Brazil’s future economy minister will prioritize pension reform, privatizations

President-elect Bolsonaro’s ‘economic guru’ Paulo Guedes plans to eliminate ‘labor burden’ and turn back on Mercosur

São Paulo |
Economist Paulo Guedes (left) said Brazil was “held captive by ideological alliances” with Mercosur
Economist Paulo Guedes (left) said Brazil was “held captive by ideological alliances” with Mercosur - @jairbolsonaro / Fotos Públicas

Brazil's future economy minister in the Jair Bolsonaro administration – which will start on Jan. 1 –, Paulo Guedes, announced that, in order to “control expenditures,” his economic plan includes pushing the pension reform, speeding up privatization processes, and downsizing the government. The relationships with the Mercosur trade bloc will also lose priority, the neoliberal economist said.

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“The first big item is Pension. We need a Pension Reform. The second big item to control government expenditure [will be] interest expenses. We will speed up privatizations, because it’s not reasonable that Brazil spends US$100 billion a year as interests on the national debt. Brazil ‘rebuilds’ one Europe every year. The Marshall Plan, which lifted Europe out of poverty after the war… Brazil ‘rebuilds’ one Europe every year and cannot lift out of poverty, so the policy is wrong. The third [priority item] is a State reform, government expenses. We are going to reduce privileges and waste,” Guedes said.

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In his first interview after the election, Guedes announced a “gradual economic opening” and an “attack on tax deficit.” Asked by a journalist whether it is possible to eliminate the deficit in one year, the future minister answered, “We will try, we will try. It’s doable, of course it’s doable.”

Regarding measures to make the economy heat up again, he said the government will eliminate the “labor burden to create, in two or three years, 10 million new jobs.”

Bolsonaro’s “economic guru” blamed the “high Brazil cost” on a lack of “legal security.” He promised to “regulate appropriately, create regulatory frameworks for infrastructure construction work, because Brazil needs investment in infrastructure.”


Guedes said Brazil has been “held captive by ideological alliances” with Mercosur. “When Mercosur was created, it was completely ideological. It’s a cognitive prison, and that won’t happen with us. It was that, in the sense that it only trades with people with Bolivarian leanings. We will not break off with anyone, we will not break off any relationships,” he said.

He also reiterated that the country will “trade with the world.” “It will be more countries, we will not be held captive by ideological relationships. We will trade as trade is. Come on, Mercosur is an alliance between a few countries here [in South America]. What if I want to trade with other countries around the world, can we?”

Edited by: Cecília Figueiredo

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