Brazil’s Disappointment

In the course of a decade, Brazil has gone from rising power to fallen star. Latin America’s largest economy enjoyed effervescent years under President Luiz Inacio Lula da Silva, whose eight-year tenure through 2010 coincided with a global commodities boom. Now Lula is in jail, his successor has been impeached and her replacement has been charged in an ongoing corruption investigation. Street crime is epidemic in Brazil’s cities, and the country has endured its deepest-ever recession. Fed up, Brazilians in 2018 elected a chauvinistic former Army captain, Jair Bolsonaro, to reverse the decline. Ending the 13-year rule of the leftist Workers’ Party, he promised to remake Brazil with an aggressive approach to crime and pro-market economic policies. Critics fear he’ll undermine democratic norms, stifle dissent and deepen Brazil’s divisions.

Prospects for a quick economic revival faded in the months after Bolsonaro took office in January as his administration struggled to negotiate legislation with Congress. Gross domestic product shrank in the first quarter of 2019, its first contraction since the 2016 end of the recession, and unemployment remained stubbornly high at 13%. Bolsonaro’s University of Chicago-trained economy minister, Paulo Guedes, set out to privatize some of Brazil’s long-protected stable of 400 state-owned companies, more than any other developed country. Within five months, a new infrastructure ministry had auctioned 23 of them, including airports, port terminals and a railway, raising 8 billion reais ($2 billion). At the same time, bitter political and cultural disagreements among government officials, lawmakers and Bolsonaro’s own sons were fought in the open on social media, dominating the headlines. Hundreds of thousands of protesters took to the streets in May to demonstrate against plans to freeze funding for universities. The rancor threatened to derail Bolsonaro’s highest-priority plan: an overhaul of the insolvent state pension system and increase in the retirement age. That’s essential to ensuring sustainability of the country’s debt and putting it on course to regain the investment-grade rating it lost in 2015. On crime, Bolsonaro has vowed to meet violence with violence. He issued a decree easing restrictions on gun possession, framing it as an anti-crime measure.