Two big things are happening in the world’s ninth-largest economy — one economic and the other political. Notwithstanding the populist noise, polarizing rhetoric and a raft of gaffes and mistakes, the right-wing Brazilian government of President Jair Bolsonaro, less than a year old, and Brazil’s Congress are putting the country’s politically difficult pension reform within arm’s reach. The proposed overhaul is just what the doctor ordered for Brazil’s ailing economy. If it happens, it’s a huge success, no question.
Now, Bolsonaro will need to soon decide what type of president he wants to be. He can’t seem to decide between being a responsible policymaker who listens to advisers or a Donald-Trump-on-steroids polarizer, who is constantly launching culture battles.
The much-needed pension shakeup arrives in the nick of time. The firebrand president’s first six months were marred by cabinet infighting, corruption scandals and congressional gridlock. Some dreamy political soothsayers had even predicted Bolsonaro’s imminent impeachment or resignation.
Thanks mostly to Rodrigo Maia, Brazil’s agile speaker of Congress, Brazil now has a pension reform that allows Bolsonaro to come up for oxygen. A preliminary package passed the first vote in the nation’s lower house and now is headed to a likely Senate win.
Normally, rolling back welfare programs — especially in emerging economies — could sink a president’s popularity. But Bolsonaro’s Brazil is anything but normal. As in the United States, the Brazilian president has created a highly charged environment. His supporters now associate progressive agendas with corruption, bloat and stagnation. The administration has successfully positioned pension reform as progress — and a blow to the left.
Patricia Campos Mello, an award-winning journalist and senior columnist at Folha de São Paulo, Brazil’s leading daily, recently said on Altamar’s podcast: “The opposition parties are still lost after the big defeat they had last year. . . . Attempts to form a left or center-left coalition have failed.”
Pension reform is important news for Latin America’s largest economy, which has been in the doldrums for nearly a decade. The pension reform liberates huge swaths of money — easing the deficit, facilitating debt service payments and attracting domestic and foreign investment capital. The plan, which raises retirement ages and increases contributions, could save 900 billion Reais ($266 billion) over the next decade.
Soon, Bolsonaro could have a big campaign promise win under his belt. But the question is whether he can keep it together long enough to reap the rewards. Bolsonaro is still highly erratic and difficult to manage. There’s no end to the gossip-rag fodder stemming from his government. Brasilia is now in a twist over Bolsonaro’s hints that he may seek to nominate his son, Eduardo, as ambassador to the United States.
The true risks for Bolsonaro’s government lurk beyond the daily news cycles. Indeed, his administration’s deep internal divisions are the most worrisome. Every day, ministers contradict each other, deny the direction set by another minister and appeal to the president to take a side.
At first, Bolsonaro’s celebration of dictatorship and a cabinet stocked with military leaders created widespread worry about the armed forces’ outsized influence. Surprisingly, in the administration’s first 100 days, the military ministers acted largely as the adults in the room. Retired Army General and Vice President Hamilton Mourão was a calming voice and moderating influence in both domestic and foreign policy.
The second 100 days have been markedly different. Indeed, the right-wing populist campaigner is back with a vengeance. Much happier with conflict, he seems uncomfortable and bored with all the mature policy debates. He regularly sides with hyper-Christian ideologues and seems to be relegating the pragmatists, such as Vice President Mourão and the government’s Wall Street economic guru Paulo Guedes, to the sidelines. His base spends lots of airtime beating up on Speaker Maia, pension reform’s political shepherd. Tension is everywhere in Brasilia.
Pressure from evangelicals — now 30 percent of Brazil’s electorate — on the government to follow through with an extremist social agenda will mount. Evangelicals increasingly scrutinize what the administration says and does about gender, sexuality and the rights of churches. Previously, Bolsonaro benefited from casting the rival Workers’ Party (PT) as a threat to the Christian Right. But without the benefit of a communist and LGBTQ-friendly bogeyman, evangelical voters may view the current government more critically.
With the stage set for Brazil’s biggest reforms in recent history, the tide is now Bolsonaro’s to lose. He may choose culture wars, but after a decade of stagnation, economic issues inevitably will come back to take political center stage. The curtains on Bolsonaro’s presidency have reopened. But for the administration to hit its stride, it will need to resolve the internal schisms of its base.
Peter Schechter is the host and executive producer of Altamar, a global-issues podcast, and former founding director of the Atlantic Council’s Latin America Center.