October 30, 2018 / 11:07 AM / 18 days ago

Bolsonaro's economic guru urges quick Brazil pension reform

RIO DE JANEIRO (Reuters) - The future economy minister tapped by Brazilian President-elect Jair Bolsonaro insisted on Tuesday that he wanted to fast-track an unpopular pension reform to help balance government finances despite mounting resistance to getting it done this year.

Paulo Guedes (2nd L) walks after a meeting with Brazil's President-elect Jair Bolsonaro, in Rio de Janeiro, Brazil October 30, 2018. REUTERS/Sergio Moraes

Paulo Guedes, whom Bolsonaro selected as a “super minister” with a portfolio combining the current ministries of finance, planning and development, has urged Congress to pass an initial version of pension reform before the Jan. 1 inauguration.

“Our pension funds are an airplane with five bombs on board that will explode at any moment,” Guedes said on Tuesday. “We’re already late on pension reform, so the sooner the better.”

He called the reform essential to controlling surging public debt in Latin America’s largest economy and making space for public investments to jump-start a sluggish economy. Markets surged in the weeks ahead of Bolsonaro’s Sunday victory on the expectation that he could pull off the tough fiscal agenda.

Brazil's benchmark Bovespa stock index .BVSP rose 3.7 percent on Tuesday, boosted by strong corporate earnings and the resolve shown by Guedes on pension reform.

Yet the University of Chicago-trained economist, who is getting his first taste of public service, met with scepticism from more seasoned politicians.

Rodrigo Maia, the speaker of the lower house of Congress, said on Tuesday that reform is urgent, but cautioned that the conditions to pass it were still far off.

Major Olimpio, a lawmaker from Bolsonaro’s own party who helped run his campaign, agreed the political climate was not ready for reform.

Even Bolsonaro’s future chief of staff, Onyx Lorenzoni, said in a Monday radio interview that he only expects to introduce a reform plan next year.

After a meeting with Lorenzoni, Guedes said the decision on timing was ultimately a political one that the chief of staff would weigh.

“We can’t go from a victory at the ballot box to chaos in Congress,” Guedes told journalists.

On other issues, Guedes made clear he was the final word on economic matters, laying out plans to give the central bank more institutional independence and clarifying comments made by Lorenzoni about exchange-rate policy.

“You are all scared because he is a politician talking about the economy. That’s like me talking about politics. It’s not going to work,” Guedes said.

Jair Bolsonaro, far-right lawmaker and presidential candidate of the Social Liberal Party (PSL), gestures during a runoff election, in Rio de Janeiro, Brazil October 28, 2018. REUTERS/Pilar Olivares

HOT BUTTON ISSUES

While advisers work out the details of his economic programme, Bolsonaro revisited some of his most contentious campaign promises on Monday night: looser gun laws, a ban on government advertising for media that “lie,” and urging a high-profile judge to join his government.

In interviews with TV stations and on social media, Bolsonaro, a 63-year-old former Army captain who won 55 percent of Sunday’s vote after running on a law-and-order platform, made clear he would push through his conservative agenda.

Bolsonaro said he wants Sergio Moro, the judge who has overseen the sprawling “Car Wash” corruption trials and convicted former President Luiz Inacio Lula da Silva of graft, to serve as his justice minister.

Barring that, he said he would nominate Moro to the Supreme Court. The next vacancy on the court is expected in 2020.

Bolsonaro had not formally invited Moro as of Tuesday afternoon, and the judge remained noncommittal on the proposal.

“In case I’m indeed offered a post, it will be subject to a balanced discussion and reflection,” Moro said in a statement.

MEDIA SHOWDOWN

Late on Monday, Bolsonaro said in an interview with Globo TV that he would cut government advertising funds that flow to any “lying” media outlets.

During his campaign, the right-winger imitated U.S. President Donald Trump’s strategy of aggressively confronting the media, taking aim at Globo TV and Brazil’s biggest newspaper, the Folha de S.Paulo.

“I am totally in favour of freedom of the press,” Bolsonaro told Globo TV. “But if it’s up to me, press that shamelessly lies will not have any government support.”

Bolsonaro was referring to the hundreds of millions of reais the Brazilian government spends in advertising each year in local media outlets, mainly for promotions of state-run firms.

The UOL news portal, owned by the Grupo Folha, which also controls the Folha de S.Paulo newspaper, used Brazil’s freedom of information act as the basis for a 2015 article that showed Globo received 565 million reais in federal government spending in 2014. Folha got 14.6 million reais that year.

Globo said on Tuesday that federal government advertising represented less than 4 percent of the revenue for its flagship channel, TV Globo, without providing more detailed figures.

Grupo Folha did not reply to requests for comment.

Reporting by Rodrigo Viga Gaier and Brad Brooks; Writing by Marcelo Rochabrun; Editing by Larry King and Leslie Adler

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below