By Emir Sader on August 20, 2020
Giving the position of Minister of the Economy e to Paulo Guedes was Bolsonaro’s way of promoting the centrality of the market, a fundamental assumption of neoliberalism. The appointment of Guedes, an ultra neoliberal, was the way to guarantee his continued support of big business and the media.
But Bolsonaro knows that why he really won the election was with fake news operations and his gruesome style and not with his government proposals. This was the difference between him and Geraldo Alckmin for example who had no chance of competing with the Workers Party (PT), even with fake news operations.
The neoliberal model focuses on fiscal adjustment and does not incorporate social policies, or any other form of income distribution. The process of privatization is part of the adjustment.
After three electoral victories – one with Fernando Collor, two with Fernando Henrique Cardoso (FHC) neoliberalism was defeated four times in a row, when the Brazilian Social Democracy Party candidates simply proposed the resumption of the FHC model of government.
The Workers Party (PT) was expelled from the government by the 2016 coup, not by a democratic electoral dispute, as had been the case in 2002, 2006, 2010 and 2014. The right-wing succeeded in shifting social issues, whose centrality had allowed the PT to win, to its issues: corruption, security, anti-politics and anti-statehood, with the rejection of the PT permeating everything.
While the government was losing support, Bolsonaro stopped some initiatives that he considered anti-popular, such as the administrative reform and the end of the 600 real stimulus aid to those in the most need, among other methods. With Moro’s departure and the agreement with the Centrao, new conflicts with economic policy were introduced, since the positions assigned to the Centrao were beyond the control of the Ministry of Economy, in addition to the fact that the alliance in Parliament always meant difficulties in the measures to cut resources, due to the need to comply with the bases of Centrao, which is a set of political parties that do not have a specific ideological orientation and aims to ensure proximity to the executive power so that it guarantees them advantages and allows them to distribute privileges through customer networks. Despite its name, the Centrão is not necessarily a centrist political-ideological spectrum group, but a group of acronyms with a conservative orientation.
The pandemic crisis has aggravated the problem because credits to minimize recession and emergency aid affect fiscal adjustment policy. Bolsonaro was enthusiastic about the support he won with the 600 reais and realized that, if he followed Paulo Guedes’ line, he would not be able to continue with this aid.
When Bolsonaro begins to focus his attention on the possibility of reelection, and Moro’s departure accelerates attention on the presidential dispute, he realizes how Paulo Guedes’ ultra-neoliberal policy is now becoming an obstacle to the government’s popularity.
The crisis of Guedes’ team, with complaints about the difficulties of continuing to cut resources, deepens the internal contradictions of the government. Does this mean that the Paulo Guedes’ phase is over? Not necessarily. Bolsonaro reaffirmed the spending ceiling and privatizations. Will he respect the ceiling? We’ll see. Will Paulo Guedes resign? It’s not clear.
It is possible that these contradictions will continue over time, with Bolsonaro increasingly restricting the powers of Paulo Guedes, because of the awareness of the anti-popular – and therefore limiting – character of the neoliberal model, even more so in its ultra version of Guedes, it clashes with the popular support bases that feed so much of Bolsonaro’s reelection project.
The neoliberal model is, in essence, anti-popular and therefore tends to be defeated electorally. Even when it is victorious, as in the Macri elections in Argentina, it is ephemeral. This is a dilemma for the Bolsonaro government, which, in its adventurous positions, may even attack this model, with the risk of losing the support of big business and the economic media. A dilemma that, in the face of the possibility that Bolsonaro will reach the end of his mandate, it will accompany him there.
Source: America Latina en Movimiento, translation, Resumen Latinoamericano, North America bureau