The End Is Near for Brazil’s Bureaucratic Utopia

Updated on
  • Temer moves to scale back notoriously bloated civil service
  • Nanny subsidies, massage therapists and the Turkey Bonus

After six decades, Brasilia is losing some of its charm. Sure, yachts still ply Lake Paranoa, and the famous modernist buildings gracing Three Powers Square and the Esplanade of Ministries are as magnificent as ever. But the train to happiness? It’s coming to an end.

Brazilians dreamed up that catchphrase to describe public-sector positions that come with near-infallible job security and perks that would impress even some in Silicon Valley. President Michel Temer is unwinding it all as he moves to scale down a notoriously bloated bureaucracy. Dozens of state assets are being auctioned off in a new privatization program. Even the National Mint is up for grabs, which can’t be good news for the 2,700 employees. It’s unlikely the buyer will continue to provide them with no-cost access to dentists, doctors, nutritionists and on-site massage therapists.

The National Congress building, one of the works of architect Oscar Niemeyer, stands in Brasilia.

Photographer: Pedro Ladeira/AFP via Getty Images

Temer’s plans have been met with dismay from government workers, along with aspirants who’ve been getting ready for the civil-service exam at hundreds of schools in a test-prep industry that, until recently, was booming. After Temer put a freeze on public-sector jobs last year, the student body at Rede Educacional Alub plummeted to 1,000 from 1,900. “Everybody’s worried,” said Franklin Andrejanini, the school’s coordinator.

Franklin Andrejanini

Photographer: Gustavo Gomes/Bloomberg

For those still taking classes, what Temer is doing is a betrayal. “We chose this path for a job we like, for the quality of life,” said Juliana Perisse, 23, who started studying a year ago. “The reforms are eliminating our retirement and our rights.”

Many in the public sector talk about rights when contending Temer shouldn’t mess with the status quo. They’re worried not only about losing job security but job dividends, such as those offered by the airport-management company Infraero. Among them: two health-insurance plans; subsidies for gasoline, groceries and nannies; and lunch vouchers even during vacations. At Brazil Communications Co., which manages government radio and television stations, there are extra food chits passed out for the holidays. One arrives in July for the Saint John festivities and another in December, known as the Turkey Bonus.

The train to happiness started rolling when Brasilia was created, bulldozed out of an arid plateau and pretty much in the middle of nowhere, though with the visually-striking premium of celebrated Brazilian architect Oscar Niemeyer designing many of its grand, flowing structures. Something had to be done to attract talent to the savanna from the beaches of Rio de Janeiro and the bright lights of Sao Paulo. The lure: outsized paychecks and goodies beyond those offered by private employers or even many ministries in other locations, like chauffeurs and free flights.

Now roughly 250,000 people, or 40 percent of the workforce in Brasilia, hold government jobs -- not counting those employed by the judiciary, National Congress and the military. They’re all in privileged classes, many belonging to clubs, one for nearly each profession and often subsidized, with swimming pools and tennis courts.

Brazilians living far from the capital view it as a city of spoiled loafers, while the national unemployment rate stands at 13 percent. Even some locals are fed up, despite the fact their livelihoods may well be threatened by a shrunken civil service.

Students take a civil-service exam prep class in Brasilia, on Sept. 13.

Photographer: Gustavo Gomes/Bloomberg

Mauricio Vale Borges, a 48-year-old optician, said the giant “paternalistic state” was a mistake from the start and is ridiculous now. “It’s out of touch with the country’s reality.”

He also runs an eyewear shop in Brasilia, where he has watched the civil servants enjoy benefits he can only dream of. “I’m not jealous of them,” he said. “I’m embarrassed by them.”

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The capital has the highest per-capita income in the country. The typical government employee anywhere in Brazil earns 59 percent more than the average private-sector worker, who gets by on 2,025 reais a month, or about $648. That, though, seems destined to change, at least bit by bit. The government has postponed annual raises for the second year in a row.

Entities from the postal service to state banks are being downsized on the order of the president, who has fired 4,300 political appointees. The 57 state-owned enterprises and properties on the auction block include oilfields, airport concessions, ports and the government’s 63 percent stake in Eletrobras, Latin America’s largest power company. Facing a crippling deficit of around 9 percent of gross domestic product, the administration sees few options beyond getting out the ax.

While most Brazilians aren’t fond of a swollen bureaucracy providing lackluster services in a country coming out of the worst recession on record, Temer’s downsizing efforts aren’t doing anything to boost his rock-bottom ratings in opinion polls. No wonder, considering he’s also pushing to raise social security taxes and slash pension benefits, which would affect tens of millions across the country.

There’s also disbelief anything will really change. Jose Gomes, a 61-year-old janitor in Sao Paulo, said he has seen Brasilia act to reform before. “It didn’t do anything to help me -- and they are the ones who are richer now.”

The president, who rose to power after the impeachment last year of Dilma Rousseff, vowed to accelerate his so-called austerity measures after winning a vote in the lower house in August to block corruption charges the federal prosecutor leveled against him. And he gets credit in some quarters for going after the bureaucracy. Operation Carwash and other long-running criminal probes into kickbacks from government enterprises have strengthened the argument that privatization will help combat corruption.

A pedestrian passes in front of a post office building in Brasilia.

Photographer: Gustavo Gomes/Bloomberg

“We have 151 state companies employing more than half a million people with budgets of 1.2 trillion reais,” said Gil Castelo Branco, an economist at the watchdog Contas Abertas. That sum, he pointed out, is just about the size of Argentina’s GDP.

At the money-losing postal service, the challenge is to whip the place into better shape so some entity will be interested in taking it off the government’s hands. Temer has tasked the the head of the service, Guilherme Campos, with reducing the red ink.

The union representing the more than 100,000 employees is lobbying to save perks like health care for family members, including parents. Campos said there’s a harsh reality, one facing many agencies: “If there is no cost reduction, the future will be closing the doors.”

— With assistance by Gabriel Shinohara, and Ana Carolina Siedschlag

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