Since taking office as president, Jair Bolsonaro has worked to undermine the credibility of Brazilian institutions. His attention was never directed to economic reforms of a liberal nature, or even to the defense of a conservative program in customs. Bolsonaro rules through chaos, using it as a strategy to retain power and take over the state by small interest groups.
The focus of this column was a list of the risks of Bolsonaro precipitating institutional collapse by trying to win the election at any cost. This week’s Senate agenda served as a practical example of this, showing that Bolsonaro’s government is not alone in this pursuit. As I write, the Senate is voting on a proposed constitutional amendment that would place the country on a “state of emergency” due to rising oil prices. Initially, the proposal provided for compensation to states that decided to reset the ICMS for fuel.
However, the PEC has turned into a package of state benefits, into shameless electoral populism. The project provides for the enlargement and expansion of the Auxílio Brasil, the exchange of trucks, gasoline vouchers, a subsidy for public transport and compensation for the ethanol sector. All this cost almost 40 billion reais this year. Some of these expenses may not be temporary. This is particularly risky as there have been no technical discussions on which to base these budgetary decisions. Thus, the medium-term and long-term fiscal risk increases.
Despite the high fiscal costs, the greatest damage is of an institutional nature. The amounts will be released despite the election calendar and cost containment rules dictated by the golden rule and spending ceiling. This is an irreversible damage to the system of checks and balances of the state budget, already sick of speaker expenses and the like.
There are doubts about the constitutionality of the PEC. Unfortunately, this was not enough for senators, even from the opposition, to oppose the proposal. It is because of this political convenience that we see our institutions weaken more and more. A rule governing political behavior is useless if social agents band together to weaken the system of checks and balances they have created.
Bolsonarist’s project to damage Brazilian institutions now enjoys the support of almost the entire political class, which conveniently remains silent about the latest blow to institutions by this government.
*INSPER PROFESSOR, Ph.D. IN ECONOMICS FROM NEW YORK UNIVERSITY STONEY BROOKE
