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New Brazilian Government and Its Impact on the Country
01/May/2019

The Brazilian economic scenario remains unstable and dubious after 100 days of new government in power completed in early April. Expectations, uncertainties, actions, controversial alliances, and impressive statements of the President.

 

The main issue that hits Brazilian news daily and is of great economic impact to the country is the issue of pension reform. According to experts, without this reform Brazil will break, however, this task has not been easy because the current government does not have adequate tools to form an allied base in the national Congress and thus facilitate the analysis and approval of this reform. The negotiation and attempt to talk with the legislation has been marked by discussions and clashes and without expectation of voting.

 

Another issue that is taking up space in the daily newspapers is the President's interference in the price of Oil that Petrobras would readjust. This action had a negative impact on the market and Bolsonaro was charged with the coherence with his campaign discourse where he defended economic liberalism.

 

Some of his immediate actions during these 100 days of government were:

- Signature of the Decree to facilitate the Possession of Weapons.

 

- Support to Trump government in the construction of the Wall with Mexico and the exemption of visas for entry of Americans to tourism / business without reciprocity in Brazil.

 

- Support the Israeli government with the promise to open a business office in Jerusalem after so many criticisms received to transfer the Embassy of Brazil from Tel Aviv there. With this decision, the Arab community in Brazil (which is one of the largest in the world) has negatively impacted this decision and in addition, Brazilian businessmen in the livestock sector fear the impact of relations between the Arab countries and Brazil considering that they are the largest importers of Brazilian meat.

 

- Declaration of commemoration of the Brazilian dictatorship of 1964 in Brazil, which was marked by torture and death.

 

According to a survey conducted in March, Bolsonaro´s government fell 15 points popularity of those who believed that his management was good. The population is afflicted by positive and economically impacting changes in the country, since the number for unemployment reached approximately 12% of the population.

 

In February, just as happened in the US, Ford closed one of its plants in Brazil. The São Bernardo do Campo plant is Ford´s oldest in the country and was responsible for the production of the New Fiesta hatch and Cargo, F-4000 and F-350 trucks. The plant is expected to remain closed throughout 2019.

 

In the same month, in a controversial demonstration, GM President announced that if there is no investment in the country and a tax reform, it would be difficult to keep the plants active. In March, GM announced an investment of US $ 10 billion in SP plants thanks to a program created by the Government of SP to give discount to the ICMS(sales/service tax).

 

Thus, in the midst of this turmoil of problems and events that Brazil faces, Bolsonaro´s government is expected to take more effective action, dialogue and strategic articulation with the Legislative, after all, the population expects positive changes in a fast and less glamorous way and spotlights .

 

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