Opinion – Arminio Fraga: Candidates, what is your proposal for Brazil?

The election campaign is there. The weather is hot, but hollow, or worse. Here, as an example, I present a list of topics that should be discussed by candidates who are already in the field and, who knows, for a strong alternative candidacy that will be built (people, wake up!).

It is worth seeking inspiration in attributes common to the most advanced countries, by definition the most successful. Let’s take a look at some: 1) respect for the rule of law and democracy; 2) a resilient political system that learns from mistakes and guides state action; 3) impartial and efficient institutions; 4) a reasonably predictable and smooth economy capable of dealing with the inevitable cycles and crises of capitalism; 5) a robust social safety net; 6) focus on reducing inequalities and enabling social mobility and 7) focus on the productivity of the economy.

The Constitution follows this line, but in practice it has not been exactly like that. Let me start with the biggest problem: our democracy has been constantly attacked and questioned. Clear signs are the weakening of institutional control mechanisms, threats to the Judiciary, authorization for the possession of weapons and ammunition without identification, truculence with the press, the third sector and science, the profusion of fake news, unfounded questioning ballot boxes and frequent rumors and insinuations of a coup.

Don’t be surprised when an economist approaches the topic. Democracy is a non-negotiable principle, a fundamental pillar of the nation. I affirm with conviction that the current situation of attacks on institutions tremendously inhibits investment and development in Brazil. It is up to each candidate to reject this situation in an unequivocal, concrete and public way, so that democracy is not destroyed by the edges.

Our political system is dysfunctional, as it reflects a highly fragmented party structure and, in practice, stripped of principles that guide the search for the common good of the nation. The recent exchange of party affiliations and the functioning of the budget process, with its secret amendments, leave no room for doubt: it cannot be left as it is. There is a lack of confidence that Brazil is moving in the right direction, even if not in a straight line. It is not easy to imagine that the system will reform itself, but that is what the country needs, under a leadership supported by the majority vote.

Organized crime and lack of security have been spreading across the country. As stated recently in this Sheet Oscar Vilhena, suffer above all the poorest, but also affect the richest, who tend to invest less in the future of the country, if not emigrate. Lots to do here.

With the pandemic, the spotlight turned to SUS, giving deserved prominence to its important successes, but making it clear that resources are lacking to comply with the constitutional precept of universality and gratuity. A relevant goal would be to increase the coverage of the Family Health Strategy from just over 60% towards 100%, with defined deadlines and targets.

In the field of education, it is necessary to set ambitious quality goals (measured by internationally accepted criteria) and to take care of the devastating delay resulting from the pandemic.

The successful fight against extreme poverty through Bolsa Família needs to have its budgetary resources protected and expanded, and its mechanisms improved, to counteract the perverse impact of recessions, especially for those who work in informality.

The fight against income inequality must be the object of actions both on the side of the unfair tax burden and public spending, a valuable lever for social mobility. There is no longer any reason to wait to reform the Income Tax rules, nor to postpone a profound rethinking of public spending priorities.

With regard to the productivity of the economy, in addition to efforts in the areas of education and health, it is necessary to approve a reform (already mapped) that replaces the current chaos of indirect taxation with a well-designed value-added tax. There is also an administrative reform aimed at the productivity of the State itself.

I love the possible transformation of Brazil from a pariah into an environmental power. A Green Brazil would contribute (and would be paid for its contribution) to reduce global warming and preserve the planet’s biodiversity. Additionally, it is crucial that people understand that the benefits would go even further, as caring for the environment (read sanitation and pollution) would immensely improve their quality of life and self-esteem. This vision is also coupled with the necessary repositioning of foreign policy, which needs to return to its roots.

Finally, it is necessary to strengthen the macroeconomic tripod to definitively reduce inflation, interest rates and uncertainty in the country. I’ve already spent a lot of ink on this topic. I will spare them today.

I think that strengthening democracy and the political system are by far the most important and urgent proposals. Therefore, they demand firm positions from any candidate who actually intends to put Brazil on a path of development.

As for the other proposals, where do the resources come from? More debt doesn’t seem feasible or even recommendable, we’ve already seen that movie. I repeat: there are relevant spaces for a redirection of public spending based on reforms in three major areas: in the State payroll (as a whole), in Social Security (yes, it is still lacking) and in Income Tax subsidies.

I know very well that it is not exactly a proposal of political and popular appeal. Unfortunately, it is in the nature of populist discourse to conceal cause-and-effect relationships in the economy. In this they even count on merchants of miracles, who in turn have the bad memory of the majority.

In general, there is only talk of the positive side of the proposals, which would magically be financed through growth. Note that the reforms advocated here require resources that far exceed what is needed to restore the tripod’s health. This is the real size of the challenge. With more conventional and social investments, the growth of the economy would actually be much higher and more inclusive. But without fonts, there is no program. Without a program, there is no trust and investment. Without investment, there is no growth. That simple. Perhaps the electorate will understand this chain, it doesn’t hurt to try.

I see room for a third candidacy, one that presents itself to the debate with clear positions on proposals such as those summarized here. At the very least, it would enrich the debate. Who knows, maybe even, with competence and luck, he won’t win the mandate to fix our country?