Brazil’s Economy Minister: Government Not Planning Emergency Aid in 2021

RIO DE JANEIRO, BRAZIL – Minister of Economy Paulo Guedes said on Monday, November 23rd, that Brazil is rebounding strongly from the novel coronavirus pandemic and that, as there is no evidence of a second wave of infections, the extension of the emergency aid is not in the government’s plans.

The focus from 2021, with the end of urgent measures to tackle Covid-19, will be to progress on the liberal agenda, with reforms and privatizations, which are dependent on “political timing,” he explained.

“The pandemic is down. Is it over?. Not yet. But to say today that there is a second wave and that the government will need to extend the aid is hasty. There is no empirical evidence to justify such a move. Let’s abandon the false narratives,” said the Minister in an online event promoted by Empiricus.

According to Guedes, the country can not “falsify reality” to justify the extension of emergency measures. “The plan is for the emergency aid to be terminated at the end of the year,” he said.

Guedes acknowledged the gravity of the pandemic, which he considers “a tragedy of tremendous proportions,” but stated that “against empirical evidence, there is little argument”.

The government is prepared, should it need to act, but it sees no reason to maintain the aid in 2021, although there is, according to him, much political pressure in this respect.

“The disease gave way and the economy has rebounded with great vigor. From the government’s perspective, there will be no extension of the emergency aid,” he said.

“Should there be a second wave, we already know how to respond. We know the programs that worked best, the ones that didn’t. We are prepared to respond,” assured the Minister.

In his opinion, the second wave speech is a “false narrative, like saying that the government has no plans and is paralyzed,” which, according to Guedes, is not true. “It’s political narrative. The reforms are underway,” he said.

Earlier, at an event of the Federation of Industries of the State of Rio de Janeiro (FIRJAN), the head of the economic team stated that there are new “peaks” of infection by the novel coronavirus.

“These are cycles, let’s watch them. The fact is that the disease has subsided substantially. People have gone out more, they have become somewhat careless. But the disease has a seasonal nature, we are entering summer,” he commented.

Benefit

The emergency aid has been paid since May to casual and unemployed workers affected by the pandemic. Initially, the benefit would only be paid until July, at a lower amount. The government suggested R$200 (US$40) per month, but Congress increased it to R$600.

The first extension in August ensured payments through December, but of R$300 per month instead of R$600. Guedes discarded possibility of a new extension, even if at a lower amount than the one currently paid.

Extending the R$300 emergency aid for another four months, to 25 million people, would cost approximately R$15.3 billion to the federal treasury, according to estimates by the Independent Fiscal Institution (IFI), a body linked to the Senate.

Part of the government even suggested that the benefit should be replaced by the ‘Renda Cidadã’ (Citizen’s Income) or the ‘Renda Brasil’ (Brazil Income), the social program the government intends to launch in place of the ‘Bolsa Família’ (Family Grant). But, as yet with no definition on the source of funding, the plan is far from being implemented.

The ‘Renda Brasil’ ” has no direct connection with the emergency aid,” explained Guedes. “It is part of another family. It must be fiscally sustainable. It’s not about the pandemic itself, but rather about transferring income to poorer families. It’s a revolutionary program of the structural reforms family, not an emergency measure,” he said during the online event. The permanent transfer program and the emergency aid are two measures that, according to him, “are unconnected”.

“One is not a substitute of the other. It was considered that the solution would lie in the new program, but there were misunderstandings,” said Guedes. One of them was the need to find sustainable sources of funding for the new program, a point still unresolved. The second was President Jair Bolsonaro’s statement that he would not “take from the poor to give to the very poor”. The proposal discussed at the time was to cut salary bonuses to fund the program.

Source: Exame

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