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  • For years, it was one of the fastest-growing economies in the world.

  • At the turn of the century, Brazil was touted for its huge economic potential.

  • The South American country was named alongside Russia, India and China as the emerging markets

  • with the capacity to eclipse the world's biggest economies.

  • They even had a popular acronymBRIC.

  • Brazil briefly overtook the United Kingdom as the world's sixth-largest economy in 2012.

  • But then, things began to slow down.

  • I'm Laura Carvalho, I am an associate professor in the Economics Department at the University of Sao Paolo.

  • Laura is the author of a best-selling book on the rise and fall of the Brazilian economy.

  • It's called The Brazilian Waltz.

  • And it's organized in chapters: the step forward, the step sideways

  • and the step backwards of that waltz, right?

  • So the idea there is to try to explain why Brazil went from an economic boom in the 2000s.

  • But then from 2011 up until 2014, you had a slowdown in the Brazilian economy.

  • This was due both to changes in the external sector, but also what I consider some mistakes

  • in the economic policy framework.

  • And then finally, you had the step backwards, and I think we're still there today.

  • So, you had a very deep economic recession in 2015 and 2016, also a lot of political turmoil.

  • This political turmoil later fuelled the rise of an unlikely candidate in the 2018 Brazilian general election:

  • Jair Bolsonaro.

  • The president is one of the most dangerous social media influencers in Brazil.

  • When Bolsonaro arrived, it was as if a rock star had arrived.

  • People were just flocking towards him, elbowing each other to get a picture with him.

  • Just like the U.S.'s Donald Trump, right-wing firebrand Bolsonaro was, at the start, dismissed

  • by most media outlets.

  • Gustavo Ribeiro is a journalist based in São Paulo.

  • He is the founder of the Brazilian Report, which covers the country's politics and

  • economics for a foreign audience in English.

  • At the Brazilian Report, we were one of the first to actually take Bolsonaro seriously.

  • In the Brazilian press, if you take what had been written about Bolsonaro leading up to

  • the 2018 elections, he was merely disregarded as this joke candidate, a sort of a rogue,

  • far-right person who would not get that far.

  • Here, parties do not pay for ad space.

  • They are granted space according to their congressional representation.

  • And the bigger your coalition is, the more space you have.

  • Leading up to 2018, Bolsonaro did not have a coalition and he had something like 18 seconds

  • of airspace per day, just ridiculously little.

  • But what many pundits fail to realize was that voter behavior was changing a lot and

  • the reliance of voters on social media to get their news and to get political content

  • was increasing very fast.

  • And Bolsonaro, he was on campaign mode for years.

  • Bolsonaro's promises to tackle corruption and organized crime helped him clinch victory

  • in a country exhausted by political scandal and high murder rates.

  • Brazil is a country that sees around like 55 – 60,000 murders a year.

  • We have a big chunk of the population which has either suffered violence or know someone

  • who has suffered violence.

  • And then Bolsonaro comes offering quick, magical solutions.

  • That in his opinion, violence must be fought with even harsher violence.

  • But of course, it's ludicrous. It doesn't work.

  • But in people's minds, he is offering a solution.

  • People don't want to hear that okay, we have to start reforming how law enforcement

  • works and improving people's quality of life and maybe in 10-15 years,

  • we're going to reap the benefits.

  • People want, now, to be able to go to a bus stop and not worry if they're going to get

  • mugged or stabbed or shot, which is a real concern in a lot of peripheral areas in Brazil.

  • During our deep economic recession that started at the end of 2014, but was actually worse

  • during 2015 and '16, you had at the same time a big corruption scandal that was linked

  • to what they called the 'Car Wash Operation'.

  • So the 'Carwash Operation' was looking into corruption inside the Brazilian oil company

  • Petrobras.

  • The investigation was calledOperation Car Washbecause it was first discovered

  • at, you guessed it, a car wash.

  • What started out as a money-laundering investigation soon grew to implicate business figures, politicians

  • and even two former Brazilian presidents, Luiz Inacio Lula da Silva and Dilma Rousseff.

  • It's not that the corruption itself caused the economic crisis.

  • There are many other explanations for that crisis, including the big fall in oil prices.

  • While Bolsonaro was hard on crime, running the economy wasn't his forte.

  • Instead, he left the running of the show to businessman and free-market advocate Paulo

  • Guedes to lead reforms such as tax-cuts and deregulation.

  • Paulo Guedes is someone who was promoting from the beginning, the privatization of all

  • the public enterprises in Brazil, all the public companies, the reduction of the size

  • of the state in all areas, including health and education.

  • These reforms painted Bolsonaro as pro-market, winning him the support of Brazil's business elite.

  • We will work to lower the tax burden, streamline rules and make life easier for those who wish

  • to produce and do business as entrepreneurs, invest and create jobs.

  • But the big economic turnaround they were hoping for never happened.

  • When the pandemic hit, very quickly, there was a recognition in society that it would

  • be impossible to have people stay home and comply to any type of restrictions and sanitary

  • contingency measures if they didn't have any source of income.

  • His handling of it was catastrophic, he waited a long time to buy the vaccines.

  • Everyone wanted the vaccines, the anti-vax movement in Brazil is very small.

  • In October 2021, Bolsonaro released a video to his millions of social media followers,

  • claiming there was a link between Covid-19 vaccines and AIDS.

  • Facebook and YouTube all jumped into action to remove the post.

  • He has been a vector of disinformation.

  • He often touts unproven treatments against Covid.

  • He went against scientific consensus on almost every issue regarding the pandemic.

  • Despite the fact that Bolsonaro oversaw one of the world's most disastrous COVID responses,

  • congress approved what went on to become Brazil's biggest welfare program in history, which

  • paid around $110 a month to about 60 million vulnerable workers.

  • It doesn't seem a lot but that actually is more money than many

  • people in Brazil have ever seen in just a month.

  • That reduced extreme poverty levels in Brazil to the lowest on record, and then that propelled

  • Bolsonaro to the biggest approval ratings of his administration.

  • In 2020, I would say that the Brazilian economy actually behaved relatively better if you

  • compare it to the rest of the world, and this is only due to the cash relief big program.

  • But of course, this was not the initiative of Bolsonaro's government.

  • It was actually a lot of pressure from civil society and social movements and so on.

  • At the same time, because of that emergency program that was so strong, he started to

  • get more support of low-income voters that he did not in the election.

  • Almost 6% of GDP of actually giving money to people, helped attenuate that recession quite a lot.

  • But then in '21, the scenario changed completely.

  • When the government ran out of money to roll out these payments, the payments were suspended

  • between January and April of 2021.

  • Brazil's economic recovery from the pandemic shock was short-lived, slipping back into

  • recession in the third quarter of 2021.

  • That brought poverty rates up.

  • Food insecurity reaches over half of Brazilian households.

  • And more than ideology, and more than anything,

  • Brazilian voter behaviour is driven by people's economic conditions.

  • You give a man a fish and he eats for a day.

  • You teach a man how to fish?

  • Yes, but in many areas in Brazil, there is no pond for this sad man to fish.

  • Despite its political and economic woes, Brazil is blessed with an abundance of natural resources,

  • making it one of the largest producers of tin, iron ore and phosphate.

  • Its extensive river systems wield enormous hydroelectric potential, while huge swathes

  • of the Amazon rainforest lie in Brazil.

  • The Amazon is an opportunity to actually have a transition for a green economy in Brazil.

  • And in fact, you have a lot of job potential that are linked to bioeconomy and various

  • sustainable activities that depend and rely on the Amazon being standing

  • including our exports potential, right?

  • However, there is a problem.

  • Bolsonaro has always been against environmental regulations.

  • He has enacted dozens of pieces of legislation that reduces the government's power to curb

  • deforestation, and he has always taken the side of loggers.

  • Countries are implementing sanctions and barriers to trade due to the environmental consequences

  • of this strategy.

  • Bolsonaro's government is much worse than whatever we had in the past

  • in terms of our potential and possibilities.

  • Six months into Bolsonaro's time in office, deforestation in the Amazon had accelerated

  • over 60% over the same period in the previous year.

  • In 2021, deforestation in Brazil's Amazon rainforest reached a 15-year high.

  • In the same year, during the United Nations Climate Change Conference, or COP26, however,

  • Brazil committed to end deforestation by 2030.

  • In my opinion, it's definitely just paying lip service when he makes those pledges during COP26.

  • But and this is important, it does not mean that corporations in Brazil are not growing

  • more aware of the need for more sustainability because ESG has become a trend in financial markets.

  • And a lot of companies who seek funding from investment funds will have to play by those rules.

  • However, it would not be fair to say that Brazil's environmental problems begins with

  • Bolsonaro because the country has lost, between 2000 – 2018, around 500,000 square kilometres

  • of native forest, not only in the Amazon, but throughout the whole country, which is

  • an area equivalent to the size of Spain.

  • While Bolsonaro inherited many problems from previous administrations, including the Amazon,

  • he has also fallen short on many of his promises.

  • As Brazil enters an election year and his presidency in jeopardy, Bolsonaro has tried

  • to exert a tighter grip on the economy, leading to a rumored fallout with big business and

  • Guedes, his economic advisor.

  • Even the people who were supporting him for that reason are very disappointed because

  • he did not carry out the structural reforms and the type of economic policies that have

  • been promised in his campaign.

  • There's also a very big devaluation of our currency that happened throughout the pandemic.

  • And this in Brazil actually ends up feeding even more into higher prices.

  • Brazil also deteriorated in the past few years, its position in the Mercosur.

  • Mercosur - or the Southern Common Market - is a trade bloc in South America that was established in 1991.

  • Brazil had a lot of influence in the negotiations in the region.

  • It actually gave up on that role by engaging in conflicts and different types of trade

  • barriers with the partners of Mercosur.

  • They have tried to push away and actually increased trade barriers to the trade partners

  • of South America.

  • So, it has a very bad relationship with Argentina, which is one of our major trade partners.

  • Our industry is losing ground and is struggling more and more.

  • Brazil remains isolated from most production chains, and we are becoming a country with