Bolsonaro speeds up payments to the poor as election looms
Ridiculed for his lack of understanding of markets, President-elect Jair Bolsonaro made a decision that will surely be widely criticized within his party and by much of Brazil’s left. He chose to speed up the process of paying off public-sector creditors — a policy move that has been derided by the international financial community but which will be critical to the future of the country’s fiscal future.
President-elect Jair Bolsonaro wants to cut pension payments in Brazil, which he says is a problem that requires solving. Credit: Reuters/Adriano Machado
While the country’s economic elite — and the country’s foreign creditors — complain loudly about Bolsonaro’s inability to understand markets, this is hardly the first time Bolsonaro has chosen to spend public money in a way that is contrary to the wishes of the country’s leaders. Rather, it is the latest example of an increasingly common policy response on his part to foreign pressure, which shows him choosing to act contrary to the wishes of Brazil’s economic elites.
What is so unusual about this latest move is that Bolsonaro has decided to cut back on the payment of pensions, which he said has been a problem for several decades.
According to the World Bank, the percentage of public-sector pensioners who receive income-support payments has fallen to 17% of the total population. This is down from 36% in 1988 and 35% in 2010.
Although there have been some attempts to reverse this trend, it is clear that the problem, and thus the reason why the payment of pensions has become unacceptably low in Brazil, is because the government has never paid the pensions when it had intended to, and there are no penalties for non-payments.
Bolsonaro has always argued