Squid get back on the Brazil, exactly 20 years after the first time. The president, in his third term, takes office on January 1, at the age of 77: he is once again leading one of the top 12 economies in the world (already among the top 8 by GDP), with several crucial challenges to face. The Brazil comes apart from the experience Bolsonaro, above all from the point of view of international relations: already in November, as president-elect but not yet in office, Luis Inacio Lula da Silva, this is his full name, was the protagonist at the COP27 in Sharm el-Sheikh, welcomed almost like a star by the assembly. The message launched was clear: the themes of climate and Amazon they will be at the center of the agenda, after his predecessor had largely sacrificed them, isolating the country from the international debate.
Lula and Biden: the next meeting a Washington
Also for this reason, but not only, one of the first trips planned by Squid in January it is at Washington, where will he find Joe Biden to talk about the environment but also about migration policies. The meeting is highly anticipated, between two presidents who are no longer very young but whose handshake will close the season of the Trump-Bolsonaro partnership. Twenty years ago the first trip abroad of Squid it was the inauguration of the Ecuadorian president Gutierrez, but today the former president-trade unionist has another status.
Lula in third term in Brazil: the economy and the fight against poverty in the foreground
Uno status which allows him, for example, to face the other great challenge, that ofeconomy, with the favor of predictions. There Sao Paulo Stock Exchange in 2022 it is essentially breaking even compared to a year ago, but it is precisely in the weeks leading up to the election of Squid, when the markets rode the polls that gave him the favorite, who experienced his best moment, touching 120.000 points. After that theBovespa index it again gave up something, closing the year just above 100.000. The reason that cooled the markets is that Lula immediately stated that the priority is the fight against hunger (according to the FAO Map, the percentage of population is suffers hunger has risen by more than 4% in 2021, growing more than the global average and reaching 15 million people), implying that it will not hesitate to increase public spending to finance and indeed strengthen the aid program Auxilio Brasil, which will once again be called Bolsa Familia. In the latest assumption of the 2023 budget, Bolsonaro he had cut the subsidy from 600 to 400 reais, an unthinkable figure given the inflation (400 reais is less than 100 euros). Guarantee i Real 600 monthly, as the new president wants to do, costs 52 billion reais, almost 20% of the total value of the maneuver.
Lula, Bovespa and the expectations of finance
Precisely for this reason the markets rejoiced, just before Christmas, when Squid he got this expenditure item out of the deficit. But the financial community had already expressed positive expectations for the 2023, betting on an index return Ibovespa over 130.000 points within the calendar year. Above all, the large institutional investors keep an eye on the Brazilian stock market, starting with the USA: the most optimistic is Bank of America, which provides a Bovespa index at 135.000 points this year, along the same lines as Jp Morgan, while the analyzes of local investors, such as Banco Inter and Genial Investimentos, are more cautious. The Brazilian market's exposure to foreign funds grew significantly in 2022, with a positive balance of 110 billion reais, equal to more than 20 billion euros. The most optimistic analyzes focus heavily on a consistent one reduction of the Selic tax, the tax on financial income introduced in Brazil in 1978 to contain hyperinflation and which today is worth 13,75%, applied to Treasury securities, savings accounts and fixed-yield investments. BofA expects this tax to drop by more than 3 percentage points around 10%, which would mean lower interest rates, greater access to credit but also an increase in inflation.
Lula in third term: stop the privatizations of Bolsonaro
In the viewfinder of global market there is not only the finance, but also the industrial policy of the Brazil. Bolsonaro had started a series of huge privatizations, often to the advantage of large Chinese groups (as already written on FIRST online). These operations, some in very strategic sectors, would have lightened the public finances from debt burdens, possible recapitalizations and employee remuneration, which according to the 2021 budget alone weighs 21 billion reais (about 4 billion euros) .
Lula has already hinted that everything will be stopped or at least reevaluated, especially the two biggest operations: the privatization of Post (Correios) and del Port of Santos, the largest commercial outlet in the country, for which Bolsonaro had launched an auction for 30 billion reais of investments. Giving up this money could be for Lula not only a problem of public finances but also of international relations: Brazil in 2021 was the country in the world that benefited the most from investment from China, nearly $6 billion to acquire companies or finance projects in everything from oil to fintech, infrastructure to automobiles. The re-elected president cannot ignore them.
Lula takes a divided Brazil and there is no shortage of internal trouble
Finally, a Squid there is no lack of grain internal. The social fabric needs to be completely rebuilt, poisoned by four years of presidency Bolsonaro, whose waste is still very present, given that the Election result was effectively a draw: over 49% of Brazilians wanted to restore confidence in the outgoing president and are still struggling to get over it these days. Still in December they registered clashes and riotsalways for specious reasons. Not to mention those who, in open controversy with the rest of the country, cheered against Brazil in the last few World Cup of football.
However, Squid must also beware of friendly fire: the presence of women and above all of minorities in the new government it is considered by many to be insufficient. Above all, the black electorate does not seem to be sufficiently represented, although it was decisive for the election of the former union leader. It is true that the Ministry for Racial Equality (Igualidade Racial) has been re-established, but the approach is not convincing. And about re-establishing and creating new ministries, Lula got a little carried away: there will be no less than 37, as in his second term (the record is 39 with Dilma Rousseff), while with Bolsonaro they had dropped to 22.
another criminal out of jail joins the table of an old criminal who came to power because there was no one in the usa to sit on that throne, biden lula and the hairy one, this is a good management team of ours planet. I forgot our free-range hen, so generous (with our money) towards a transvestite drug addict head of a state (let's say so) the most corrupt in the world, by now almost completely destroyed, and they're already thinking of counting the dividends. In the meantime the Italians don't know how to pay the bills, because this war waged by people who have green blood for us, we'll pay for it. The only ones to gain are the Americans. Just pay weapons to the specter.