What’s Next for Brazil’s “New Right”?

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For the first time in more than two decades, Brazil has a right-wing politician as the head of state. But Bolsonaro’s victory signifies more than just a devastating defeat of the Worker’s Party (PT) — the victorious party in the last four presidential elections. It represents the arrival to power of the Brazilian “new right” (labeled by some as “far-right”), which they themselves describe as: “liberal” on the economy and socially conservative.

With his anti-establishment and anti-corruption rhetoric, the ex-military candidate Bolsonaro captured the dissatisfaction of the voters with the PT, the party of the ex-president Lula da Silva, who is imprisoned for corruption and money laundering. After 14 years in power, the Worker’s Party (PT) left behind a country morally, socially, and economically in crisis. Years of PT rule led to the biggest corruption scheme in the history of Latin America (known as Petrolão); an endemic economic crisis which drastically slowed the country’s development and left an unemployment rate of 13%; and one of the nation’s worst values crises in decades.

This is the biggest turning-point in Brazilian politics since the end of the dictatorship and the re-democratization of the nation in 1985. The Congress experienced a turnover of 54%, and specialists consider that this will be the most conservative Congress in almost 30 years. An example of this is the quick growth of the representation of the PSL (the party with which Bolsonaro is affiliated) in the Chamber of Deputies. The party went from a couple of elected representatives at the beginning of this campaign to 52, becoming the second largest parliamentary bench, after the Worker’s Party, who has 56 deputies.

This perception is reinforced by the return of the military to the center of politics, which causes fear in many citizens who still remember the dark times of the military regime, characterized by censorship, repression, tortures, and extrajudicial murders to dissidents and journalists. These were positions that, according to supporters, “were necessary to prevent the country from becoming a communist dictatorship.” Bolsonaro, an admirer of the regime (1964–1985), was a captain in the reserves; his vice-president was a general of the Army Reserve, Hamilton Mourão. And the future government will possibly have several other officers of the Armed Forces in its ranks.

For the political scientist Eliezer Rizzo de Oliveira, there is a high risk that partisan politics will return to the “military quarters.” According to Oliveira, “There is a difference between a government containing members of the military, and a military government. But we have a new situation, which is the emergence of a charismatic leadership (under Bolsonaro).”

Many citizens have the expectation that the new president will solve the economic crisis, but at the same time, others believe that the country will suffer a huge a decline in civil liberties.

Economic Policy

Taxes and Regulations

In order to become more competitive, Brazil will have to deal with numerous regulations that reduce innovation. Namely, a complex and unjust tax system, and bad infrastructure make the entrepreneur’s life more difficult in Brazil. On one front, the reduction of that cost could come with a broad tax reform, which not only simplifies the payment of taxes but makes its burden more similar to that of advanced countries. In the yearning to pay their bills, government after government have been relying on the collection of taxes on consumption and labor. According to the Organisation for Economic Co-operation and Development (OECD) data for 2014, Brazil taxes goods and services at an average of 16.28% of the product. This is well above most developed countries, where this type of tax is equivalent to 10% to 12%. In the United States, it is 4.5%.

Given the serious problems facing Brazil and the concerted opposition he will face from the PT and its various allies, though Bolsonaro’s job will be far from easy. He is tasked with restoring confidence and prosperity to a deeply divided nation — only time will tell if his new-found support for liberal economics can co-exist with his deeply authoritarian instincts.

Full article: What’s Next for Brazil’s “New Right”? (Mises Institute)

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