HOW TO REACTIVATE THE ECONOMY OF BRAZIL AFTER THE NEW CORONAVIRUS PANDEMIC

Fernando Alcoforado*

Brazil is a country that has its economic system in a terminal stage due to the vertiginous wave of mass unemployment and the general bankruptcy of companies aggravated by the government's restrictive measures of economic activity to face the spread of the new Coronavirus that is taking Brazil to the economic depression unprecedented in the history of the country. The main internal problem in Brazil today is the stagnation of the economy with its consequences related to the closure of industries and commercial activities and services and, above all, to the mass unemployment of millions of workers that got even worse with the spread of the new Coronavirus.

The crisis of the new Coronavirus shows that Brazil is threatened with having collapsed its health system and unable to produce inputs for the manufacture of drugs, respirators and even masks to protect health professionals and the population. Today, as in much of the world, many governments lament the lack of a national development project that makes the country self-sufficient because they have left the free market to make decisions such as closing factories in the country and taking them to places where the margins of profits would be higher, as is the case of China, India and Southeast Asian countries. This stance was dictated by the vision that started to prevail in Brazil and in the world after 1990, which was that of globalization and the opening of markets according to the neoliberal ideology.

It is evident the misunderstanding of the governments of Brazil from 1990 to the present moment of adopting the economic policy of not producing locally, transferring it to places where the profit margins would be higher, a fact that was a determining factor in the decision not to invest in the production of materials and medical equipment in the country, transferring it to countries with lower production costs, such as China. The result is being catastrophic because there is a lack of supplies for the manufacture of drugs, respirators and even masks to protect health professionals and the population. In Brazil, the situation is deplorable because industry, science and national technology have been scrapped since 1990 with the adoption by the various governments of neoliberal policies that have contributed to increasing technological and industrial dependence in relation to the outside.

Due to the misunderstandings practiced by the different governments of Brazil since 1990, the country's Gross Domestic Product (GDP) will suffer a steep drop due to the huge reduction in household consumption (C) and private investments (I) resulting from the new Coronavirus and, also, export earnings (X) resulting from the drop in international trade due to the new Coronavirus. It is worth noting that the Gross Domestic Product (GDP) is calculated based on the sum of all its components: GDP = C + I + G + X - M. In this formula, C corresponds to household expenditure on consumer goods (consumption private sector), I corresponds to the expenditure of companies in investment, either in capital goods, or in stocks of raw materials and products, G corresponds to the expenditure of the State (federal, state and municipal governments) in consumer goods (public consumption), X corresponds to export revenue and M to import expenditure.

Based on this formula, it can be said that the resumption of GDP growth after the new Coronavirus pandemic can only be achieved with the expansion of private consumption (C), the increase in investment in productive activity (I), the increase in spending government (G), the increase in export revenue (X) and the reduction in spending on imports (M). Therefore, in order to increase household consumption (C), it is necessary to increase the wage mass of the population, whether by generating jobs and also by distributing basic income to vulnerable and unemployed populations and to adopt a credit policy that encourages consumer to buy. To raise the level of private sector investments (I), it is necessary for the government to reduce the tax burden and implement a policy of tax incentives and attractive interest for businessmen. Economic growth can also be achieved by raising the level of exports and reducing imports with the policy of substituting imported goods aimed at expanding economic activities. However, in order to reactivate the economy after the new Coronavirus pandemic, the State must act as if it were a locomotive capable of leveraging consumption in general and private investment. In this sense, the State must increase the State's expenditure (G) with the realization of massive investments in economic infrastructure (energy, transport and communications) and social infrastructure (education, health, housing and basic sanitation). The State must act as an inducer of the resumption of economic growth in Brazil.

To promote the reactivation of the Brazilian economy, the Brazilian government should draw up an economic plan that contributes to the resumption of Brazil's development that presents to the population and the productive sectors a perspective of overcoming the current crisis and resumption of economic growth. The development plan should guide and coordinate companies in the country that, organized in networks, and helped with trade, technology and credit policies can successfully compete in the national and world economy. The Brazilian government should consider as a number one priority to reactivate the economy with the immediate execution of a broad program of public infrastructure works (energy, transportation, housing, basic sanitation, etc.) with the participation of the private sector to combat the current situation of mass unemployment raising the levels of employment and income of families and companies to, consequently, promote the expansion of the consumption of families and companies resulting, respectively, from the increase in the salary mass of families and the income of companies with investments in public works to make Brazil grow economically again. In addition to the public works program, the Brazilian government should develop a broad export program, especially in agribusiness and the mineral sector, the drastic reduction in bank interest rates to encourage household consumption and investment by companies, the reduction of the burden taxation, the freezing of high salaries in the public sector and the cut of perks and public administration organs.

Therefore, there is an urgent need to make the Brazilian State take the reins of the national economy, abandoning the failed neoliberal economic model to reactivate the Brazilian economy and full employment, putting an end to the economic depression that will occur during the spread of the new Coronavirus. The entire set of measures to reactivate the Brazilian economy after the economic depression resulting from the fight against the new Coronavirus must be complemented with measures to combat unemployment and extreme poverty to avoid the social debacle. Given this perspective, what would be the solution to alleviate unemployment and poverty in the current situation? The solution would consist of the adoption by the federal government, state governments and municipal governments of public policies aimed at the development of the social and solidarity economy to alleviate unemployment and the implementation of basic income or universal minimum income to alleviate the population's poverty. Without the adoption of these measures, Brazil will inevitably be driven to political and social upheaval.

Regarding the Social and Solidarity Economy, it is important to note that it is a different way of generating work and income, in several sectors, be it in the productive activity, in community banks, in credit cooperatives, in family farming cooperatives, in the question of trade fair, in exchange clubs, etc. The Social and Solidarity Economy is an important alternative for the inclusion of workers in the labor market, giving them a new opportunity, through self-management. Based on the Social and Solidarity Economy, there is the possibility of recovering bankrupt companies, and to continue them, with a new mode of production, in which profit maximization is no longer the main objective, giving rise to maximizing the quantity and the quality of work. The Social and Solidarity Economy is a possible alternative to generate employment for workers who are mostly excluded from the formal labor market and consumption. In France, for example, it accounts for 10% of GDP and is responsible for 12.7% of that country's employment. The Social and Solidarity Economy emerged in various parts of the world with practices of economic and social relations that are promoting the survival and improving the quality of life of millions of people.

In turn, the basic income policy or universal minimum income for the population is one of the solutions to alleviate poverty. The cash transfer program, Bolsa Família, is an example of the application of the basic income policy. Among the reasons for this idea to become reality, lies in the fact that distributing money reduces crime, improves the health of the population and allows everyone to invest in themselves. The adoption of the basic income policy or universal minimum income for the poor population is one of the solutions to alleviate poverty, since it would allow the poor to start having money to meet their basic needs in terms of food, health, housing, etc. By having a basic income, the poor population will be able to supply their basic needs by increasing consumption that contributes to the reactivation of the economy.

From the above, actions aimed at reactivating the economy must be complemented with actions aimed at combating unemployment and extreme poverty that have worsened in Brazil with the fight against the new Coronavirus. These actions should be taken forward when there is the eradication of the new Coronavirus from Brazil. As long as the virus is present in the country, the Brazilian government must act to minimize the drop in consumption by the population and companies by maintaining essential economic activities by adopting measures to benefit the unemployed and the poor so as not to starve to death and also for the benefit of micro, small and medium-sized companies in order not to succumb to the crisis that is already happening at an insufficient level. Measures for the benefit of the unemployed and the poor include transferring government income to families and suspending payment of taxes for a specified period and granting low-interest loans to companies with the counterpart of not firing employees during isolation Social. This set of measures, which has been adopted in several countries of the world, must be maintained as long as the social distancing of the population persists so as not to aggravate their social conditions, especially of the most vulnerable populations, and the economic conditions of micro, small and medium-sized companies. To cope with the drop in tax collection by the government at all levels resulting from the reduction of economic activities, the Brazilian government must allocate resources in the volume necessary for state and city governments to face the problems with the health system and, also, the social problems concerning the most vulnerable populations while the social isolation of the population endures.

To finance all the actions necessary to reactivate the Brazilian economy and to fight unemployment and extreme poverty, the Brazilian government could adopt two strategies; 1) suspend for 5 years the payment of the internal public debt that corresponds to 48% of the federal government budget or renegotiate with its creditors in order to extend its payment so that the government will have the necessary resources for investments aimed at reviving the economy and combating unemployment and extreme poverty; and, 2) use the international reserves of US$ 362.5 billion existing in February 2020. Without the adoption of this set of actions, Brazil will not resume its growth and will inevitably be driven to economic ruin.

With Bolsonaro and his ministerial team in power and, above all, Paulo Guedes in charge of the Brazilian economy, Paulo Guedes, who did not present before and after the pandemic any economic development plan for Brazil, the country will be taken to bankruptcy economic and political and social breakdown. The ministerial meeting on March 22 shown on television demonstrated that Brazil is governed by a band of irresponsible, ill-educated and incompetent people who act uncoordinated thanks to the incompetence of the President of the Republic. Government uncoordination does not only happen in the health area with its disastrous performance in the fight against the new Coronavirus, but also in the whole government. In addition, at the ministerial meeting, the attempt by some ministers to elaborate the program they called pro Brazil, which would represent an inductive action by the federal government to reactivate the Brazilian economy, was torpedoed by Paulo Guedes at the meeting which, driven by neoliberal thinking , does not admit that the government takes a proactive attitude in promoting national development.

* Fernando Alcoforado, 80, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional Development by the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning and planning of energy systems, is author of the books Globaliza??o (Editora Nobel, S?o Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, S?o Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, S?o Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,https://www.tesisenred.net/handle/10803/1944, 2003), Globaliza??o e Desenvolvimento (Editora Nobel, S?o Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporanea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, S?o Paulo, 2010), Amaz?nia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, S?o Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econ?mico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudan?a Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revolu??es Científicas, Econ?micas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Inven??o de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associa??o Baiana de Imprensa, Salvador, 2018, em co-autoria) and Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019).