Brazil’s pension system is widely regarded—except among some economists from the Workers’ Party— as being something of a “ticking time bomb.” During his term, President Michel Temer tried to propose an overhaul of the system, spending BRL 100 million on ads against the “privileges” created by Brazil’s current pension regime, in which “those who work a little and make a lot get to retire early.” However, it was a futile effort to convince Brazilians that a reform is necessary. Organized lobbies protected themselves, with the help of Congress, and the reform went nowhere.
This week, future Minister of the Economy Paulo Guedes talked about the government “cornering” Congress in order to get some points of that reform approved in 2018. This would get investors excited about Brazil, and would spare President-elect Jair Bolsonaro from the political costs of such an unpopular reform.
However, Brazil is by no means the only country in which the pension system inspires deep worries about public finances. While life expectancy is up all over the world, birth rates are going in the opposite direction. Around the world, pensions will become a serious issue over the long term.