Economist warns that 2020 GDP could be worse than the 1,1% growth of 2019.
"It must be acknowledged that neoliberal measures have not achieved the promised results," says Márcio Pochmann, professor of Economics at Unicamp. "We are burning bridges to get out of the crisis. The management of the economy is weak and incompetent."
Current Brazil Network - According to economist Marcio Pochmann, a professor at the Institute of Economics at the State University of Campinas (Unicamp), the 2019 GDP result, with a "meager" growth of 1,1%, reveals that the neoliberal "reforms"—labor and social security—did not achieve the results advocated by Jair Bolsonaro and Paulo Guedes, with the support of the traditional media, and also exposes the "discrepancy" between government and market projections and reality. "If there is no change of course, the trend is that growth in 2020 will be even worse, due to the global impacts of the coronavirus epidemic," he states.
Speaking to journalists Marilu Cabañas and Glauco Faria, for Jornal Brasil Atual, this Thursday (5), Pochmann reinforced that liberal economists practice fake news, and that the results of the country's economic activity last year were only not worse because of “heterodox” measures, such as the release of FGTS accounts. “They argued that reforms and cuts in public spending would lead to a recovery of the private sector and, therefore, the country would grow again. Unfortunately, these promises did not materialize. We are at the beginning of 2020 with a per capita income 7,3% lower than that which Brazilians had in 2014,” said the economist.
According to the professor, the "spokespeople" of the financial market need to engage in "self-criticism" regarding the measures they advocated for that did not achieve the desired results. "They demand self-criticism from the left, but this type of circumstance doesn't seem to exist for the center and the right. It's fundamental to understand where we went wrong in order to change."
According to Pochmann, these are not reforms, but "deformations." "It's a kind of belief, an illusion, that growth is very close. But to get there, you have to make this and that reform. In fact, the word reform would no longer be appropriate. They are 'deformations.' They are deforming the country and leading us down a path of evident decline."
Interest rates and employment
According to Pochmann, lowering interest rates is important to curb the advance of the "financialization" of the economy, but insufficient to make the country grow if it is not accompanied by measures to stimulate production and consumption.
The labor reform's flexibilization of employment contracts, with the removal of rights, has also produced a statistical increase in employment, without guaranteeing workers the minimum conditions to support themselves. "They are creating a category of poor workers. Work is no longer enough to escape poverty."
Booking
In addition to failing to do what is necessary to promote growth, the economic team of the Bolsonaro government is adopting measures that make it impossible to implement actions that would contribute to a faster exit from the crisis. For example, he advocates using part of the international reserves to implement an emergency plan to resume growth.
"The problem is that we are seeing a flight of dollars from the country. In order to prevent our currency from devaluing even further, the Central Bank (BC) has been burning through reserves. We have lost almost 10% of what was accumulated up to the Dilma government. We are burning the bridges to get out of the crisis. The management of the economy is lame and incompetent."