After a stubbornly fought 2018 election campaign which fractured Brazil, Jair Bolsonaro was always set to be a divisive president, not helped by his own unapologetic persona. But the government’s struggles to keep its promises of sweeping reforms and liberal economic measures quickly plunged Mr. Bolsonaro’s approval ratings to the lowest-ever for a first-term head of state. However, a new poll shows that at least one group remains faithful to the new government: business owners.

According to a nationwide poll sponsored by BTG Pactual bank, 59 percent of 1,000 businessmen consulted in April considered the government’s performance as “good” or “great.” Though not statistically comparable, due to the differences in sample size and methodology, Mr. Bolsonaro’s performance is much better than among overall voters—39 percent.

</span></p> <p><span style="font-weight: 400;">Although we can make a case that the government hasn&#8217;t accomplished much during its first four months, one thing is certain: the administration&#8217;s early steps have largely been to cater to the business class, such as pushing through privatization plans established by former President Michel Temer, and the so-called &#8220;</span><a href="https://brazilian.report/power/2019/05/02/bureaucracy-bolsonaro-business-free-decree/"><span style="font-weight: 400;">Economic Freedom Decree</span></a><span style="font-weight: 400;">&#8220;—which aims at fostering investments by</span> <a href="https://brazilian.report/money/2019/02/15/legaltech-brazil-bureaucracy/"><span style="font-weight: 400;">reducing red tape</span></a><span style="font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">The agribusiness sector seems to be the source of Mr. Bolsonaro&#8217;s most-faithful supporters—with 69 percent of the segment&#8217;s leaders deeming the administration as good or great. The president has pandered to rural producers on several occasions, granting protectionist measures and sometimes even going</span><a href="https://brazilian.report/money/2019/04/05/big-business-brazil-economic-opening/"><span style="font-weight: 400;"> against his Economy Minister</span></a><span style="font-weight: 400;">. </span></p> <p><span style="font-weight: 400;">One thing is interesting, however. Mr. Bolsonaro </span><i><span style="font-weight: 400;">does </span></i><span style="font-weight: 400;">manage to conserve support among big business—and big business is a major driving force within Congress. So, why hasn&#8217;t this support translated into a strong government coalition?</span></p> <p><span style="font-weight: 400;">“If you look at the electoral map, except from the Northeast, the president was supported by the urban middle-class, as well as agribusiness and financial markets,&#8221; says Rogério Baptistini, a political scientist at Mackenzie Presbyterian University. &#8220;The agribusiness sector has aligned itself to Bolsonarism but has not acted accordingly in Congress, maybe because [Mr. Bolsonaro&#8217;s] relationship with Congress has been rocky.&#8221;</span></p> <hr /> <p><img class="alignnone size-full wp-image-17176" src="https://brazilian.report/wp-content/uploads/2019/05/export-PwfAG.png" alt="Business owners backing Brazil's Bolsonaro, says poll" width="1200" height="866" srcset="https://brazilian.report/wp-content/uploads/2019/05/export-PwfAG.png 1200w, https://brazilian.report/wp-content/uploads/2019/05/export-PwfAG-300x217.png 300w, https://brazilian.report/wp-content/uploads/2019/05/export-PwfAG-768x554.png 768w, https://brazilian.report/wp-content/uploads/2019/05/export-PwfAG-1024x739.png 1024w, https://brazilian.report/wp-content/uploads/2019/05/export-PwfAG-610x440.png 610w" sizes="(max-width: 1200px) 100vw, 1200px" /></p> <hr /> <h2><img class="alignnone size-full wp-image-17178" src="https://brazilian.report/wp-content/uploads/2019/05/export-CUmPN.png" alt="Business owners backing Brazil's Bolsonaro, says poll" width="1200" height="372" srcset="https://brazilian.report/wp-content/uploads/2019/05/export-CUmPN.png 1200w, https://brazilian.report/wp-content/uploads/2019/05/export-CUmPN-300x93.png 300w, https://brazilian.report/wp-content/uploads/2019/05/export-CUmPN-768x238.png 768w, https://brazilian.report/wp-content/uploads/2019/05/export-CUmPN-1024x317.png 1024w, https://brazilian.report/wp-content/uploads/2019/05/export-CUmPN-610x189.png 610w" sizes="(max-width: 1200px) 100vw, 1200px" /></h2> <hr /> <h2><img class="alignnone size-full wp-image-17177" src="https://brazilian.report/wp-content/uploads/2019/05/export-Ezf61.png" alt="Business owners backing Brazil's Bolsonaro, says poll" width="1200" height="866" srcset="https://brazilian.report/wp-content/uploads/2019/05/export-Ezf61.png 1200w, https://brazilian.report/wp-content/uploads/2019/05/export-Ezf61-300x217.png 300w, https://brazilian.report/wp-content/uploads/2019/05/export-Ezf61-768x554.png 768w, https://brazilian.report/wp-content/uploads/2019/05/export-Ezf61-1024x739.png 1024w, https://brazilian.report/wp-content/uploads/2019/05/export-Ezf61-610x440.png 610w" sizes="(max-width: 1200px) 100vw, 1200px" /></h2> <hr /> <h2>Follow the money</h2> <p><span style="font-weight: 400;">Undoubtedly, business leaders&#8217; perception is linked to their expectations for the economy. While half of the surveyed businessmen consider the current state of things to be &#8220;bad&#8221; or &#8220;terrible,&#8221; and 41 percent believe it is unchanged since 2018, expectations for the nearby future are good overall. Almost half of business owners have &#8220;good&#8221; or &#8220;great&#8221; economic <a href="https://tradingeconomics.com/brazil/forecast">expectations</a> for the coming six months. </span></p> <p><span style="font-weight: 400;">In Brazil, these perspectives have been connected to one single issue—the government&#8217;s ability to pass its reform of the pension system and provide some balance to federal accounts. </span></p> <p><span style="font-weight: 400;">As expected, the overwhelming majority of business owners support the bill, and, so far, the majority is confident it will be approved, most likely in the third quarter of the year. However, they do expect the bill to be watered down, creating savings lower than the BRL 1.2 trillion in ten years cited by the government. </span></p> <p><span style="font-weight: 400;">Thirty-six percent expect between BRL 500 billion and BRL 700 billion in savings, while another 36 percent are more optimistic, foreseeing up to BRL 999 billion in savings. The original bill is intended to economize BRL 1.2 trillion for the next decade. </span></p> <p><span style="font-weight: 400;">However, pension reform is not enough for business leaders. Three out of four think a tax reform should be the government&#8217;s first priority after the pension reform battle is done—while 16 percent want microeconomic reforms to boost productivity.  </span></p> <p><span style="font-weight: 400;">However, big business support for a more liberal economy has its limits. Business owners still defend public banks to operate as loan providers at low interest rates—which goes against what the government&#8217;s economic team has preached since the election. Deputy Economy Minister Marcelo Guarany said in a recent interview that this administration will not push for tax breaks, instead opting to reduce bureaucracy and boost competition instead. </span></p> <p><span style="font-weight: 400;">“It is a new world, we have no more money to spend, no more benefits to give,” he said.

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PowerMay 08, 2019

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