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Temers first
100 days
and beyond
For Temer, this could bring both relief and new pressures. On the one hand, he will
be able to act with the assertiveness of the true holder of the office until the end of
2018. On the other hand, he is already being called on to deliver concrete measures to
support an economic recovery.
In the first 100 days since Temer assumed the office, on May 12, the levels of business
and consumer confidence have risen, with the change in the administration breathing
new life into them. To try to keep these indicators on the rise, Temer has been working
to ensure his governability and to give manufacturers, domestic and foreign investors
and the Brazilian public signs that he will succeed in lifting the country from its worst
economic recession ever.
Part of this effort also involves a change in foreign policy, which, until now, has seen the
biggest changes from the prior administration. Temer wants to show the international
community that Brazil will give more attention to the worlds major economies, such
as the United States and the European Union, compared to the former government,
leaving behind the former South-South policy and the closer relationships with leftist
governments in Latin America, which was the line adopted by the Workers Party (PT).
One of the outcomes from this shift is that, with the new government in Argentina, the
two countries are now aligned again, which became clear in the opposition voiced by
both countries to Venezuela temporarily assuming the presidency of Mercosul.
In terms of social policy, the interim president maintained the status quo. The flagship
federal welfare program Bolsa Famlia, whose reach extends to 14 million households
CP DC Press / Shutterstock.com
Temer wants
to show the
international
community that
Brazil will give
more attention to
the worlds major
economies, such
as the United
States and the
European Union
Some studies
show that each
real given to
these households
generates at least
50% more in
terms of GDP
classified as poor or extremely poor, costs only 0.4% of GDP. Some studies show that each real
given to these households generates at least 50% more in terms of GDP. So, slashing social
programs could further slow the economy and would have a very high political cost for Temer.
After 100 days, Temer has yet to gain the full confidence of Brazilians. Surveys show that
confidence in Temer is at 27%, which is similar to the level of confidence in measures to
combat inflation and unemployment. And it does not stop there. Many analysts say that
the measures announced to date will not be enough to get the country out of its quagmire,
since the level of employment, which is critical to a recovery in consumption, the main
driver of GDP growth, could stagnate or fall.
If the most sensitive part of the human body is our pockets, as a prominent Brazilian
economist has said, then that is where Temer must make a difference.
Infrastructure
Amidst the reforms, in order to attract investors, the interim president
is studying how to transfer assets to the private sector. Temer
has already clearly stated that he is in favor of a comprehensive
privatization program. The list of companies to be privatized has been
promised for the 25th of this month. This could be a good opportunity
for foreign investors, given the weaker local currency in recent months.
Not by chance, the first provisional presidential decree was the
so-called Investment Partnerships Program (PPI). The program is
expected to carry out bidding processes in the energy and oil, basic
sanitation and urban mobility sectors. So far, it has announced the
privatization of four local companies.
In the oil industry, he supports a change in the rules that would
eliminate the requirement that Petrobras hold at least a 30% interest
in new pre-salt projects. Although he is in favor of a minimum local
content requirement.
With regard to
2018 presidential
elections, his answer
is emphatic: he will
not run. He will fix
house until then and
then hand over the
office on January
1, 2019 to whoever
succeeds him
Elections
When it comes to the investigation of his
campaign accounts, when he shared the slate
with Dilma Rousseff as her vice-president,
Temer says he has nothing to worry about.
Likewise, he states has is not concerned
about any information related to illegal
donations and Operation Car Wash, Brazils
largest investigation ever into corruption, and
in which his name has been cited.
With regard to 2018 presidential elections,
his answer is emphatic: he will not run. He
will fix house until then and then hand over
the office on January 1, 2019 to whoever
succeeds him.
Paulo Andreoli
Claudia Mancini
Publicis Consultants
MSLGROUP ANDREOLI