The global community’s turn towards populism lurched a little further last week when Jair Bolsanaro was sworn in as president of Brazil. The South American giant dominates the continent’s economy, and is the fifth-largest country in the world — both in terms of population and area. Further, it has long been a steadfast bastion of social democracy; under “Lula” Luiz Inacio da Silva, who left office five years ago with near 90 per cent popularity, it seemed to promise a new model of development for Latin America, one that blended democracy, social progress and inclusive growth. But Mr Bolsanaro’s rise reflects the flaws in the model — among others, that it depended too much on high commodity prices, leading to both corrupt dealing and profits, which could be redistributed to voters, and costs in Brazil remained too high to render the country’s economy properly competitive.
Mr Bolsanaro has begun his term by showing his determination to follow through on the promises that he made to dismantle Brazil’s existing system. Economically, he has promised to reform the country’s creaking and expensive pensions architecture and shrink the federal budget by 30 per cent. Investors have reacted with enthusiasm to this, which has been backed up by his appointment of Paulo Guedes, a right-leaning economist from the University of Chicago, as his finance minister. But the problem is that Mr Bolsanaro’s agenda does not end there. In fact, like many populists who have come to power in the last five or six years while promising economic reform, it is the rest of his programme that appears more likely to be implemented — and is more dangerous both for his country and the world. His response to urban violence, for example, has been to relax Brazil’s regulations on gun ownership and control. He has shut down the ministry of labour and the department within the education ministry that drove diversity. His rhetoric and that of his followers have been explicitly anti-minority. The implications for Brazil’s social cohesion are considerable.
For Brazil’s partners around the world, India among them, there is much now to be wary of. For one, Mr Bolsanaro has promised to essentially disempower Brazil’s tribes and transfer Amazon rainforest to farming. One of the few successes on the climate change front in recent years has been partially controlling deforestation; this is likely now to be threatened. The implications for agri-business globally, for example in India’s soybeans sector, are worrying. India will also be overtaken now as the primary exporter of bovine meat — aided by problematic domestic policy in this regard. A regressive social agenda will make co-operation on governance in BRICS more difficult, throwing India and South Africa into a minority in terms of inclusive and progressive policy orientations. BRICS itself will matter even less, given that Mr Bolsanaro has signalled that he intends to abandon the “south-south” locus of development policy that his predecessors favoured. Support from Brazil in international fora, for example for India’s stand on food security, will be less likely now. Given all these constraints, however, it remains important for India to engage the new administration swiftly. Even populists who start with a bang may still be influenced by world opinion as time goes by.
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