Social Policy since Rousseff: Misrepresentation and Marginalization

An Overview of Social Indicators on the Crisis

After the sharpest recession ever experienced by the Brazilian economy, with a negative real product growth of 7.2 percent in 2015–2016 and a slight recovery in 2017 and 2018 when annual GDP (backed once again by agribusiness performance) increased by 1.1 percent (IBGE, 2018), many social indicators collapsed.

Extreme poverty returned to levels prevailing at the beginning of the millennium, prior to the creation of the Bolsa Família program. By the end of 2018 there were around 15 million people, 7.5 percent of the population, living in extreme poverty, a similar percentage as in 2004 (IPEA, 2018) and double that observed in 2014. Poverty now decimates the daily life of more than 24 million people.

The World Bank poverty cut-off line adopted in 2017 for middle-income countries corresponds to US$ 5.5 PPP/day, ⁷ more than double the poverty line considered by Bolsa Familia. According to this metrics, 55 million Brazilians (IBGE, 2017), or a quarter of the population, have fallen below the poverty line. The picture is dramatic, since nearly half of all Brazilian children under 14, according to this same indicator, are poor.

Different estimates of the percentage of poor and indigent in Brazil reveal profound imbalances regarding the degrees of destitution. This means that our view of poverty reinforces patterns of inequality that we get accustomed to encountering. Moreover, it still serves all sorts of assessments, from the most rigorous to the most lenient ones, when it comes to measuring the real drop in poverty rates and the success of the welfare programs implemented. The most appropriate poverty threshold, due to being associated with the average standard of living of the Brazilian population, is the one that adopts the metric of 50 percent below the median income, which increases to 30.1 percent the number of people living in poverty. Using common sense, it can be said that the magnitude of poverty is high in Brazil starting at the crisis, as it affects between 10 percent and 30 percent of Brazilians, or somewhere between 20 and 60 million people depending on the cut-off criterion chosen.

The corollary of this situation is the inflection in the trajectory of indicators that had shown constant improvement since the mid-1990s and were cause for celebration.

Unemployment remained above 12 percent (corresponding to approximately 13 million people) in the last quarter of 2018, well above all annual averages compiled since 1991 (IPEA, 2018). Half of the unemployed are young (16–29), and the number of individuals neither studying nor working in this age-group has continued to rise and now exceeds 11 million (one in five).

Together, the unemployment and underemployment rates reached 18.6 percent, revealing the damaging and predictable consequences of the Temer-era labor reforms, a major promoter of job insecurity and a brake on wage recovery. Therefore, the Gini index ⁸ resumed an upward trend, albeit at a slow pace. A recent study by Daniel Duque (O Estado de S. Paulo, February 22, 2018) on the evolution of the Gini index as measured by per capita household income revealed that it reached 0.62 by the end of 2018, its highest level since the first quarter of 2012, when the Continuous National Household Sample series started. In other words, Brazil has returned to a level of inequality that prevailed in times of economic miracle under an authoritarian regime, when growth was brought about by strengthening the concentration of income. But now Brazilians have more inequality with no prosperity.

The recession, which led to an abrupt shrinkage of the labor market, had immediate effects on inequality, which in those years of relative prosperity, because of the ineffectiveness of tax policy, had never decreased as expected. Having registered a modest drop in its inequality ranking during the commodity boom, Brazil saw its relative position deteriorate again, becoming, by the end of 2018, the ninth-most-unequal country on the planet and the first one in Latin America.

Surprisingly, the income estimates of the National Household Sample Survey show that between 2015 and 2017 there was no decline in average monthly labor income in constant values (IBGE, 2017). Actually, there was a slight increase, to R$2,247 from R$2,197, which is a paradox considering the high level of unemployment. It is plausible to suppose, therefore, that the sharp increase in poverty and indigence rates is correlated with the complete exclusion from the labor market of most of the working-age population, most likely the groups favored in the recent growth phase (2003–2014) by the expansion of formal employment in the range of up to two minimum wages (Lavinas, 2017). This corresponded to 82 percent of the balance of formal job creation in the period (Lavinas, Cordilha, and Cruz, 2016). This means that the increase in real income, in a situation characterized by such high levels of unemployment, informality, and precarious employment, may be conveying that windows of opportunity have been closed to those with low skills and little experience at the bottom of the occupational pyramid.

It is a fact that employment and income indicators are the most sensitive to a serious and resilient economic crisis. But what do education indicators that capture longer-term outcomes display regarding the learning capacity of Brazilian youth over time? According to the Basic Education Assessment System (SAEB), only 1.6 percent of young people enrolled in the last grade of high school in 2017 showed adequate performance in Portuguese (in mathematics the percentage rose to 4.5 percent). In addition, no state reached the Basic Education Development Index (IDEB) target of 4.7 expected for high school; the index went from 3.7 in 2015 to 3.8 in 2017 (INEP, 2017). As if the poor performance were not enough, it should be stressed that, in 2017, according to the IBGE, 1.5 million young people aged 15–17 have dropped out of school.

Finally, data from the Ministry of Health indicate that for the first time since 1990 the infant mortality rate reversed its downward trend. There were 14 deaths per 1,000 live births in 2016, an increase of 4.8 percent over 2015. Data from the Food and Nutrition Surveillance System compiled by the Abrinq Foundation reveal that from 2016 to 2017 the percentage of malnourished children under 5 years increased from 12.6 percent to 13.1 percent. ⁹ At the same time, Brazil plummeted 17 positions in the United Nations Development Program’s Human Development Index ranking (Valor Económico, September 18, 2018).

This demeaning scenario of drastically reduced future opportunities and even life expectancy for new generations is a direct consequence of austerity policies that did not spare social programs by the end of the second Dilma administration.

Macroeconomics Constraining Social Policy: The Dilma Rousseff Administration

It is no simple task to identify the social and political forces that aligned to promote the dismantling of the so-called social-developmentalist project during the second mandate of President Dilma Rousseff. However, over a period of five years (2011–2015), various factors cemented a distance between the PT government and its traditional political support base. At the same time, an elite union center was invigorated and reorganized to oppose the PT government. The conservative macroeconomic regime inherited from the Fernando Henrique Cardoso government (1999–2002), shaped by floating exchange rates, strict inflation targets, contractionary fiscal targets, and a strongly regressive tax system, was assumed one more time by President Dilma Rousseff as a condition for governability.

This wide party coalition demanded that these orthodox pillars remain untouched to achieve “peaceful coexistence” in the Congress. The novelty of the alliance lay in the alleged reconciliation of this strategy with broader low-cost welfare policies, maintaining the logic of targeting and conditionalities, in line with the neoliberal precepts of multilateral organizations. The fight against poverty prevailed over the consolidation of a sustainable and effective social protection system. The Rousseff administration, instead of reversing this path, unveiled a phase that deepened the conservative dimension of both economic and social policy.

In fact, the economic policy of the Rousseff administration was popularly known as the “New Macroeconomic Matrix.” It was intended to replace the mass-consumption-based-growth model exhausted after 2010 ¹⁰ with a new growth engine based on private investment and exports (Carvalho, 2018; Serrano and Summa, 2014). Lower interest rates and depreciated nominal exchange rates were priorities. Fiscal policy would be amended to amplify tax exemptions and cut spending (including social spending but especially public investment), thus offsetting the price increase produced by the devaluation of the real and lower interest rates. ¹¹ Macroprudential credit restraint measures were also devised to discourage consumption, but, albeit more slowly, credit continued with its upward trend.

The strategy of Dilma’s government encompassed stimulus to private investment through extensive privatization of the infrastructure sector, lower energy rates, fuel price controls, and boosts to oil and gas sector development, but it failed. The “New Matrix” managed to accelerate temporarily the pace of economic growth from the third quarter of 2012 to the first quarter of 2014 at an annualized growth rate of over 2.5 percent, but thereafter it collapsed (Oreiro, 2017). It would be a mistake to consider this simply bad economic policy. For the purposes of this chapter, only the data, events, and mechanisms linked to social policy are highlighted.

From the point of view of fiscal policy, two factors produced ambiguous effects in the social arena, thus contributing to Dilma’s government subsequent political ruin: (1) the allocation of public spending, which focused on two pillars, monetary transfers to households (via pension and welfare benefits) and financial expenses, and (2) the expenditure-financing structure, which involved the strongly regressive profile of the tax burden and the rapid growth of public debt starting in 2013, along with a steady increase in household indebtedness. These features were more important than the level of social spending itself in slowing GDP growth, the ineffectiveness of income distribution, the fight against poverty, and the loss of decisive support for coping with political adversity.

With regard to the surge of social spending at the federal level, ¹² there was a slight expansion as a percentage of GDP in the health, education, and social assistance sectors between 2011 and 2015. However, this positive result was partly misleading because it stems from the deceleration of the GDP growth ¹³ in the same period (Table 1). The table also indicates that there were declining annual rates from 2011 until reaching negative rates in 2015. This is a clear demonstration that social policy in the Dilma Rousseff period was abandoned instead of gaining new momentum, acting countercyclically to rekindle consumption and preserve government legitimacy based on its traditional political support foundation.

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Table 1

Settled Federal Social Expenditures, Annual Real Growth Rate at 2017 Prices (%) and % of GDP

Year	Social Security		Pension Plan a		Health		Education
	%	% of GDP	%	% of GDP	%	% of GDP	%	% of GDP
2003	5.2	0.5	−3.8	8.5	−3.0	1.6	−2.4	0.8
2004	50.6	0.7	4.0	8.4	10.9	1.7	−6.6	0.7
2005	7.6	0.7	7.5	8.7	4.4	1.7	5.1	0.7
2006	34.0	0.9	10.8	8.8	7.1	1.6	5.3	0.7
2007	8.8	0.9	4.4	8.6	−5.6	1.5	3.7	0.7
2008	4.5	0.9	−0.9	8.3	−0.5	1.4	4.3	0.7
2009	13.5	1.0	10.7	8.7	9.6	1.5	27.5	0.9
2010	11.0	1.0	6.4	8.4	6.1	1.4	27.5	1.0
2011	7.3	1.0	1.7	8.2	5.9	1.4	4.6	1.0
2012	15.1	1.2	4.3	8.5	5.3	1.5	13.1	1.1
2013	6.1	1.2	4.8	8.6	1.6	1.5	13.0	1.2
2014	4.1	1.2	5.5	8.9	6.6	1.5	10.4	1.3
2015	− 8.5	1.2	−5.9	9.1	−2.2	1.6	−3.2	1.4
2016	5.5	1.2	6.1	9.2	0.6	1.6	1.7	1.4
2017	5.3	0.3	9.9	10.0	0.0	1.6	1.7	1.4

Source: Ministry of Economy (2017), SIAFI-STN/CCONT/GEINC, own elaboration.

a.

Includes RGPS (PAYG general scheme) and RPPS (civil servants’ PAYG scheme) expenses.

Importantly, cash transfers accounted for half of federal government primary spending. Gobetti and Orair (2017) concluded that the average annual growth rate of social spending on transfers alone ¹⁴ for the Cardoso government was 7.5 percent per year. In both Lula governments, the rates were higher, reaching 8.7 percent per year, while in the Dilma period (2011–2014) the rate was 5.8 percent per year. In 2015, when a very strong fiscal adjustment took place, social spending fell to −0.7 percent per year. There is no doubt that social policy suffered a sharp contraction of resources.

It must be recognized, however, that reducing poverty and income inequality depends only partially on the level of social spending. An important part of this process relies on the structure of tax expenditures (Barr, 2004), which contributes to broadening or restricting the redistributive effects of social policy. Another part is conditioned by the macroeconomic environment in which social policies are implemented. Thus, for the period analyzed, the redistributive effects of social spending responded to two major constraints. First, the design of means-test targeted programs, which excluded a large number of potential beneficiaries, and, second, the recessionary economic environment that resulted from the more conservative macroeconomic policy and the decline of commodity prices. Therefore, although social spending was selectively preserved (especially social insurance spending, to the detriment of health care and education, for instance), there were considerable limits to its compensatory effects.

Table 1 confirms the relative stagnation of federal spending as a percentage of GDP in health, education and social assistance as of 2014. In the 2003–2017 period, there was a significant increase in welfare benefits spending, a rise in federal spending on education, and more modest growth in pensions, and health care maintained its stagnant participation as a percentage of GDP over those 14 years.

Productive Structure and Social Policy

The interests of financial capital (expressed in public debt interest expenses and the rampant growth of debt) imposed a well-defined social policy, one in which money transfers predominated over the provision of decommodified public services (especially health, housing, transportation, and education). The latter are more costly and inhibit the expansion of private capital into highly profitable sectors.

The expansion of different modalities of income transfers to families allowed, as noted earlier, the incorporation of the poorer population in the mass consumption market, a target of the Lula-Dilma governments’ legitimation strategy. However, the rampant shortage of essential public services forced the purchase of private services and drove families into the credit and insurance markets, squeezing income from wages and social benefits, leading to mounting indebtedness, and shifting workers’ income to the financial sector, fueling interest-bearing capital. The combination of deficits in the public provision of decommodified goods and services along with insufficient benefits and wages led to turn income transfers—the bulk of social policy—into collateral to access the financial market (Lavinas, 2018), which became the ultimate provider of well-being.

Inclusion in the labor market, although undisputed until 2014, was insufficient to hinder the growing share of family income devoted to debt repayments to the financial sector or capable of significantly augmenting the wage share in GDP. Total wages went from 38.9 percent of GDP in 2002 to 43.1 percent in 2013 (IBGE, 2013). Credit went from approximately 21 percent to 54 percent of GDP in that same period.

A second key factor in explaining the intensification of struggles for redistribution derived from the combination of an upward trend in labor incomes with only modest improvements in productivity levels. The average variation of productivity remained around 1 percent per year between 2001 and 2013, even though it was significant in the agricultural sector (growing at 4.9 percent per year) alone, once again driven by the commodity boom (Table 2). Saramago (2016) shows that real wages grew at an average rate of 3.5 percent per year in the 2009–2013 period while real productivity set the pace at 1.4 percent per year in the same period.

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Table 2

Variation in Real Labor Productivity (% per year), 2001–2013

	2001–2004	2004–2009	2009–2013	Total
Total	0.0	0.8	1.9	1.0
Farming	2.2	4.6	7.2	4.9
Mining	0.7	1.7	−2.9	−0.1
Manufacturing	−0.8	−2.0	0.4	−0.9
Construction	0.4	−0.7	2.1	0.5
Trade	−1.3	1.4	0.7	0.5
Services	−0.5	0.8	3.1	1.2

Source: Saramago (2016: 80).

Given the arrangement supported by high interest rates and thus a powerful stimulus to nonproductive activities, companies and government did not prioritize technological innovation, expansion of labor productivity, or improvement of the educational level and technical skills of the workforce, which would have entailed long-term investment. There was therefore no pressure on the business sector—which depended on the state for its financial income—to allocate capital to productive accumulation, with potential impacts on productivity growth. This deepened the conflict for redistribution by creating a fierce dispute between social spending and financial spending within the public budget. The scenario ended up characterized by unsustainability and a permanent contradiction between rent-seeking activities and low labor productivity, on the one hand, and universal public provision, on the other.

The state was thus all the more incapable of sustaining growth and well-being. With the end of the commodity boom and the slowdown of the world economy from 2012 on, this contradiction exploded.

A third factor was the heavy tax exemptions that marked President Rousseff’s mandates. The labor market showed great dynamism between 2011 and 2014, maintaining significant levels of formal employment, which helped foster revenues linked to social protection policies (income from pensions and the social security system as a whole). But devastating tax cuts undermined the social security budget, reflecting attempts to rebuild the profit margins damaged by wage increases well above productivity and the appreciated exchange rate that intensified competition with imported goods.

Table 3 shows the steady growth in real values of income waivers and their equivalent as a proportion of GDP, globally but also referring exclusively to the social security budget. Between 2007 and 2016 (year of the impeachment), the value of tax exemptions increased and remained above 4 percent of GDP throughout most of Dilma’s administration, with more than half being withdrawn from the social security budget.

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Table 3

Tax Exemptions in Current R$ millions and % of GDP, 2007–2017

Year	Total Exemptions	% of GDP	Social Contribution Exemptions
			Contribution to Pension Funds	COFINS	CSLL	PIS/PASEP	Total Social Security Exemptions	% of GDP
2007	102,673	3.95	n. a.	13,351	2,958	2,377	18,686	0.81
2008	114,755	3.78	n. a.	20,058	4,525	3,732	28,315	1.03
2009	116,098	3.65	17,905	29,418	6,087	5,651	59,061	1.85
2010	113,861	3.60	18,183	33,883	8,333	6,955	67,354	2.02
2011	152,406	3.68	21,156	34,618	5,830	6,542	68,146	1.75
2012	182,410	4.15	24,412	41,376	6,976	8,145	80,909	1.78
2013	225,630	4.66	33,743	46,142	8,788	9,060	97,733	1.97
2014	253,902	4.92	57,012	58,510	9,301	11,639	136,462	2.60
2015	282,437	4.93	62,519	70,538	10,490	14,100	157,647	2.75
2016	271,006	4.33	54,349	64,558	11,171	12,887	142,965	2.29
2017	284,846	4.19	62,493	64,023	11,792	12,720	151,028	2.22

Source: Ministry of Economy (2007–), Internal Revenue Service, Proposal for the Annual Budget Law, projections, and Real Bases Report, own elaboration.

Note: Data from 2015 to 2017 are estimates. COFINS, Contributions for the Financing of Social Security; CSLL, Social Contributions on Net Corporate Profits; PIS/PASEP, Program of Social Integration/Program for Public Servants’ Endowment.

The mismatch between revenues and expenditures of the social security system strengthened those who were calling for reforms in order to curb social rights. Dilma’s government gave in to conservative appeals from its coalition in Congress, inevitably creating friction with its support base of unions, social organizations, and middle-income segments. Social policy narrowed as rentism advanced with the use of budget resources at the same pace as interest rate climbed. ¹⁵ These exclusionary dynamics were already visible in the 2013 June protests but were underestimated by the PT government, which would realize the existing impasse only when it lacked the support of protesters during President Dilma’s impeachment process.

Examination of the income tax statements filed with the Internal Revenue Service reveals the social setting that was taking form. Medeiros, Souza, and Castro (2015) and Morgan (2017) demonstrated that the reduction of income inequality under the PT rule was not as might be imagined by reviewing only household survey data that essentially registered labor income, pensions, and welfare transfers. Their analysis showed no fall in the income share of the richest 1 percent in the 2000s, and, although wages at the bottom of the pyramid augmented their participation, capital income increased much more and remained highly concentrated among the wealthiest individuals. ¹⁶ The financial elite had no reason to complain. Additionally, there were many reasons for dissatisfaction in middle-income segments, for they experienced a severe deterioration of their standard of living as the cost of essential basic services such as education and health rose many times above average inflation (Lavinas, 2017).

In a period of falling profits for companies in the productive sector, soaring income from financial and real estate assets was responsible for the resilience of inequality. Examining the evolution of the return on equity rate of Brazilian publicly traded nonfinancial companies and the largest nonfinancial private companies, Rocca (2015, cited in Oreiro, 2017) reported a trend toward reduction from 2011 on, reaching 4.3 percent per year in 2014, lower than the observed inflation and therefore negative in real terms. Oreiro (2017) points out that the main factor in declining return rates was the drop in the profit margins of nonfinancial corporations, especially industry. At the same time, the stock of nonmonetary financial assets increased at an average annual rate of 7.9 percent between 2011 and 2014 (Lavinas, Araújo, and Bruno, 2019), showing that financialization had invaded the logic of the private sector, rescuing the losses of nonfinancial corporations.

The Temer Government: Radicalizing Neoliberal Policies (2016–2018)

From May 2016, with the removal of Dilma Rousseff, the federal government turned out to be controlled by the most profound conservatism in macroeconomic policy, which meant major changes in the management of social policy as well.

Immediately after his inauguration, President Michel Temer implemented an administrative reform of the ministries, removing the Ministry of Social Security, whose main responsibilities were transferred to the Ministry of Social Development and the Ministry of Finance. The Special Secretariat of Women was also terminated, and the Ministry of Science and Technology was incorporated into Communication, reducing its strategic importance and relevance to the country’s development, both social and technological. These initiatives unfolded the rebuilding of the new government’s political base, hand in hand with the postimpeachment Congress. In so doing, they turned away from the most vulnerable social groups that, under the PT rule, had gained political visibility.

In a short time, a sequence of attacks on social rights took place. In December 2016, a constitutional amendment (95/2016) capped federal expenditures for 20 years, limiting the real growth of primary spending while leaving financial spending intact. Until then the government was required to allocate to health at least the amount spent in the previous year plus the GDP growth rate, and states and municipalities had to invest 12 percent and 15 percent, respectively, of their net tax revenue. Whereas the 2014–2024 National Education Plan had anticipated raising spending to 10 percent of GDP (from an average of 5 percent), under the new tax regime federal agencies were freed from the constitutional obligation to guarantee minimum percentages of their fiscal revenues for health and education. Thus the goals of the 2014–2024 education plan became worthless pieces of paper, aggravating the chronic underfunding faced by SUS and public universities over the years.

A new blow to social rights came with the Outsourcing Law (Law 13,429 of March 31, 2017), which dealt with temporary work and companies providing services to third parties. Now companies can outsource all activities—including their end activities. The measure deepens the precarious nature of work: wages tend to decrease (according to the DIEESE [2018] 30 percent lower than with direct hiring) and unions have been weakened (outsourcers are represented by different categories, demobilizing the strongest unions that had negotiated higher minimum wages).

Continuing the dismantling of Brazilian worker protection legislation, the Temer administration also implemented the Labor Reform that annulled constitutional rights that society had imagined almost impossible to be overruled. The main losses are as follows: the possibility of salary reduction by collective dismissal and rehiring through outsourcing or individual agreements; the prevalence of individual agreements over labor legislation; the division of holidays into up to three periods according to company preference; regulation of telecommuting by task rather than by work schedule; travel time to work no longer being considered time worked; work hours of up to 12 hours per 36 hours of rest; and the termination of equal pay for equal work in the same company.

The Congress, run by a majority whose many members are investigated on charges of corruption, money laundering, gangsterism, obstruction of justice, and other political crimes, approved the disruption of labor and worker protection. In the face of a demobilized and discouraged society, the democratic advances protected by the 1988 Constitution were demolished without resistance.

Pension reform was left out. Nevertheless, on the revenue side, the Temer government implemented a providential dismantling, granting favors to companies with debt in installments and relief of fines and interest to tax evaders through the Fiscal Recovery Program. States and municipalities as well as big individual and corporate farmers did also benefit from debt relief. More than healthy finances, what was sought with the fiscal adjustment achieved through the loss of social rights was to make room for the advancement of private medicine and education and private pension funds—in other words, the defense of the interests of large banks and investment funds.

Major cuts in social programs were adding up. The My House, My Life program suffered a 53 percent reduction in its budget in the first six months of 2017, reaching only R$1.4 billion compared with R$2.99 billion for the same period in 2016. The Instituto Brasileiro de Geografía e Estatística estimated the housing deficit at over 7 million homes. Between June and July 2017, about 543,000 Bolsa Família beneficiary families were removed from the program. Added to this list of exclusionary measures was the end of the Popular Pharmacy program, which had provided medicine for some 9 million people with chronic diseases.

President Temer was not only attacking social rights. His intervention was also fostering denationalization and deindustrialization. In the field of monetary policy, despite successive drops of the SELIC (the basic interest rate), banks and nonfinancial corporations continued to enjoy extremely high real interest rates (DIEESE, 2018). Despite a totally adverse scenario, banks were able to expand their assets and profits, breaking records every quarter. They continued to invest in public securities and in the transfer of customer operations to virtual channels at very low cost to institutions, reducing, by the same token, their physical and functional service structures. But their biggest source of profit came from the expansion of credit, reinforcing the logic of interest-bearing capital.

Conclusion

In 2018, the ballot boxes showed that the Brazil of the first two decades of the new millennium no longer existed. A candidate without a clear program of government won the presidential election. Averse to discussing ideas, he presented himself as ultraconservative in his social customs and values and ultraliberal in economic policy. He promised to take the dismantling of the state further, to the point of envisioning to privatizing public security by making citizens’ physical protection the responsibility of individuals and families rather than the monopoly and inherent attribute of a modern state. To this end, he proposed to allow the free possession and carrying of weapons. He emphasized that labor market deregulation must be deepened by creating a new green-and-yellow work card that does not link worker status to rights.

Reforming social security, particularly pensions, was one of his favorite topics for making people believe that the “fight against privilege” was his motto and line of action. The pay as you go public system was to be sacrificed to balance public accounts, without any mention of tackling the acute deindustrialization that is mortgaging the country’s future and condemning Brazilians to live with a manufacturing sector with the lowest share of GDP since 1947 (11.3 percent by the end of 2018).

His approach to the “ruralist bench” (the agribusiness lobby), which was fundamental to his victory in the presidential elections, indicated that the Brazilian economy would once again focus on commodities, strengthening the old extractivist model with high costs either through the total liberalization of the use of pesticides and mining or by challenging the environmental reserves, particularly those managed by indigenous communities. These measures will be bring about a rise of environmental crime—more murders of environmental leaders and repression of those who defend opportunities and incentives for family organic agriculture, a mechanism for the deconcentration of land and wealth. The liberalization of gun ownership in rural areas will be complete, bringing the risk of legitimate executions.

Without an ambitious and competent project for stimulating long-term growth with innovation and redistribution of income and wealth (aspects missing from the presidential candidate’s platform in 2019), government action continues to focus on promoting additional cuts in public spending through the deconstitutionalization of rights and the dismantling of institutions. Such a dismantling will have the effect of offering devastated land to the market, which can then reshape the country in terms of its own interests without anchors or foundation.

It is premature to say what will happen to social policy as a whole. Prevention in the fight against poverty, food insecurity, and violence and in favor of universal and free health care and education and good housing provision will very likely continue to lose budget shares as public policies tend to be disconnected from their preventive dimension. The logic of privatization is reinforced, leading to increasing shrinkage of the public sector. The financial players—pension funds, private equity funds, and investment funds—that already dominate these sectors will certainly benefit and be strengthened by mergers and acquisitions trends, sharpening the denationalization of the very profitable services sector. This means that the old Brazilian structural heterogeneity will persist, generating more inequality and exclusion.