Brazil’s Bolsonaro Dials It Back in Davos

Brazil’s Bolsonaro Dials It Back in Davos

24/01/2019 15:00 - The “tropical Trump” serves up economic reform, not populist clickbait.

Sugarloaf met Magic Mountain this week in Davos, when Brazil’s new President Jair Bolsonaro took the podium at the World Economic Forum. Yet those looking for a sharp clash between a man described in the international press as a “tropical Trump” and the elite globalists breathing rarefied Alpine air went away disappointed.

To be sure, Bolsonaro and some of his senior officials have made more than their share of controversial statements — with his Minister of Women, Family and Human Rights commenting that “boys dress in blue, girls in pink,” and Bolsonaro himself saying that “Marxist trash” would be purged from school curricula.

But Bolsonaro’s short, sober remarks at Davos countered the clickbait stories that have obscured his important message of reform and renewal. He stressed that a good part of his administration consists of technocratic rather than political appointees — notably Paulo Guedes, the former economist/banker/fund manager turned economy minister, and Sergio Moro, the tough anti-corruption judge turned justice minister. Less known is that, in contrast to other administrations, these technocratic appointments extend to lower levels — Paulo Guedes’s privatization czar, for instance, is a successful entrepreneur who founded the Brazilian car-rental giant Localiza.

Equally important was Bolsonaro’s commitment to simplify taxes. According to the World Bank, Brazilian companies spend an average of 1,958 hours annually on complying with taxes; that’s more than 10  times the average in countries belonging to the Organization for Economic Cooperation and Development. The smaller companies and startups most affected by that burden will also be happy that Bolsonaro repeated his objective of “simplifying entrepreneurship.” Currently, opening a company can take more than 100 days — and starting a company just represents the beginning of an endless fight against an obdurate and labyrinthine bureaucracy. Privatizations, respecting contracts, opening up Brazil’s still fairly closed economy, investing in security, and balancing economic growth while protecting biodiversity rounded out the president’s stated commitments. One ambitious metric worth noting: Bolsonaro wants Brazil to become one of the 50 easiest countries in which to do business; at the moment, it doesn’t even rank among the top 100 in the world.

Most of the Brazilians I met in Davos thought the speech hit the right notes, despite its brevity. A few were disappointed that Brazil did not secure a house on the town’s Promenade, where you could find Indonesia, Poland, Russia, South Africa and others. One forum delegate told me that Bolsonaro could have spent more time with high-profile CEOs rather than seeming to delegate that role almost entirely to Guedes.

Yet for some Brazilians, at least, Bolsonaro’s most important message on Tuesday may not have been his speech but a simple action: In photos and footage published on Twitter and YouTube (and picked up by Brazilian media), he was seen lunching, by himself, in a budget-priced supermarket restaurant close to the conference center. For a country where trust in politicians is very low — politicians in Brazil are commonly disparaged as all “farinha do mesmo saco” (literally, flour from the same bag) — such example-setting was not a bad move.

Of course, theatrics have their limits. While Bolsonaro’s restrained demeanor and focus on economic challenges may help correct a sensationalist media narrative, he missed a valuable opportunity to provide more details of his plans and commitments to investors and voters alike. Some gentle post-speech prodding by Klaus Schwab, the forum’s founder, produced few specifics.

His government’s tangible steps to fulfill his stated objectives, including the urgent issue of pension reform, are what deserve the media’s attention and public scrutiny going forward. If Bolsonaro delivers on those promises, Brazil will deserve to secure a swanky house on the Promenade at Davos 2020.