An Economic Solution is Not the Best Way Forward for Brazil

At the end of May, Latin America became the new epicenter of the coronavirus with Chile, Mexico and Peru facing severe difficulties. Additionally, Brazil is now the second most affected country, only the United States has a higher number of cases and deaths. In response to the severity of the crisis, the Brazilian Government is emphasizing that recovery efforts should focus on building back-up the Brazillian economy to pre-corona levels. However, this is not the best way forward in the long term. Instead, the government should craft a coherent political response to the crisis. Brazil needs a leadership which is able to coordinate a solution for the country, that brings stability to the political system, and also safeguards the health and social systems of the nation.

Understanding the Brazilian Crisis

The main element of the Brazilian crisis is political. The country is facing a lot of political instability due to the former president, Dilma Rousseff’s, impeachment (2015-2016), the corruption scandals in the administration of her successor, Michel Temer (who took office during 2016-2018), and the car wash operation (going on since 2014). The Car Wash operation is considered to be the biggest corruption investigation ever carried out in Brazil, with a considerable number of the political elites being investigated as well as sentenced to prison. Consequently, the traditional political class was widely discredited by the public, resulting in the largest political overhaul ever seen in Brazil during the last national election.

To aggravate the situation, the economy has recently went through the worst recession in Brazil’s modern history. The government budget balance has been in the negative (deficit) since 2014 (figure 1), the unemployment rate has increased over 10% (figure 2) and the country’s Gross Domestic Product (GDP) (figure 3) has grown by less than 2%.

Figure 1 – Public Sector Primary Result

Figure 2 – Unemployment rate

Figure 3 – Economic growth

Essentially, Brazil’s struggle with its economic problems has been aggravated by its political crisis. Corruption scandals and ideological debates have dominated the public agenda, with economic recovery plans being overlooked and ignored. The decision-making process became paralyzed leading to discontentment in politics growing. In this context, Bolsonaro, the anti-establishment candidate with an anti-institutional and anti-political approach, won the 2018 presidential election. When considering the high level of anti-establishment sentiments, Bolsonaro’s victory was not a surprise since Brazilian voters clearly wanted a radical change.

The economic issues will only be solved when the Government endeavors to deal with the crisis politically. While it is not new for the Brazilian government to struggle with economic and political problems, it is the first time in decades that an epidemiological event of this magnitude is compounding the crisis. As a matter of fact, if someone looks further into the region, Argentina, Paraguay and Uruguay are clear examples of cases where f successful strategies to fight the coronavirus politically have been implemented, which demonstrate the importance of a political solution. In Argentina, the opposition is working closer with the government. Paraguay’s response, consisting of lock-down measures combined with testing and contact-tracing, resulted in fewer casualties. Finally, in Uruguay, the citizen’s trust in political institutions have been highlighted as a key factor in controlling the epidemic.                                                                                

A Political Response to the Crisis

As the spread of the coronavirus in the countryside continues to increase, Bolsonaro’s strategy remains focused on maintaining the support of his supporters. Aiming for reelection, the right-wing populist has been arguing that the coronavirus is a fantasy created by the media, in his words “a little flue”, which will have high costs for economic recovery efforts. Rather than basing his strategy in an evidence-based approach, Bolsonaro went in the opposite direction: Based in a kind of common sense irrationalism that has appeal among his supporters, he frequently disrespects health protocols. The president also fired a well-regarded health minister, Luiz Henrique Mandetta, launched the Brazil cannot stop campaign (a propaganda campaign against confinement measures that was banned by the federal judiciary) and he is betting on a “deus ex machina” solution, Hydroxychloroquine, which has been proven to have no effect when treating  COVID19.

Instead, a coordinated plan for the country to cooperatively deal with subnational governments, international organizations and other countries would be more beneficial. However, in lieu of this, Bolsonaro has been blaming governors and mayors for the economic losses that have resulted from quarantine and lock-down measures. Indeed, since Bolsonaro took office his lack of leadership has caused a de-facto parliamentarism. In general, the Government refuses to defend its ideas in the legislative arena, which has given to the parliament the lead on the discussion of important policies being implemented in the country.

The economic recovery plan could also be improved with the implementation of a political strategy. In a country with high rates of informality as well as small and medium business, it is not sufficient to focus only on the formal economy. In this sense, the solutions launched by the government are not completely reaching low-income people or micro and small companies.

Finally, Bolsonaro is facing a lot of political problems. Not only are he and his political clan under investigations, but also the idea of impeachment is starting to rise as his public support gradually decreases. Since the coronavirus crisis began, Bolsonaro has lost support with both the parliament and with his voters.


Overall, it is clear that this government does not have a contingency plan, nor are they prepared to deal with the crisis. Given the present situation, good leadership could have caused fewer deaths, provided more stability, security to employers, employees and investors. Overall, long term prospects for the country could also have been improved as a result. In conclusion, without a political response, Brazil will continue to face an uncertain future.

The views, thoughts, and opinions expressed in this article belong solely to the author, and do not reflect the views of Conversationally Speaking Magazine.

Lincoln Telhado
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Lincoln Telhado is a government relations specialist based in Brasilia, Brazil. He received a master’s degree in Political Science from the University of Brasilia. His research interests include accountability and democratic institutions, and policy diffusion in Latin America, with a special focus on Brazil.

Categories: Politics

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