The Brazilian economy grew a little more than expected in the first quarter (1.2%), largely because the products that Brazil exports increased in price. This happened because the United States and China are recovering well from the pandemic and have returned to buying.
The last time commodities (ores, agricultural products, etc.) increased significantly in price was during the Lula government. The thing lasted several years, the government took advantage of the bonanza to distribute income without sacrificing the rich or fiscal balance, 30 million Brazilians came out of poverty, the poor and blacks arrived at university, it was cool.
Apparently, this time it will last a lot less. There are those who think a new commodity supercycle could happen, but the safest bet is that the current rally will end when the global recovery is over in about two years.
Then you will say: but if the same thing that happened during the Lula administration is happening, why don’t I have as much money in my pocket as I did, let’s say, in 2007?
Unemployment is the highest in history, misery is visible in numbers and on the streets. As economist Zeina Latif rightly said, the “thermal sensation” for the population is not yet of GDP growth.
Well, first of all, it shows that Lula was not just lucky. He did the homework of the president of a poor and unequal country: when money appeared to spend, he spent it on the poor. If you don’t like Lula, you can say that was obvious, any idiot would do it. But if you really don’t like Lula, you probably voted for an idiot who isn’t doing it.
To general scandal, Bolsonaro did not renew emergency aid at the beginning of 2021. As a study by USP’s Center for Macroeconomics and Inequality Studies (Economic Policy Note No. 7, February 2021) showed, it was the aid that ensured the economy Brazilian market did not have a much bigger drop last year. Bolsonaro did not renew his aid in January, he had to come back with a little hurried aid, and he has already sent poor people who want more aid to ask for a loan at the bank.
And he didn’t buy vaccine. In the manifesto “The country demands respect”, signed by several of the greatest Brazilian economists in March 2021, the estimated cost of delaying vaccination was R$ 131.4 billion this year. Add to that the projection of what we would have gained from the continuation of the aid and look at the work poor commodities will have to do just to pay the cost of having Bolsonaro as president.
In short, it seems that the new rise in commodities can generate growth for us, and for God’s sake, hopefully it does, we really need growth.
But it will be surprising if it gives us a golden age as in the Lula years, at least in the scenario where it lasts only two years. In this case, we will spend the first year dying without a vaccine and the second in institutional crisis, trying to avoid a coup d’état when Bolsonaro loses the election.
The optimistic scenario is all that, but no blackout.
The pessimistic scenario is, moreover, that the commodity boom lasts long enough to re-elect Bolsonaro, only to end shortly after he takes office, leaving us miserable again, but now with a ruler ten times more coup-like. It’s the “God hates us” scenario.
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