President Jair Bolsonaro recently sanctioned a law to scrap a BRL 8.6 billion public fund used to contain the weakening of the Brazilian currency and pay the public debt. Now, this money goes straight to the Treasury Department and cannot be used to fight the Covid-19 pandemic. While this decision was widely criticized, the president’s hands were tied, as Brazilian legislation prohibited him from using the fund for anything else other than taming the rise of the U.S. Dollar or paying off public debt. According to the Economy Ministry, Brazil has 281 of these public funds that pool federal money to be used in specific areas, such as education, health, the prison system, and telecommunications.
The existence of these funds goes back to 1922, when they were created to help guarantee that part of Brazil’s tax revenue would be set aside for areas deemed as vital for development. But as time passed, the solution became a problem: the number of public funds skyrocketed,...
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