THE OBSTACLES THAT IMPEDE THE DEVELOPMENT OF BRAZIL IN THE CONTEMPORARY ERA AND THEIR POLITICAL CONSEQUENCES

Fernando Alcoforado*

This article aims to demonstrate that the Lula government is faced with two major challenges in its effort to promote the economic and social development of Brazil that needs to be overcome to prevent right-wing extremists from regaining the Presidency of the Republic and expanding their participation in the state governments and in the National Congress and put into practice their nefarious anti-social and anti-national project. The first challenge, of an economic nature, is represented by the obstacles that prevent the Brazilian government from making public investments in the expansion of the economy and coordinating its monetary and fiscal policies, and the second challenge, of a political nature, is represented by the obstacles existing in the National Congress imposed by retrogrades? politicians and parties that disable the Brazilian government from implementing a national developmentalist project. Brazil's political, economic and social advances in the present and future will only be achieved if the Lula government is successful in overcoming these obstacles.

The inability of the State in Brazil to make public investments in the expansion of the economy is part of the strategy of globalized neoliberal capitalism to transform it into a minimum State since 1990. Minimum State is the name given to the idea of neoliberal capitalism that the role of the State within of society must be as small as possible, carrying out only those activities considered “essential” and of the first order. Neoliberal doctrine preaches the smallest possible participation of the State in the economy, giving preference to the private sector. As a result, the expected direct and indirect effects of reducing the size of the State would be the reduction of taxation, market liberalization, privatization of economic activities, de-bureaucratization and a more business-friendly environment.

The neoliberalism strategy to transform the Brazilian State into a minimal State began in 1990 during the Fernando Collor government, which, among other economic evils it produced, culminated in the adoption of the public spending ceiling policy during the Michel Temer government, whose central objective was to prevent the lack of control of public accounts and the adoption of Central Bank autonomy during the Jair Bolsonaro government with the aim of controlling inflation. With the public spending ceiling policy, the Brazilian State was limited in its ability to promote public investment with the financial asphyxiation to which it was subjected and made the Brazilian State's ability to adopt economic, fiscal and monetary policies, articulated with each other with the autonomy of the Central Bank. In addition to facing restrictions in its investment capacity, the Brazilian State has also lost the capacity to act in the search for economic stability in Brazil, given that it is with an increase in public spending or investment that the federal government will be able to compensate for the eventual drop in the household consumption (C), private investment (I) and exports (X) and the increase in imports (M) to maintain GDP growth = C+I+ G+X-M or, with the reduction in public spending, compensate the eventual increase in household consumption (C), private investment (I) and exports (X) and the fall in imports (M).

If the public spending ceiling policy for the Union were maintained, the main trend would be that, within a few years, federal government spending would have an increasingly smaller share in the formation of Brazil's GDP, compromising economic and social development of the Country, given that the federal government would be prevented from increasing public spending to promote Brazil's economic growth or combat the recession with the adoption of compensatory measures from a macroeconomic point of view. This is the reason why the inclusion of the spending cap policy in the federal Constitution constituted a crime against the development of Brazil, that is, a crime against the country. The public spending ceiling policy inserted in the Constitution of Brazil based on PEC 55/2016 during the Michel Temer government was a crime committed against the development of Brazil because it sought to limit public spending for the next 20 years, starting in 2017, which they would only be readjusted based on the previous year's official inflation with the possibility of revision from the tenth year of validity. This means that the federal government would be prevented from preparing the Union budget with a value greater than that of the previous year and could only correct its values according to inflation.

With the spending cap policy, some public spending could grow more than inflation, as long as they were compensated with real cuts in other areas. This implied that, in practice, public spending could not grow during its 20-year term, that is, public spending would be frozen for 20 years, compromising public investments in energy infrastructure, transport, communications, education, health, basic sanitation and popular housing necessary for the economic and social development of Brazil. This means that if the public spending ceiling policy were maintained, the Lula government would be unviable. In an attempt to alleviate the burden of the cursed legacy of the spending ceiling policy adopted during the Temer and Bolsonaro governments, the Lula government instituted the so-called fiscal framework that has also been called the “new spending ceiling” now conditioned to the increase in public collection. With the fiscal framework, the Lula government will be able to increase public spending as long as there is an increase in public collection this year and in future years to balance the government's accounts. This is an immense challenge since the increase in public revenue depends on the expansion of the economy which, in turn, depends on the increase in public and private investments. In other words, if there is a drop in public revenue, the Lula government will not be able to make the public investments necessary for Brazil's development.

In addition to the absurd PEC 55/2016 during the Michel Temer government, which established the public spending ceiling, the National Congress during the Jair Bolsonaro government approved Complementary Law 179/2021, which established the autonomy of the Central Bank, whose president and directors have mandates fixed periods of four years, not coinciding with that of the President of the Republic, both measures aimed at incapacitating the Brazilian State in the adoption and execution of fiscal and monetary policies. With the autonomy of the Central Bank, the National Congress made it impossible for the federal government to adopt coordinated fiscal and monetary economic policies, as is currently the case, as the recessive monetary policy imposed by the Central Bank with extremely high interest rates, the largest in the world, makes the effort unfeasible of the Lula government to promote the resumption of national development. Furthermore, there is an obvious fact that the Central Bank's adoption of interest rates as a method of controlling inflation has not worked in Brazil. The extremely high Selic interest rates adopted by the Central Bank did not contribute to keeping inflation below the inflation targets established from 2008 to 2015 and also in 2021. Inflation rates were only below the inflation targets from 2017 to 2021 due fundamentally to the gigantic economic crisis that occurred from 2016 onwards in Brazil and the impact of the new Coronavirus pandemic that contributed to the fall in aggregate demand in the Brazilian economy and not due to the Selic interest rates imposed by the Central Bank.

The ineffectiveness of the Central Bank with its policy of increasing Selic interest rates to combat inflation in Brazil has been proven. The ineffectiveness of the method of increasing Selic interest rates in combating inflation in Brazil, which only benefits rentiers, places on the agenda the need to replace this method with effective direct action by the federal government on the factors that generate inflation with the adoption of concrete measures to eliminate demand inflation, cost inflation, monetary inflation, inertial inflation and the possibility of hyperinflation, when they occur. The Lula government should combat inflation in the demand for goods and services by planning the economy together with the productive sector so that national production meets the internal demand for goods and services. When domestic production is insufficient, the Lula government should commit to importing what the country needs. The Lula government should combat inflation in production costs by monitoring the evolution of the prices of wages, raw materials, inputs and taxes to adopt measures that help to avoid their increase without a corresponding increase in productivity and encourage an increase in productivity in agricultural production , industrial, commerce, services, electrical energy and oil production systems and cargo transportation, and the increase in the government's own productivity at all levels. It should be noted that increasing productivity means increasing production over time, with the least use of resources, at the lowest possible cost and the elimination of unnecessary expenses and waste. This can be achieved through the use of more modern production systems and the rationalization of the working methods used. To avoid monetary inflation, the government has to avoid uncontrolled issuance of currency. To avoid inertial inflation, it is necessary to avoid price indexation. To avoid hyperinflation, it is necessary to avoid inertial inflation. Unfortunately, none of these measures to combat inflation can be adopted by the Lula government with the existence of the independent Central Bank.

In addition to the first obstacle, of an economic nature with the obstacles represented by the spending ceiling policy, despite the flexibility provided by the Lula government's fiscal framework and the existence of an independent Central Bank, which make the Brazilian government unable to coordinate its fiscal and monetary policies and making public investments in the expansion of the economy, the second major obstacle occurs, of a political nature, represented by the fact that the Lula government does not have a majority in the National Congress, which prevents the federal government from obtaining approval for its priority projects. In addition to being composed mostly of conservative politicians, opportunists mostly uncommitted to the interests of the vast majority of the Brazilian population, the National Congress also has among its members extreme right-wing parties and politicians who seek to disable the Brazilian government from implementing a national developmentalist project. The current political and economic situation in Brazil demonstrates that it is not enough to elect a President of the Republic committed to the country's progress. It is also necessary to renew the National Congress by electing progressive representatives of the people to prevent the obstacles that impede Brazil's development from continuing.

In addition to the first challenge, of an economic nature with the obstacles represented by the spending ceiling policy, despite the flexibility provided by the fiscal framework and the existence of an independent Central Bank, which make the Brazilian government unable to coordinate its fiscal and monetary policies, carry out public investments in expanding the economy and achieving macroeconomic stability, the Lula government faces the second major challenge, of a political nature, represented by the fact of not having a majority in the National Congress, which prevents the federal government from putting into practice its national developmental project and meeting social demands in fullness. In addition to being composed mostly of conservative, opportunist politicians, largely uncommitted to the interests of the immense majority of the Brazilian population, the National Congress also has among its members extreme right-wing parties and politicians who seek to disable the Brazilian government to implement a national developmentalist project and avoid implementing projects of a social nature. The current political situation in Brazil demonstrates that it is not enough to elect a president of the Republic committed to the country's progress. In addition to electing a progressive president, it is also necessary to renew the National Congress by electing the majority of representatives of the people committed to political advances, economic and social to overcome the obstacles that impede Brazil's development.

For progressive forces in Brazil to re-elect President Lula in the 2026 presidential elections and obtain a parliamentary majority in the National Congress committed to political, economic and social advances, the Lula government will have to be successful on the economic front, promoting the expansion of the economy, significantly increasing job creation and income, keeping inflation under control and meeting the maximum social demands that benefit, above all, the country's underserved populations. Furthermore, progressive forces need to commit, starting from the 2024 municipal elections, to elect the maximum of mayors and councilors committed to Brazil's political, economic and social advances. These are the conditions to prevent, in 2026, right-wing extremists from regaining the Presidency of the Republic, expanding their participation in state governments and the National Congress and putting their nefarious anti-social and anti-national project into practice.??

* Fernando Alcoforado, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the SBPC- Brazilian Society for the Progress of Science, of IPB- Polytechnic Institute of Bahia and of the Bahia Academy of Education, engineer from the UFBA Polytechnic School and doctor in Territorial Planning and Regional Development from the University of Barcelona, college professor (Engineering, Economy and Administration) and consultant in the areas of strategic planning, business planning, regional planning, urban planning and energy systems, was Advisor to the Vice President of Engineering and Technology at LIGHT S.A. Electric power distribution company from Rio de Janeiro, Strategic Planning Coordinator of CEPED- Bahia Research and Development Center, Undersecretary of Energy of the State of Bahia, Secretary of Planning of Salvador, is the 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), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019), A humanidade amea?ada e as estratégias para sua sobrevivência (Editora Dialética, S?o Paulo, 2021), A escalada da ciência e da tecnologia e sua contribui??o ao progresso e à sobrevivência da humanidade (Editora CRV, Curitiba, 2022), a chapter in the book Flood Handbook (CRC Press,? Boca Raton, Florida United States, 2022), How to protect human beings from threats to their existence and avoid the extinction of humanity (Generis Publishing, Europe, Republic of Moldova, Chi?in?u, 2023) and A revolu??o da educa??o necessária ao Brasil na era contemporanea (Editora CRV, Curitiba, 2023).?