In an exclusive interview, special advisor to Paulo Guedes says that the administration will end next year with more than BRL 1 trillion in contracted investments, on the other hand, he sees difficulties in approving reforms
ANDRÉ DUSEK/ESTADÃO CONTENTAfif Domingos, special advisor to Guedes, says that there is a lack of consensus for the approval of the reforms
To combat the impending economic slowdown in 2022 caused by the escalation of fees, the federal government counts on the injection of resources from the Brazil Aid and private investments to keep activities heated, according to Guilherme Afif Domingos, special secretary of the Ministry of Economy and one of the minister’s main advisers Paulo Guedes. The social program launched to replace Bolsa Família will pay minimum installments of R$400 by December, which will boost demand amid the erosion of Brazilian purchasing power by inflation. The regulatory frameworks and auctions promoted by the Union in recent years should contract R$ 1.2 trillion in investment for the next ten years. “As opportunities open up, people will invest,” says Afif in an exclusive interview on the website. Young pan.
The restructuring of companies hit by the economic crisis is one of the pillars of the economic plans for the first months of the new year. “The vaccine took effect, now we have to look the other way, those who have fallen, the bankrupts. These we have to get up”, he says. A economic team maintains the growth forecast of the Gross Domestic Product (GDP) 2022 above 2%. The level is much more optimistic than the 0.5% increase forecast by the financial market, and also above the 1% estimated by the Central Bank. “Things aren’t as bad as they’re advertised, and not as good as we’d like, but we’re going to be pretty average,” says Afif. “Brazil will continue its climb of recovery”, he adds. According to Guedes’ assistant, administrative and tax reforms “will hardly be voted on” in the coming months in the middle of the electoral cycle, but this does not prevent advances in economic agendas, such as simplification of taxes. “Whatever is infralegal, we can do it and we are doing it”, he says. Check out the main excerpts from the interview below.
Does the government have any cards up its sleeve to boost the economy in early 2022? A big effort is being made in terms of helping to recover those who have fallen along the way. We had the pandemic, and we warned that the preference was to look at life, and that was how the Union, State and Municipal governments faced the aspect of holding back activities and keeping people at home. We are collecting the result of the vaccine. Thanks to God, Brazil is in a superior position than many developed countries due to the response of the people, who understood the gravity of the situation and joined the vaccination process. The vaccine took effect, now we have to look the other way, those who have fallen, the bankrupts. These we have to get up. The National Congress approved the refinancing of the renegotiation of the debts of micro and small companies, mainly tax debts to be renegotiated, forgiveness of fines, forgiveness of interest. It is the first step to rebuild these companies and allow them to be reborn. In addition, there was a great discussion of precatories, and we have the space to be able to do Brazil Aid, which is essential to cover the other side of the side effects of the pandemic. We had the economic effect on companies, and in the low-income population, it hit directly on food. This aid will help, and a lot, so that this population can stay fed.
What to expect from the economy in January and February? People are effectively stimulated for life to return to normal, as seen in the streets. But it has some limitations. The limitation is having high inflation, which reduces purchasing power. Therefore, we may not have the growth we would like to have, but that doesn’t mean we’re going to have a recession. Brazil will continue its escalation of recovery. Perhaps with less momentum than came due to restrictions, but we need to win the inflation war. By winning this war, people are restored to balance their budgets. It also has the effect of the injection of resources from Auxílio Brasil. We can’t measure it yet, but as it enters, it becomes a consumption stimulus for the population, which ends up influencing the growth process. It also needs to be clear that we have a very high investment inflow through the concessions that are being auctioned. It is estimated that it has already entered into an investment commitment of between R$600 billion and R$700 billion. When the government spoke of R$1 trillion in investment, they will happen. There is great interest in basic sanitation, infrastructure, ports, airports, 5G. Things aren’t as bad as they’re advertised, and not as good as we’d like, but let’s stick with a pretty reasonable average.
How will the investments be made to reach this R$1 trillion? There has been a shift in the axis. In Brazil, public authorities were always expected to invest, to the delight of contractors. And now it has changed. Qualified contractors themselves have to become viable investors and project operators, seeking partners and resources. Brazil is perhaps today one of the largest construction sites in the world. These changes are very important for the inflow of investment resources. As opportunities open up, people will invest.
Will the year 2022 be lost to reforms and privatizations? What can be done in practice? Administrative and tax reforms are being extensively debated, but they will hardly be voted on. They have to be matured in the discussion this year [em 2022] to be voted on at the beginning of the next administration, as was the [reforma da] Pensions. It was extensively debated in the last government, but it was not approved, and it was the approved subject in the first year of this government. The reforms are more than mature in their need, but there is still no consensus in the direction.
To what extent does the Ministry of Economy adapt to the electoral cycle? We depend on political decisions. Whatever is infralegal, we can do it and we are doing it. Congress will be focused on the renewal process. Political year is political year.
Given this scenario, what will be the Ministry of Economy’s priorities? We have to stay within our path and work on what is infralegal. In tax matters, for example, if we enter headlong into the simplification process, in the elimination of ancillary obligations that plague the lives of entrepreneurs and citizens, if we clean up the agenda and processes that do not depend on legal changes, but on attitudes administrative, would be a good year to work.
Does minister Paulo Guedes enter 2022 weakened in comparison with the beginning of the government? No. He himself says that, to some extent, he feels frustrated in what he couldn’t do, but extremely gratified by what he managed to do. It’s the story of the glass half empty or half empty. There is a lot that has been done that is important.
Has the Ministry of Economy lost its position as a reformer to take a stance of spending restraint? We were hit by a pandemic along the way, it messed up many projects, and we’re going to have to catch our breath. We managed to keep Brazil running in the midst of a catastrophic global pandemic. Brazil is working, so it’s about resuming, making repairs and speeding up.
Why does the market maintain distrust in spending control? What can the ministry do to reverse this situation? There is great political noise, this generates distrust and affects economic indicators. Once the precatório process is finished, the minister must be the guardian of the treasury. The guardian of the Treasury is the one who will allow, within the rules that have been drawn up, not to have excess and abuse in an election year. This is the biggest mission of the Ministry of Economy, with the support of society and the media. have to have a control. When you see that this control is being exercised, and that we are going to continue with a serious fiscal policy, there will be a lot of improvement in the indicators. It is as soon as things start to happen and facts take the place of rumours.