Has Economy Minister Paulo Guedes lost his mojo?

Approaching 70 years old, economist Paulo Guedes had little to no experience in the public sector when he decided to sell his ideas for the Brazilian economy to a presidential candidate most pundits disregarded as a joke: the far-right former Army captain Jair Bolsonaro. The “marriage” between the pair — which the latter likes to call it — bore immediate fruits for both men. Mr. Bolsonaro could credibly champion an ultra-libertarian economic platform, while Mr. Guedes lent his credentials as a bonafide financial market operator to a would-be president who struggled to understand or explain even most basic macroeconomic concepts.

Interestingly, Jair Bolsonaro was not Mr. Guedes’ first choice — he had reportedly tried to convince famous TV presenter Luciano Huck into running for president, using his economic plan. His favored pretender decided against going into politics, so Mr. Guedes turned to the outspoken far-right candidate, who would eventually go on to win the presidency.

Make no mistake: Mr. Guedes had a crucial role in presenting Mr. Bolsonaro as a palatable candidate for the country’s business elites.

He was seen as the guarantee that a historically unadventurous Congress would promote genuine reforms to the federal administration. And Mr. Guedes’ agenda was incredibly bold. Presented as Mr. Bolsonaro’s economic tsar, he talked about privatizing “every single state-owned company,” and even mentioned selling the presidential palace. Nothing was sacred, and he supported scrapping long-held labor rights in favor of a “more business-friendly” atmosphere in Brazil.

All of this was music to the ears for markets, which promptly rallied behind Jair Bolsonaro’s presidential bid.

But after 18 months in office, Paulo Guedes’ aura appears to have faded. He has yet to carry out a single privatization project, and the most politically successful policy of this administration — the BRL 600 (USD 110) coronavirus emergency salary — is diametrically opposed to the liberal hands-off approach to the economy he has always preached.

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Promising too much, delivering too little

The Economy Minister has become known for his bold promises which are rarely met with results. Only this week was he able to submit a tax reform proposal to Congress — and still, it was just a tweak in Brazil’s uber-complex tax structure rather than a proper overhaul.

As a matter of fact, Mr. Guedes’ promises to present grand projects “next week” has become a running joke in Brasília, says journalist Thomas Traumann, who served as an aide to former President Dilma Rousseff and wrote a book about being Brazil’s finance minister,...