Brazil is ‘back on track’

Just over 18 months ago, I took office as president of Brazil, with the task of facing up the most severe economic crisis in the history of my country and its deep social impact on the people.

Faced with this challenge, I put forward a transformation agenda without recourse to populist measures. 

It comprises the broadest set of structuring reforms in the past 30 years, based on fiscal balance, social responsibility and increase in productivity.

The results are already visible. The economic recession in Brazil has been reversed and the economy has grown for the last two consecutive quarters.

Some analysts forecast a 1 per cent growth in GDP in 2017. Inflation, which was about 10 per cent in May 2016, stands below the inflation target, recorded at 2.54 per cent in September. 

The purchasing power got better with a real increase of more than 6 per cent in wages.

The responsible decrease in the interest rates alone has ensured an additional BRL80 billion to the public coffers (around $24.4 billion).

Our trade balance has been breaking records: Brazil reached a trade surplus of $58.477 billion between January and October 2017 (an increase of 51.8 per cent in relation to the same period of 2016).

This virtuous cycle lies at the root of the recovery of trust in the Brazilian economy.

The aggregate foreign direct investment data for the first semester of 2017 was $40.3 billion ($78.9 in the whole 2016). 

The energy auctions, which were held under the new regulatory model, including those of pre-salt offshore oil fields, raised about $6.7 billion.

Only in the energy sector, investments of $135.3 billion are expected to create up to 500,000 new jobs over the next few years.

The business environment was improved by means of initiatives such as de-bureaucratisation in the agricultural, services, retail and foreign trade sectors. 

The State Enterprise Responsibility Law enabled a professionalisation of state enterprises. 

Discredited in the past, the state enterprises have now been regaining value.

Aiming at raising productivity, an employment reform has been passed. 

Without removing rights, the law was modernised and brought workers from the shadow economy into formal employment.

The success of this agenda is already reflected in the increase of the employment rate indexes. 

In 2017, 163,000 jobs were created, while 448,000 jobs were lost between January and May 2016. 

In the third quarter of 2017 alone more than 1,061 million jobs were created in Brazil; more than 524,000 people left the ranks of unemployed.

The reinstatement of fiscal responsibility along with the economic growth enabled an increase in the resources allocated to social welfare.

Social welfare programmes have been recovered in tandem with the ceilings established under the constitution and thanks to efficiency in public spending.

The “Bolsa família” benefit has been increased by 12.5 per cent (after more than two years without any adjustment). 

The government has gone further and launched the “Progredir” (Getting ahead) programme, which helps families on benefit to employment and credit, and thus achieve autonomy.

The health and education budgets have increased. 

The rationalisation of healthcare management brought more resources to essential services: equipment purchase, opening new healthcare units and hiring new staff. 

The “Farmácia popular” (low cost pharmacy) programme had been spending 80 per cent of its budget on administrative costs. 

A new allocation system has increased the resources for the purchase of essential medicines by BRL100 million/year ($ 30,743,000).

In the field of education, the high school/secondary reform has updated the curriculum for the students, taking into account individual skills and the realities of the employment market.

The Student Financing Fund has been reassessed, offering 75,000 new study places, and has now become sustainable.

With the launch of the geostationary satellite, a decisive step has been taken towards the universalisation of access to broadband Internet in Brazil.

The results show that the strategy put forward and implemented by the government is the right one. 

We have left the economic crisis behind and are back on the development track.

Persuaded that there is no time to waste, I will advance the approval of the reform agenda. 

The next step will be to continue reforms, which will ensure solvency and the survival of the system, in addition to removing privileges.

Simplifying the tax law, another priority, will increase the competitiveness of our domestic production. 

With the indispensable support of the national congress, of workers and the business community, we are putting Brazil back on track.

The writer is the president of the Federative Republic of Brazil. This article was made available to The Jordan Times by the Brazilian embassy in Amman.