Raised the possibility of a flat tax of 20% exonerating the poorest (as it is already the case today), but by removing all tax loopholes – in Brazil, the dividends are not taxed.
On the other hand, there remains one point of similarity between Trump and Bolsonaro: the external policy and the support of the evangelical population. On several occasions, the elected president has declared his skepticism towards the UN and a greater rapprochement with Israel and the United States, as well as a move away from Venezuela, China and Iran. Bolsonaro’s wife, Michelle Bolsonaro, is evangelical and active in the political wing of the evangelical movement that has already hosted Bolsonaro in at least three of the seven parties that the president-elect has been part of during his 28-year political career, despite the fact that he is Catholic.
Unsustainable growth under Lula
It would be more instructive then to consider the reasons for the strong rejection of Haddad, Lula and Dilma Rousseff’s Workers Party (PT). One of these reasons is disillusionment with the country’s current economic situation.
Growth during the Lula period (2003-2010) was the highest of the democratic period in Brazil after 1985, with an average annual growth of 4.1% compared to 2.4% annual under its predecessor, Fernando Henrique Cardoso ( 1995-2002), according to the World Bank. This growth was accompanied by an inflection of unemployment, which tended to reach 10% during the Cardoso government and which dropped considerably to 7% at the end of the Lula period. It is also under Lula that foreign direct investment is growing at an average annual rate of 42.2% and external debt service is halved, from 35% of total debt to 15% , according to the World Bank.
Nevertheless, the growth of the Lula period is anything but solid. Admittedly, the public deficit had decreased, but it had never disappeared during the Lula years. The Brazilian debt was accumulating and today reaches almost 75% of GDP according to the Central Bank of Brazil. In addition, Brazilian growth was largely dependent on the commodity boom that took place between 2000 and 2014. This growth evaporated at the bursting of the bubble of these products. Indeed, the Brazilian economy slips brutally during the years Dilma Rousseff (2011-2016), the protected Lula, with an average annual growth of only 0.4%. Unemployment explodes to 11.6% in 2016 according to OECD data. Foreign investors liquidate their investments and leave the country en masse. The public deficit reaches 7.8% of Brazil’s GDP.
If we can establish the link between the economic disaster of Dilma Rousseff and Lula, it is because neither government has started any major structural reform. According to the Doing Business measures of the World Bank, Brazil is one of the worst performers in the categories “business creation” (176 out of 190 countries), “building permit” (170 out of 190), “registration of property” ( 131 of 190) and “tax compliance” (184 out of 190), being rather average in the other categories. Admittedly, this bureaucratic and fiscal burden has been inherited from the military governments and marginally reformed under the predecessors of the PT governments, but they have done little to change the situation. It was obvious that once the commodity boom was out of steam, the Brazilian economy could not maintain the same pace of growth. Many Brazilians wonder: if growth was solid, why did it skid so much?
Corruption is certainly not a feature of the PT. Corruption patterns involving senior executive officials, parliamentarians, senior executives of state-owned enterprises and heads of large private companies are not new. They were all inherited and can be traced at least until the period of the military dictatorship in Brazil (1964-1985), responsible for the major state of the economy, as well as its bureaucratization. So why is corruption most often associated with PT? Firstly because among young voters, PT governments are their only administrative credentials. They grew up under the PT, so it is normal for them to associate corruption with this party.
Voters over the age of 35 were shocked by the evolution of the PT from a morally intact party to a nest of the corrupt. The previous governments of Jose Sarney (1985-1988), Fernando Collor (1989-1992), Itamar Franco (1992-1994) and Fernando Henrique Cardoso were generally conformed by individuals who were already rich before they came to power. They have all suffered from corruption scandals, but the public has never felt that the presidents and their teams have been greatly enriched by corruption. On the other hand, the PT was mostly conformed by former workers, teachers and middle managers. The illicit enrichment is therefore much more obvious than in the predecessors of the PT. This gave the public the impression of a level of corruption never seen before.
The Venezuelan question
If Europe is aware of the economic and humanitarian crisis in Venezuela that recently, Latin America has witnessed this tragedy directly since the rise of Hugo Chávez to power in 1998. The socialization of the economy, the political persecution and hyperinflation had already caused the emigration of more than one million Venezuelans at the end of the Chávez period. Since the rise of Nicolás Maduro in 2013, this figure has risen to more than 3 million. Initially, it was mostly the middle and upper classes. The Latin American neighbors were rather happy to welcome this immigration rich in financial and human capital. Today emigrants mainly concern the poorest classes, less educated and thus the most exposed to unemployment and violence in the host countries. However, the PT during its 13 years in power was one of the greatest supporters of the Chavist regime. Indeed, the PT is ideologically close to this regime, because it is a party of Marxist inspiration and not really social-democratic, hence its declared proximity to far-left parties in Brazil. The denial of the Venezuelan situation in the PT and its allies on the far left has therefore helped to worry the Brazilian electorate, which is already experiencing an economic recession and an upsurge of urban violence.
The election of Bolsonaro, far from being a trump, is rather the result of a lack of viable alternatives in Brazil. Admittedly, other candidates, moderate right or left, sometimes even innovative, were indeed available. Nevertheless, they were little known or their campaigns lacked national significance. In addition, Brazil has been in recession since 2014 and urban violence is becoming unsustainable. Most Brazilians understand that a sustainable solution to poverty includes employment, education and health, but for them they are long-term solutions. They want immediate action. Bolsonaro understood this since 2014 when he had surrounded the largely empty space on the right. The question now is whether he will do government alone or largely under the influence of his moderate advisers.