“We want a state that provides us with healthcare, education, sanitation. Instead of having a state of authorities, we want a state of civil servants, that serve the citizens. The public machine cannot keep feeding itself.” This was the rationale presented by Brazil’s Economy Minister, Paulo Guedes, when unveiling his ambitious initiative to redesign the Brazilian state, in a bid to balance public accounts and reclaim investment-grade status.
The plan delivered to Congress by President Jair Bolsonaro included three proposals to amend the Constitution, while other developments—such as administrative and tax reform—are set to follow. The goal is to make the federal budget more flexible and increase checks and balances to ensure financial responsibility for states and municipalities. Ultimately, either by reducing the number of municipalities or repaying debt, it aims to reduce the size of the Brazilian state, which currently has liabilities corresponding to 79.8 percent of GDP.