Brazil: What would happen to the economy with Paulo Guedes as minister?

Jair Bolsonaro confirmed that he would name the renowned liberal economist in case of winning the elections on October 7

Brazil: What would happen to the economy with Paulo Guedes as minister?

Jair Bolsonaro, the right-wing candidate who leads the presidential elections on October 7, confessed his ignorance and lack of knowledge about economy. Therefore, he also confirmed that he would appoint Paulo Guedes as his Finance Minister in case he becomes president.

Leer en español: Brasil: ¿Qué le esperaría a la economía con Paulo Guedes como ministro?

Paulo Guedes has an extensive career full of experience on the financial and academic sector. The economist, a graduate of the University of Chicago, is one of the founders of Banco BTG Pactual, as well as the BR Investimentos group, now part of Bozano Investimentos, of which he is a majority shareholder. On the other hand, Guedes has also belonged to the board of directors of several companies such as PDG Realty, Localiza, and Anima Education.

According to Bloomberg, Guedes confirmed that, just as he claims to be a man who now builds and invests in companies, he also respects the academy. He has been a professor at some of the best private universities in the country, such as PUC-Río and Fundacao Getulio Vargas.

In addition, the economist is also one of the founders of the Millennium Institute, a think tank that disseminates liberal economic thinking and efficient markets. This institution represents the ideals of the economist and gives us an idea of ​​what could happen to the Brazilian economy if it were under his guidance.

Although Bolsonaro and Guedes have clashed before, about the privatization of state enterprises, they have achieved a series of consensus regarding the future of the country in terms of its policy and economy.

Will Guedes be Bolsonaro's puppet?

It is necessary to ask two important questions when contemplating the possibilities of the economist in Bolsonaro's cabinet in case he won the elections: How much power and influence would he have over decisions? Second, what would the country experience in its economy if Guedes becomes minister?

In the first place, it is important to mention that it is still unknown how much freedom Guedes would have over the reins of the national economy, since both are still in negotiations about its dynamics. However, it already begins to show the notorious influence Guedes would have on the hypothetical president.

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For example, Guedes convinced Bolsonaro about the importance of supporting the independence of the Central Bank when a few months ago he showed strong opposition to this. In addition, he also changed his mind about the social security system that currently supports the country.

One of the priorities for Guedes is to make a careful and studied reform of the social security system that the country currently has, since it is accused of being the main cause of the country's budget deficit.

According to Reuters, Guedes had considered the possibility of introducing a tax similar to the CPMF that came into force in 1993 and ended in 2007. It sought to subsidize the public health system by charging 0.38% of all financial transactions. This tax would be used to guarantee the solvency of Brazil's social security program while reviewing its unsustainable pension system.

Despite this, here we can see the premature state in which the ideological relations between the candidate and the economist are, because his team and he claim that the intention of his government would reduce the tax burden of Brazilians, because it is one of the highest in the continent. Through his Twitter account, Bolsonaro clarified that they would be working to reduce this burden.

Although there are still no clear ideas about what would await the national economy in case of being elected Bolsonaro, certain trends can be predicted.

In an interview for Bloomberg, Guedes said he had always seen politics from an economic lens and had never been involved with a political party, but he also confirmed that he would sacrifice everything for the good of his country.

LatinAmerican Post | Valentina Moya
Translated from “Brasil: ¿Qué le esperaría a la economía con Paulo Guedes como ministro?”

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