Felipe D’Avila: Economic recovery has four pillars: sustainability, transparency, openness and privatization

Brazil is tired of a president who needs the Ipiranga Post. The voter wants to know the candidate’s proposals, not the opinion of his supposed know-it-all. Therefore, as a pre-candidate for the Presidency of the Republic for the New Party, I make a point of not outsourcing the announcement of our agenda for Brazil.

PT and Bolsonarist populism destroyed the economy. He left us a tragic legacy of high inflation, record unemployment, 20 million Brazilians back in poverty and more than a decade of stagnation. The resumption of growth, investment and employment will require a government capable of restoring market confidence.

Brazil needs the world to grow again, and the world needs Brazil to ensure the planet’s sustainable growth.

We have land and climate to fix half of the planet’s carbon. The resumption of growth depends on an important change in attitude: it is necessary to treat environmental policy as a State policy. It will set the tone for economic, social and international policy. The world market has determined that two-thirds of global investment (around US$50 trillion) is earmarked for sustainable developments. To attract these resources, we will have to create a domestic carbon market, fight illegal deforestation, plant trees on degraded land and support the growth of environmental agribusiness.

We have the most competitive and sustainable agriculture in the world and we cannot allow Brazil to be retaliated against because of a handful of land grabbers who ruin the country’s image. As we strive to be the first major carbon neutral nation, we will transform Brazil into one of the most attractive places to invest.

The second urgent measure is the unilateral opening of the economy. No country has prospered by closing itself off to world trade. We continue to be one of the most closed economies in the world, we sustain a nefarious public and private corporatism with protectionist, tariff and bureaucratic barriers that annihilated Brazil’s productivity and competitiveness. We are going to promote a gradual opening, and in four years we will be an open and competitive economy.

Unilateral opening will encourage the private sector to pressure Congress to vote on state reforms, such as tax and administrative reforms. The first is vital to cut the Brazil cost. The second is essential to reduce public spending.

The third pillar is privatization. We are going to sell the untouchable state-owned companies, such as Petrobras, Banco do Brasil, Caixa Econômica Federal and Eletrobras. They represent 80% of the value of state-owned companies — a universe of around 200 companies. It is not possible to carry out small-scale privatization — such as the sale of subsidiaries. In this way, the money goes to the state company’s cash, not to the Treasury, as happens when the holding company is sold. We will create a sovereign wealth fund with the resources obtained to invest in other priorities, such as education, research and development.

Fourth pillar: the creation of a transparent and true Budget. In a country with a secret budget and a parallel budget of state-owned companies —which grant hundreds of billions of reais in off-budget subsidies—, transparency with taxpayers’ money is vital.

We believe in a government in which all public spending will be included in the Budget; where there is nothing “out there”. In which it also has criteria for the evaluation of each expense, which will allow the annual evaluation of subsidies, tariff and tax exemptions and their impacts.

Thus, we will have criteria to end inefficient programs and idle structures and more money for programs that work. Finally, the Budget will have as its premise the stabilization of the debt/GDP ratio. The bursting of the spending ceiling in the Bolsonaro government reveals a tragedy: rising inflation and interest, which should raise the cost of debt financing, which could reach R$ 450 billion in 2022 (more than ten times the Bolsa Família) .

Without the construction of these pillars, Brazil is condemned to remain hostage to low growth, poverty and the PCC: patrimonialism, corporatism and clientelism. To execute this program, Brazil has several renowned economists who are in tune with this agenda. Names abound. What is lacking is political leadership to support them.

Series brings economic thinking from pre-candidates to the presidency. The Mercado section publishes articles on economic issues considered sensitive by pre-candidates for the Presidency of the Republic. The proposal is to start the debate of themes that should guide a good part of the campaign. The articles are mostly signed by economists who participate in the support group for pre-candidates.

According to their respective advisors, Senators Rodrigo Pacheco (PSD-MG) and Simone Tebet (MDB-MS) are initiating conversations with economic consultants and do not yet have spokespersons in the area. Invited to represent President Jair Bolsonaro, who will run for reelection, Economy Minister Paulo Guedes prefers not to speak at the moment.