance and create an anti catastrophe fund, but it is absurd to support the law project under discussion in the National Congress which makes it more flexible to grant pesticide registrations that are harmful to the environment and threaten the health of the population. Geraldo Alckmin does not present any proposal capable of promoting the reactivation of the Brazilian economy and reducing the mass unemployment existing in Brazil and does not propose a National Development Plan that would serve as a basis for the country’s long-term development. The lack of measures aimed at the reactivation of the economy in the short and long term lies in the fact that Geraldo Alckmin is a defender of neoliberalism that prioritizes the action of the private sector and not intervention of the State in the economy.
It´s positive the initiative of Geraldo Alckmin to create Value Added Tax (VAT) with a single rate charged at the destination to replace ICMS, ISSS, PIS, Cofins and IPI, to tax the distribution of dividends and to end the exemption of LCA and LCI . Geraldo Alckmin proposes to end the fiscal deficit in two years, but does not inform how to do it. It is, however, a great absurdity to Geraldo Alckmin’s intention to keep the expenditure ceiling of the government Temer that contributed decisively to deepen the recession of the Brazilian economy with the generalized breakdown of companies and the massive unemployment that reaches 13 million workers. Geraldo Alckmin does not show how he intends to resume economic activity by reducing spending and without increasing taxes. Regrettably, the candidate does not propose any measures to stop the rapid growth of the public debt, whose payment of its charges is more than 50% burdening the Union budget, so that the government does not have the resources to invest and meet the most basic needs of the Brazilian population. Without the solution of the public debt, there will be no solution to the fiscal crisis of the State in Brazil.
It is a crime against the fatherland Geraldo Alckmin to adopt as a key piece of the government program the neoliberal policy of privatization of state enterprises that would lead to the economic weakening of the State in Brazil, incapacitating it to act as an inducer of economic and social development, besides opening way to deepen the denationalization of the Brazilian economy. Despite promising not to privatize Petrobras, Geraldo Alckmin will weaken it by ending the monopoly, selling the distributor and the company’s mature fields in the post salt.
- Economic proposal of Marina Silva
The priority given by Marina Silva to infrastructure works is positive because it favors the creation of formal jobs quickly and significantly, and the prospects for growth of the economy in the medium and long term, especially sanitation and transport works. It´s correct the Marina Silva’s position is contrary to Petrobras’ price policy, which changes daily according to the price of oil in the world market. The position of Marina Silva is correct, defending changes in the labor reform, so that the negotiated one does not overlap with the legislated. The initiative of Marina Silva is positive in favor of serving the poorest regions of the country, encouraging PPPs (Public-Private Partnership) and concessions to increase investments, contracting guarantee insurance to avoid corruption in public works, increasing the capacity of Brazil export and the increase of investments in research and innovation to 2% of GDP in the next 4 years. It is questionable Marina Silva to give autonomy to the Central Bank in the definition of monetary policy because it has to be subordinated to the government’s economic policy and it is inadmissible to defend the general orientation of labor reform approved by the government Michel Temer because it is harmful to the workers. Regrettably, Marina Silva does not present a proposal to reactivate the Brazilian economy in a deep recession four years ago and does not propose a National Development Plan in which the government is an inducer of the development process. In addition, Marina Silva proposes nothing to reverse the country’s deindustrialization process. Its economic proposal is typically neoliberal in allowing prices, interest and exchange rates to be dictated by the market.
It´s positive the initiative of Marina Silva to implement the Tax on Goods and Services (IBS) joining PIS, Cofins, IPI, ICMS and ISSS because it simplifies taxation, adopts taxation on dividends, increases taxation on inheritance and revises fiscal and tax exemptions. suspend the creation of Refis because it raises public revenue and reduces taxes on medicines and does not tax the basic basket because it encourages the consumption of families. It is positive that Marina Silva is against the spending ceiling adopted by the government Michel Temer considered as an unpractical measure since it has contributed to aggravate Brazil’s economic recession. It is absurd Marina Silva to consider as fundamental pillars of monetary policy the primary surplus that is the resource reserved by the government to pay the public debt service regardless of the resource needs of areas vital to the country such as education, health and infrastructure and the floating exchange rate which causes the government to remain hostage to the financial system insofar as exchange rates vary with market fluctuations rather than Brazil’s needs. Regarding the inflation targeting regime, it should be considered alongside other targets such as unemployment, for example. In other words, monetary policy should not be restricted to strictly monetary factors. It is absurd Marina Silva to defend the operational autonomy of the Central Bank in its institutional objective of maintaining currency stability and contain inflation because it should execute a monetary policy compatible with the government’s economic policy. Marina Silva does not propose a solution to the internal public debt that is the main economic problem of Brazil contemplating the reduction of charges with the payment of internal public debt by the State renegotiating with its creditors its extension in time. Only then, the government will be able to have public resources for investment.
Marina Silva’s proposal of not to privatize Petrobras, Caixa Econômica Federal and Banco do Brasil is positive because they strengthen the Brazilian state’s ability to act as inductors of development and is positive proposing an energy policy that incorporates renewable energy. It is absurd Marina Silva to defend privatization of Eletrobras and its distributors because it would weaken the State’s role in Brazil to promote its development. Unfortunately, Marina Silva does not present any proposal that would lead to the suspension of the agreement between Embraer and Boeing that would lead to the definitive denationalization of Embraer and would call into question the policy of productive and technological autonomy in the area of Defense of Brazil, damaging the Brazilian industry that would be affected with the reduction of domestic purchases of parts and components that will be carried out largely in the United States by Boeing and would lose control in the management of the company as a whole that would be assumed by Boeing.
- Conclusions
Therefore, it can be concluded that the economic proposals of candidates Jair Bolsonaro, Geraldo Alckmin and Marina Silva are typically neoliberal, that is, that implies the adoption of an economic model in which the State does not intervene in the economy, leaving it almost entirely to the market forces, in addition to not pointing to the overcoming of the current deep economic recession of Brazil nor much less to the restructuring of the Brazilian economy aiming at the country’s economic and social progress in the medium and long term. The proposal of the candidate Fernando Haddad points towards the reactivation of the Brazilian economy in the short term, but does not indicate the ways of the restructuring of the Brazilian economy aiming at the country’s economic and social progress in the medium and long term. The most complete economic proposal, however, is that of Ciro Gomes, who indicates his position against the neoliberalism responsible for Brazil’s current economic disaster and points out how to reactivate the Brazilian economy in the short term and how to restructure it with a view to the country’s economic and social progress medium and long term.
Jair Bolsonaro does not propose any economic plan that contributes to solve the economic crisis of the Country and the unemployment that unhappy the Brazilian population. His proposal is typically neoliberal, economic model responsible for the economic disaster that affects Brazil at the moment. It is absurd for Jair Bolsonaro to seek to reduce the public debt through privatizations, concessions, sale of real estate properties of the Union and devolution of funds in official financial institutions because they are insufficient. It is an act of lesa homeland of Jair Bolsonaro to sell public assets and privatize state-owned companies, among them Petrobras, given that if they are duly managed they can collaborate in favor of the economic and social development of Brazil.
Geraldo Alckmin does not present any proposal capable of promoting the reactivation of the Brazilian economy and reducing the mass unemployment existing in Brazil and does not propose a National Development Plan that would serve as a basis for the country’s long-term development. The lack of measures aimed at the reactivation of the economy in the short and long term lies in the fact that Geraldo Alckmin is a defender of neoliberalism that prioritizes the action of the private sector and the non-intervention of the State in the economy. Geraldo Alckmin does not propose any measure to stop the rapid growth of the public debt, whose payment of its costs is more than 50% burdening the Union budget, so that the government does not have the resources to invest and to meet the most basic needs of the Brazilian population. It is a crime against the fatherland of Geraldo Alckmin to adopt as a key piece of the government program the neoliberal policy of privatization of state enterprises that would lead to the economic weakening of the State in Brazil, incapacitating it to act as an inducer of economic and social development, besides opening way to deepen the denationalization of the Brazilian economy.
Marina Silva’s economic proposal is typically neoliberal in allowing prices, interest and exchange rates to be dictated by the market. The priority given by Marina Silva to infrastructure works is positive because it favors the creation of formal jobs quickly and significantly, and the prospects for growth of the economy in the medium and long term, especially sanitation and transport works. Marina Silva does not present a proposal to reactivate the Brazilian economy in a deep recession four years ago and does not propose a National Development Plan in which the government is an inducer of the development process. Marina Silva does not propose a solution to the internal public debt that is the main economic problem of Brazil contemplating the reduction of charges with the payment of internal public debt by the State renegotiating with its creditors its extension in time. It´s positive the Marina Silva’s proposal not to privatize Petrobras, Caixa Econômica Federal and Banco do Brasil because they strengthen the Brazilian state’s ability to act as inductors of development and adopt an energy policy that incorporates renewable energy. It is, however, absurd Marina Silva to admit to privatize Eletrobras and its distributors because it would weaken the Brazilian state’s role in promoting its development and not present any proposal that would lead to the suspension of the agreement between Embraer and Boeing that would lead to the definitive denationalization of Embraer.
Fernando Haddad rightly states that the state should be an inducer of growth and should invest in infrastructure to generate 8 million jobs in 4 years. The initiatives proposed by the candidate Fernando Haddad are aimed at reactivating the Brazilian economy, especially those aimed at raising public investments, including the resumption of paralyzed works, Petrobras’ investments and the “Minha Casa Minha Vida” program. The serious and certainly weak point of Fernando Haddad’s proposal lies in the fact that it does not propose a long-term economic plan aiming to restructure the Brazilian economy and not propose any initiative to stop the rapid growth of the public debt whose payment of its costs the federal budget is more than 50%, causing the government to not have resources for investment and do not meet the most basic needs of the Brazilian population. Fernando Haddad’s proposal against the sale of state-owned enterprises is positive because they would contribute to the strengthening of the Brazilian state and, as a consequence, would promote the economic and social development of Brazil.
Ciro Gomes presents an economic proposal capable of promoting the reactivation of the Brazilian economy by considering the State as an inducer of economic growth since the private sector alone, as advocated by neoliberalism, has not been able to achieve this goal. The economic proposal of Ciro Gomes is positive because it intends to implement the National Development Plan, focused on combating deindustrialization of the country and proposes to invest at least 5% of GDP in infrastructure through public investment or encouraging the private sector to do so. The proposal by Ciro Gomes to establish a limit for the payment of domestic public debt by the State and establish a ceiling for all expenditures to enable the availability of public resources for investment is positive. The proposal of Ciro Gomes is against the privatization of state companies because if they are managed properly can contribute to the economic and social development of Brazil.
* Fernando Alcoforado, 78, holder of the CONFEA / CREA System Medal of Merit, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional Development by the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning and planning of energy systems, is the author of 13 books addressing issues such as Globalization and Development, Brazilian Economy, Global Warming and Climate Change, The Factors that Condition Economic and Social Development, Energy in the world and The Great Scientific, Economic, and Social Revolutions that Changed the World.
Site Title 