Brazil - Politics
The political sentiment in Brazil is highly polarized between the left and right-wing supporters. Some highly discussed policy changes in Brazil include the new reforms about the pension system, pro-gun laws, economic reforms, taxation system, crime laws, and pro-business reforms.
Overview of Political Climate in Brazil
- In the last Brazilian elections, more than 57 million people voted for the far-right leader Jair Bolsonaro. Alternatively, a recent survey by XP Investimentos revealed that nearly 36% of Brazilians consider the government to be weak and terrible.
- A widespread political polarization is seen among the left and right-wing supporters in Brazil. Conservative Brazilians support Bolsonaro's government and Lula's conviction. Alternately, most progressive Brazilians find Bolsonaro as an authoritarian leader and Moro as a corrupt judge.
- According to a recent survey, it is noted that nearly 30% of Brazilians do not want to talk to a person supporting opposite political views. Also, about 65% of respondents feel that the president's rhetoric is affecting the country and government.
- A disagreement and lack of cohesion are seen between the president and his aides. Further, the Economy Minister, Chief of Staff, congressmen, and armed forces have opposed the views of the president on multiple instances.
- Many people consider the Brazilian president as the "Trump of the Tropics."
Most Discussed Policy Changes in Brazil
1) Environmental Policy Changes
- In August 2019, the Brazilian president made it clear that he intends to open the Amazon rain forests for agribusiness development. As a result, Norway and Germany withdrew their financial support to the Amazon Fund due to the new government's stance on deforestation.
- During the election campaign, the president suggested to follow Donald Trump's footsteps and withdraw from the Paris climate pact. Additionally, the country withdrew its offer to hold the UN climate change conference and canceled the UN preparatory workshop for climate change in Brazil.
- Further, the president has selected Tereza Cristina, as the agriculture minister for Brazil. He was a part of a powerful agribusiness caucus in Brazil.
- During the election campaign, the president promised not to convert a single centimeter of the rain forest as indigenous and develop pro-business policies.
2) Economic and Trade Reforms
- In May 2019, the government passed the "Provisional Measure on Economic Freedom," a specialized set of provisions for small businesses to reduce bureaucratic hurdles and increase innovation and entrepreneurship.
- Brazil is also working towards a free trade agreement between Mercosur (Uruguay, Argentina, Brazil, Paraguay) and the Pacific Alliance (Peru, Colombia, Chile, Mexico).
- Additionally, Brazil is also working towards an increasing trade between the US and Mercosur with a new free-trade agreement.
- The government recently approved the "federative pact,” a council comprising the president, supreme court head, chief auditors, house speakers, and state governors will monitor state, federal, and municipal budgets to check government spending. Further, if a certain threshold is reached, then the council will implement austerity measures like cutting salaries and working hours of employees.
3) Pension Reforms
- In October 2019, the government approved a landmark bill to reform the pension system in Brazil. The main change includes the retirement age for men to be 65 years and women to be 62 years.
- The special rule will affect people working as teachers, prison guards, federal police officers, and rural workers.
- The new rule will lead to a generation of more than $195 billion in savings over the next 10 years.
- Pension rule has been a tricky affair for the government because it needs to have a mandate of more than 2/3rd of congress representatives. Further, the reforms have been seeking a clear mandate over the past 30 years.
4) Tougher Crime Laws
- In February 2019, Justice Minister Sergio Moro proposed changes to 14 laws concerning corruption, violent crimes, and organized crime.
- The proposal seeks the convicts to be jailed on the first appeal to prevent impunity of well-connected criminals as their trials tend to crawl through conventional proceedings.
- The new proposal calls for a stricter punishment against habitual offenders and mandating gang leaders to fulfill entire sentences in a high-security prison.
- In August 2019, the president supported the new proposed reforms, "excludente de ilicitude," by stating that the criminals should die like cockroaches on streets.
5) Tax Reforms
- The newly elected government is working towards simplifying the country's complex taxation system into one single tax. Currently, the country features five types of indirect taxes, leading to confusion and conflict between the federal, state, and municipal governments.
- In August 2019, a new bill was proposed in Congress as the Constitutional Amendment Bill No. 45/2019. The bill will replace the existing consumption taxes by a single tax on goods and services, and it will be in accordance with the international value-added taxation standards.
- Additionally, the new system will imply a single tax rate across all businesses, and the VAT will be charged according to the consumer's destination. The destination-based taxation will end the "tax-wars" between different jurisdictions and will increase security for investors.
6) Relaxed Gun Ownership Rules
- In May 2019, the president implemented two new decrees regarding the ownership of guns and ammunition. The decree allowed adult citizens (aged 25+ years) to acquire up to four firearms if they qualify the necessary requirements.
- The decree also relaxed the ownership criteria for acquiring a firearm. As a result, truck drivers, lawyers, and elected politicians were allowed to carry a gun without proving the necessity for the same.
- In November 2019, the lower house approved the proposal for ownership of firearms with suggested changes.