Pension reform among priorities of Brazil’s new gov’t

Brazil’s Economy Minister Paulo Guedes said yesterday (Jan. 2) after taking office that his administration will be founded on four pillars: the pension reform, the opening of the economy, the simplification of taxes and privatization, in addition to the decentralization of funds for state and city governments.

He said that the new government will also give great importance to human capital, through social investment. “We plan to hand out vouchers for health care, nursery schools, and education, to invest in the education of children from birth to nine years old,” he declared.

The minister argued that the market is the main mechanism for social inclusion, which allows the redistribution of money to privileged sectors for health care and education. He also advocated structural overhauls to warm up the Brazilian economy.

Guedes vowed to curb public spending instead of slashing it. Federal spending, he said, increased relentlessly in the last four decades, which led to a number of issues. He described the current economic landscape as “false peace and quiet,” and said the nation would pay dearly if the economy fails to take up a different direction.

Brazil missed the opportunity to expand the way the Asian Tigers did, Guedes claimed, as the country insisted on focusing on state- rather than market-oriented economics. To his judgment, the “insistent efforts” to have the pubic sector as the engine of the economy has led to the expansion of public spending and the destabilization of the economy.

The minister pledged to fight corporatism and the protection of privileges, and said the new government will work to make the state more efficient in distributing funds to underprivileged sectors of society.