A comparison between economic indicators in the Luiz Inácio Lula da Silva (PT) and Jair Bolsonaro (PL) governments shows that the PT did better in practically all areas.
To his disadvantage, Bolsonaro faced the Covid pandemic and the war in Ukraine. But Lula went through, at the end of his government, in 2008-2010, the biggest international turmoil since the Great Depression (1929), when the North American subprime crisis occurred, causing the collapse of bank credit and a global recession.
Many attribute the good performance of the Lula government to a supercycle of high prices for the commodities that Brazil exports, which would have led the country to receive more dollars and become proportionally richer. But Bolsonaro is also going through a period of skyrocketing international prices for basic products.
The difference is that, this time, for reasons related to the political and institutional distrust generated by Bolsonaro, Brazil ended up not benefiting so much from this conjuncture.
In the 2000s and until 2013, Brazil also kept its public accounts adjusted, with annual primary surpluses to pay interest on the public debt, which reduced state indebtedness.
With less risk of insolvency, the country attracted billions of dollars in investments, pushing down the price of the American currency.
Today, faced with institutional and fiscal risks, many exporters have avoided internalizing dollars they receive in foreign sales. By keeping them out of the country, the price of the US currency does not drop as much as it did during the Lula government — even harming the fight against inflation, as many goods and services are dollarized.
Indicators such as retail sales, stock market appreciation, changes in the dollar and interest rates, inflation, the evolution of public debt and inequality advanced more under Lula than under Bolsonaro.
The data are from official sources, such as Ipeadata (from the Institute of Applied Economic Research, linked to the Ministry of Economy), Central Bank, IMF and IBGE, among others, supervised by Marcos Hecksher, from IBGE’s National School of Statistical Sciences (Ence/ IBGE).
When Lula took office in 2003, Brazil ranked 13th among the world’s largest economies, according to the International Monetary Fund (IMF) ranking, which calculates countries’ GDP in dollars. Upon leaving the presidency, at the end of 2010, the country had risen to 7th position.
With Bolsonaro, Brazil moved from 9th place in 2018 to 13th in 2021. With growth projected for this year, estimated at 2.8% by the IMF, the country is likely to end 2022 in a more favorable position.
For Hecksher, from Ence/IBGE, the data show that the fear that the economy could go into reverse in the event of Lula’s eventual victory on Sunday (30) seems unfounded.
“Both presidents faced important crises, which affected Brazil and other countries. But the results show that Lula did better in managing the economy in these periods.”
José Francisco Lima Gonçalves, chief economist at Banco Fator, says that if Lula did not make important structural reforms in his government (such as tax and administrative reforms), neither did Bolsonaro.
“The pension reform approved in the current government [em 2019] came ready from Michel Temer’s team [2016-2018]as well as the referral for approval of the New Legal Framework for Sanitation [2020]”, he says.
By not granting readjustments to the civil service during his term, reducing the salary gap in the public sector compared to the private sector (estimated at +67% by the World Bank), Bolsonaro reduced spending in this area – the second largest in the federal government, behind Social Security. .
“But the ideal would have been to approve an administrative reform, to reorganize salaries and careers in public administration. Not a linear freeze, without considering more or less productive areas”, says Gonçalves.
In privatizations and concessions, Bolsonaro advanced, as in the remodeling of bids that went wrong in the Dilma government (2011-2016). It also privatized BR Distribuidora, Transportadora Associada de Gás and the Landulpho Alves refinery, in addition to diluting Eletrobras’ capital.
During the Lula government, there were also advances. As in the auctions for the construction of the Santo Antônio and Jirau plants and the concessions of the Régis Bittencourt and Fernão Dias highways, among others.
For Sérgio Vale, chief economist at MB Associados, the big question, in the event of Lula’s victory, is whether the former president will have a government more similar to that of his first term or to his second, when he began to sow problems that would worsen under Dilma’s government.
“Lula was benefited, at the beginning of his government [2003], by a synchronized world growth cycle, which would end in 2008/2009, with the global financial crisis. That’s when he started to relax on the tax side”, says Vale.
“This time, if elected, he will take the world in the opposite direction, with many countries cooling off to fight inflation, which will make his life more difficult, especially on the fiscal side.”
Launched by Lula on Thursday (27), the “Letter to Brazil of Tomorrow” promises fiscal responsibility, but has a series of items that refer to his second term and the Dilma administration, such as a more active role for the BNDES.
In the Bolsonaro government, despite high public spending in the pandemic and, now, in the electoral period (including breaking the constitutional spending ceiling), there is a fiscal surplus of R$ 33.8 billion in the accumulated until September 2022 – the largest for the country. period since 2013, discounting inflation.
This fact signals stabilization of the debt/GDP ratio, something extremely positive and fundamental for the country’s solvency, which had deteriorated significantly during Dilma’s government.
Apart from economic issues, Vale says he hopes that, in the event of Lula’s victory, there will be a reversal in the issue of environmental devastation. A topic that, in the future, could harm Brazil’s brilliance in agribusiness.
In security, an area of interest to Bolsonaro, but the responsibility of the states, there has been no improvement in the indicators of murders and violent deaths by police officers per 100,000 inhabitants in the current government. The data show a significant reduction before, in the Temer government.
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