posted on 04/19/2022 20:08 / updated on 04/19/2022 20:24
(credit: Edu Andrade/Ascom/ME)
In the midst of an electoral campaign on a trip to the United States, the Minister of Economy, Paulo Guedes, assured that President Jair Bolsonaro (PL) will win the elections in October. When asked about the matter, during a virtual event organized by the Center for Strategic & International Studies (CSIS), an American think tank, the head of the economic team played down the opinion polls that give former president Luiz Inácio Lula da Silva an advantage. Silva (PT) and stated that the difference between the two is shrinking and reality is imposing itself.
“President Bolsonaro travels around the country and is welcomed ‘by hundreds of millions’ of people. And can the other candidates walk the streets?”, said Guedes, this Tuesday (4/19), in Washington, where he has an extensive agenda of meetings with investors in parallel to the annual spring meeting (in the Northern Hemisphere) of the Monetary Fund. International (IMF) and the World Bank. The minister highlighted the reduction in Lula’s advantage over Bolsonaro in the polls over the last few months and assured that this difference “is converging on reality”.
During the approximately 30-minute conversation broadcast on CSIS networks, the minister reiterated that the current government is promoting a transition from a state-led economy to a market economy, “building prosperity”. However, he avoided talking about the current figures that show a new trend of stagnation in the middle of an election year, with double-digit inflation and interest rates, high unemployment, indebted families and shrinking incomes.
According to new IMF projections, Brazilian Gross Domestic Product is expected to grow 0.8% instead of 0.3% as projected in January, largely due to higher commodity prices due to the war in Ukraine, as Brazil is a major food exporter.
When commenting on inflation, Guedes acknowledged that the phenomenon is global and highlighted that, as the Brazilian Central Bank began the cycle of monetary tightening earlier, and therefore, in his assessment, “Brazil will control inflation before the developed economies”.
Noises and Russia
The minister also reinforced during the speech that there is a lot of noise in democracy and misinformation about the Brazilian government, that there are foreign companies signing concession contracts “every week” in Brazil. “We have $30 billion raised in signing bonuses (in infrastructure) and another $200 billion in committed investments over the next 10 to 12 years,” he said.
The head of the economic team avoided criticizing Russia and admitted that, although Brazil was the only BRICS country, a group of emerging countries made up of Brazil, Russia, India, China and South Africa, to condemn the invasion of Ukraine in the of the United Nations (UN), the Brazilian government does not agree with the expulsion of Moscow from the IMF, when it was asked about the matter. “Under the Fund’s rules, a member country cannot be expelled,” he said.
Guedes also reiterated that the current moment is strategic for Brazil to join the Organization for Economic Cooperation and Development (OECD), the so-called club of the rich, and for advancing the free trade agreement between the European Union and Mercosur. “The perfect time is now, because Brazil is a key player in Europe’s energy and food security agenda,” he said. “If we do nothing now, we will be pushed in another direction”, threatened Guedes, after citing that several European economies, such as France and Belgium, are democracies “with sad histories”, because they are “sinking”. Meanwhile, Brazil seeks to expand alliances with other partners, such as Middle Eastern countries and the members of the Emerging 7 (E7), emerging BRICS countries plus Indonesia and Mexico.
When citing the group of emerging E7, Guedes made a wrong comparison. “These economies already have a GDP greater than the G7 (group of the most developed economies on the planet – Germany, Canada, United States, France, Italy, Japan and the United Kingdom”, said Guedes, without turning red with the calculation error.
According to IMF data, considering the GDP result of these countries in 2021 in dollars, the sum of the E7 GDP is only 66% of that recorded by the G7: US$ 26.7 trillion against US$ 40.4 trillion.
Another miscalculation by Guedes occurred when he was asked about the number of Japanese people living in Brazil and he replied “several million”. According to data released by the CIA, in February 2019, the population of Japanese and Brazilian descendants totaled 1.6 million people.
Earlier, Guedes participated in a meeting with North American business representatives who have commercial and investment interests in Brazil. The meeting was held at the headquarters of the Brazil-United States Business Council (Cebeu), in Washington. On the occasion, the minister presented updated data on the recovery process and spoke about the structural reform agenda in Brazil, according to information from the ministry’s press office.
“Guedes recalled the measures taken to protect the most vulnerable, with employment assistance programs and additional temporary income. He also pointed out that the progress of the infrastructure auctions and concessions program has been attracting private investment to the country,” the ministry said in a statement.
“The North American participants confirmed their commitment and willingness to increase investments in Brazil, taking into account the improvements in the business environment promoted by the federal government”, reads the note. After the event at the Brazil-United States Business Council, the minister had lunch with IMF executive director Afonso Bevilaqua.
The minister also had a meeting with the Indonesian Minister of Finance, Sri Mulyani. Brazil is negotiating free trade agreements with Indonesia and Vietnam, which could have an impact of BRL 25.7 billion on Brazilian Gross Domestic Product (GDP) by 2040, according to studies by the Foreign Trade Secretariat (Secex) of the Ministry of Economy. .
On Wednesday (20/4), the meeting of the G20, a group that brings together the 19 largest economies in the world plus the European Union, is scheduled. On Thursday (21/4) the ministerial meeting of the IMF and the World Bank will be held. In addition to the commitments with these two institutions, Minister Paulo Guedes’ agenda “includes meetings with representatives of the private sector, to show data on the recovery of the Brazilian economy, the process of Brazil’s accession to the OECD and the progress of the structural reform agenda” , according to the Economics note.
“Minister Guedes is also presenting information on improvements in the business environment and showing investment opportunities in the country,” the statement added.