Opinion – Marcos de Vasconcellos: Unemployment falls, GDP rises, but money owners want to know about the election

The week’s news was hijacked by two letters signed, so far, by hundreds of thousands of people, including personalities from the financial market and the business community, such as the chairman of the board of Itaú, Pedro Moreira Salles; Verde fund manager Luis Stuhlberger; the CEO of Magazine Luiza, Frederico Trajano; the president of Suzano, Walter Schalka; and José Olympio Pereira, former president of Credit Suisse in Brazil.

The documents say they are in defense of democracy and do not directly cite President Jair Bolsonaro and his attacks on electronic voting machines, but complain of “baseless attacks” and “unaccompanied by evidence” questioning the fairness of the electoral process. The letters became the subject of ten out of ten national news and, of course, disturbed the Planalto.

In a counterattack, the Chief Minister of the Civil House, Ciro Nogueira, decided to say, on his Twitter account, that the manifestos were signed by bankers because the creation of Pix would have taken R$ 40 billion from them. The explanation is pointless. I explain below. But it was replicated by Bolsonaro, who bragged about having given a “club” to the banks with Pix and facilitating the creation of digital banks.

This is pointless nonsense. Banks have never profited as much as during the Bolsonaro government. There were R$ 81.6 billion in profit in 2021, with Itaú, Bradesco, Santander and Banco do Brasil alone. Before Bolsonaro, the most they had managed to profit was BRL 69 billion, in 2018.

In the last 15 years, do you know when was the last time that large Brazilian banks had a significant drop in profit – apart from the pandemic event, in 2020? In 2016. Just when the country went through the institutional rupture of Dilma Rousseff’s impeachment. This did not even happen with the subprime crisis in 2008 and 2009.

What bankers and entrepreneurs are saying, as they sign the letters, is that institutional disruptions are bad for business. Brazil lives on foreign money and, without the confidence that democratic institutions will be respected, it is very difficult to attract the owners of the money.

An exclusive survey published in Monitor do Mercado shows how former finance minister Henrique Meirelles had to sweat to calm markets after his impeachment.

In just under two years at the helm of the portfolio, Meirelles made 297 official flights aboard FAB (Brazilian Air Force) jets. About 20% were on international trips, reaching all continents. No former Finance Minister, nor the current Economy Minister, Paulo Guedes, had such a high average of official trips per month.

On the 26th, the IMF (International Monetary Fund) more than doubled the growth forecast for the Brazilian GDP (Gross Domestic Product) this year. It went from 0.8% to 1.7%. Three days later, the IBGE (Brazilian Institute of Geography and Statistics) reported that, in June, we had the lowest unemployment rate since 2015.

These are numbers to be celebrated and that make the Brazilian showcase increasingly attractive to large foreign investors. But that will not be enough to bring money to Brazil, without the guarantee that the results of the polls will be respected. It doesn’t matter if the elected is Bolsonaro, Lula or another candidate. And the owners of the money know this. The market lives on expectations.