Jair Bolsonaro, the wildcard in Brazil’s 2018 presidential election, is comfortable when interviewers try to press him on social issues. Known for his homophobic, racist, and sexist statements, Mr. Bolsonaro doesn’t miss an opportunity to double down on his antics. But the leader in all opinion polls (when former President Lula is not on the ballot) is visibly uncomfortable when asked about the economy. In a recent television interview, he said, once again, that he doesn’t understand the first thing about it.
Still, every time he does talk about the economy, Mr. Bolsonaro makes sure to nod in the direction of big business, saying his administration would always side with employers, to the detriment of workers. In a July event organized by the National Confederation of Industry – CNI, the voice of Brazil’s industrial class – the candidate pandered to his audience: “Your will must prevail,” he told representatives of big business. “The press must stop looking at you as the bad guys. Being a business owner in Brazil is to be the bad guy.”
If elected, Mr. Bolsonaro said that workers will have to choose: either they are offered fewer rights and a job, or enjoy all of their rights, but face unemployment. While neither option seems appealing to employees, the remarks helped the candidate win over the room. He was effusively applauded 12 times during his speech and left the stage as the most celebrated candidate of the event. While in many left-wing circles (and for many mainstream pundits) Mr. Bolsonaro is considered almost a joke candidate, with little chance of winning the general election, markets are taking him more and more seriously. A recent survey conducted among market operators by XP, an investment bank, shows that 48 percent believe the far-right candidate is the favorite to win it all. One year ago, Bolsonaro-believers amounted to 3 percent of surveyed market operators. After the event, CNI chair Robson Braga de Andrade, expressed no uneasiness about a possible Bolsonaro win. “His attitude could help solve some of the issues that are out of control,” Mr. Andrade stated. “We’re not worried about the right-wing. We want a president who can put the country back on track.” But if Mr. Bolsonaro doesn’t understand anything about economics, Brazilian industrials certainly do. And there’s reason for them to be fond of Mr. Bolsonaro: Paulo Guedes, the candidate’s lead advisor. Mr. Guedes is a libertarian economist with a Ph.D. from the University of Chicago, a known cradle of free market economics. In a nutshell, Mr. Guedes defends an extensive program of privatizations and concessions of public services to private entities. Last week, Mr. Bolsonaro admitted to the possibility of privatizing Petrobras, the crown jewel of Brazilian state-owned companies. The idea is such a taboo (even after the Car Wash scandal) that, in 2006, the pro-market Geraldo Alckmin wore a jacket with logos of state companies while pledging never to privatize them. Mr. Guedes also wants to further strengthen the federal spending cap (which has generated enormous budget cuts). He has defended the independence of the Central Bank from the administration, to set the monetary policy, and defends massive budget cuts. If he were American, Mr. Guedes would definitely side with the Republicans. But traditionally, Mr. Bolsonaro has been on the opposite side in economic matters. In years past, as a congressman, he voted against the Brazilian Real and against proposals for a pension reform system. “It’s no coincidence that he is outlining the reforms now, and defending privatizations,” says economist Thales Nogueira. “He has always gone in the opposite direction of the market’s agenda. Mr. Bolsonaro knows that if he doesn’t emphasize he has changed, he may lose support. Perhaps Paulo Guedes is the main vector for his rhetoric transformation.” While the courtship between Brazil’s big business may be one of a low profile, it is by no means new. Bloomberg reported that Mr. Bolsonaro was welcomed with laughs and applause in a conference promoted by BTG Pactual, one of Brazil’s largest banks. In October 2017, Brazilian and American businesspeople joined Mr. Bolsonaro for a tour around New York, Boston, Washington, and Miami. A source linked to the Council of the Americas told The Brazilian Report investors have praised him as a candidate. “It was an awkward environment, but the Council decided to go ahead with the controversial visit because of his performance in the polls. It wanted to keep the doors open to dialogue with multiple politicians,” the source says. So far, the only international and economic voice who has spoken out against Jair Bolsonaro is the Association of Ethical Shareholders of Germany, which holds at least one share of each company listed on the Frankfurt Stock Market. Deutsche Welle reported that the association released an official statement requesting German companies in Brazil stand against Mr. Bolsonaro. It calls the candidate a “fascist” – owing to his praise of known torturers of the military dictatorship. But German giants, such as Siemens, Volkswagen, and Mercedes Benz have preferred not to say anything about the far-right candidate.
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