Pandemic did not cause Brazil’s economy downturn. And another lost decade is on the horizon

Anyone who lived in Brazil during the 1980s will remember two memorable events: the constant fluctuations in supermarket grocery prices — often several times a day — and “Sarney’s inspectors,” citizens who harangued shopkeepers in an attempt to freeze prices in the name of then-President José Sarney.

These inspectors would browse stores with a price list in hand and a green-and-yellow badge on their chest, monitoring prices and reporting any “irregularities” to the police. The plan was short-lived, and products began disappearing from shelves as inflation galloped out of control.

Indeed, Sarney’s inspectors were the most visible symbol of what is known as the Brazilian economy’s “lost decade.” The country saw its GDP contract year after year, while its foreign debt ballooned and decimated any perspective of recovery.

While this seemed like rock bottom for Brazil, worse was still to come. According to studies by think tank Fundação Getúlio Vargas (FGV), the decade...