April 20, 2020

BRAZIL'S TRAGEDY:

Coronavirus Reverses Brazil's Economic Revolution (Mac Margolis, April 20, 2020, Bloomberg View)

When Paulo Guedes, Brazil's University of Chicago-schooled economy minister arrived at his desk in January of 2019, he came with an aggressive market-friendly vision for re-founding Latin America's biggest economy. His plan, cheered by captains of finance and industry: Slash the federal bureaucracy, hurl down trade barriers, curb the nation's fiscal eating disorder and sell everything. Brazil's state owned companies? "Runaway children who are now addicted to drugs," he quipped. All those public sector employees? "Parasites."

The coronavirus has torn up Guedes's textbook assignment. A rare economic liberal in a hemisphere of dirigistes, he is now the warden of a nearly $100 billion bailout, one of the biggest rescue operations in the emerging markets. The big state is even bigger. Those truant public institutions and their civil servants are all that stands between Brazil and the economic ventilator.

The overgrown government savings bank that Guedes grudgingly spared from the state company auction bloc, Caixa Economica Federal, is rolling out emergency aid to at least 54 million working poor, jobless and underemployed Brazilians. The mission of identifying and parsing eligible recipients and crunching the numbers has fallen to Dataprev, the social security data processing company that Guedes had been grooming for privatization.

Socialized medicine would give any self-respecting capitalist warrior apoplexy. And yet no one needed to tell Guedes that Brazil's best hope for healing the stricken in the accelerating Covid-19 contagion is bolstering the Universal Health System, or SUS, which treats anyone without charge. "Without SUS, we'd be in a ditch. It's a Brazilian benchmark," said Adriana Dupita of Bloomberg Economics. "There's no way you can fight this, no matter what your ideology."

It'll be hard to get back that reform momentum what with Bolsonaro aping Donald.

Posted by at April 20, 2020 11:51 AM

  

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