Brazil’s Fiscal Woes Could Ruin Lula’s Big Year
Failure to deal with a widening deficit could undermine economic growth and his ambitions to position Brazil as the leader of the Global South.
Don’t let the handshake fool you.
Photographer: Ton Molina/Bloomberg
Brazilian President Luiz Inácio Lula da Silva is an old man in a hurry. A 78-year-old who sees his sensational return to power after more than a year in prison as a vindication of his special place in Brazil’s history, he faces a big year. Brazil will lead the Group of 20, hosting a series of high-level meetings for the world’s most important nations that will culminate in a summit of leaders in Rio de Janeiro this November. It’s a chance not only to stake his claim to lead the Global South, a voice for those nations seeking to remain equidistant from the Great Powers, but also to showcase “Lulanomics,” the blend of populist spending and dirigisme that he has pursued since taking office.
Yet there’s a cloud on the horizon that could well rain on his parade. Brazil may be on course to become the world’s ninth-largest economy, but it also faces a worsening fiscal position that Lula doesn’t seem too interested in addressing. That mistake threatens both the country’s growth potential and the president’s larger political project at home and on the world stage.