Nearly one year and a month after Michel Temer took office as the 37th president of Brazil, he joined Steve Adler, Reuters president and editor-in-chief, for a Newsmaker event at 3 Times Square in New York. The two had a candid discussion about Temer’s efforts to restore confidence in the Brazilian economy, create investment opportunities and foster partnerships, as well as debunk reports of political bribery in the world’s fifth largest land-mass nation.
News articles have clearly laid out Temer’s rise to the presidency following the impeachment and removal of President Dilma Rousseff. The country had been plagued with a deep recession, high unemployment and inflation, as well as having a reputation of corruption in government. Temer seemed determined to change this with his message that “Brazil is back, it is back to stay.”
A sea change
Temer and team have been aggressively working to implement change in the country whose motto is “Ordem e Progresso” (order and progress). He described a number of initiatives his party is actively pursuing, including Labor Law Reform, modernization, improving secondary education and an effort to reduce unemployment, now in the double-digit figures. On the latter topic, he announced that over 100,000 new “formal job posts” and “many, many more informal ones” have been added, which are creating a “layer of security for both employers and employees.”
In addition, interest rates have dropped nearly 6 percent since he assumed office and now hoover around 8.25 percent with the expectation that they will drop even further into the 7 percent range. This is having an impact on lowering inflation.
Temer made the ambitious claim that, “by the end of the term, Brazil’s economy will be back on the rails again.”
Education, corruption and investment
Other initiatives on which Temer and team are focused include reform of secondary education, to increase literacy and increase employment prospects via higher education standards, and a focus on improving the pension situation and social security.
The government is also keenly aware of its reputation for bribery and special or undue privileges that have tarnished its perception on the global stage. Temer assured that Congress is now more aware of this and is working to improve the situation.
He sought to reassure potential investors that, “When we hear such statements [of corruption and bribery], they are reviewed thoroughly. We trust the Brazilian judiciary. . . . It is being tackled. Investors will not have such problems when they come to Brazil. Foreign investors will be aware of a full democracy and have greater peace of mind.”
Another area he is streamlining is that of the tax system, and simplifying government. His goal is for tax simplification, not bureaucracy, for greater national growth, in order to encourage both domestic and foreign investment.
Partnerships and Petrobras
The Brazilian constitution encompasses both socialism and liberalism. As part of its liberal principles, more emphasis is being put on partnerships with the private sector. Temer suggests that states should look to foster private sector enterprise. There have been approximately 140 different projects under his leadership in areas such as oil and gas, electric power, highways and roadways. The government is investing 800 billion reals over a 10-year timeline in the oil and gas sector.
Petrobras, the region’s leading oil producer, is a symbolic nationalized corporation and employer. Yet is has endured a massive scandal that is characterized as the lynchpin of the BRIC-nation’s downfall. Temer said that while he is not an advocate of privatizing Petrobras, he does believe “its shares should be open.” The government proposed a bill of law enabling it to take part in projects on an as-desired basis. He then highlighted the success of Eletrobras and how the market saw a 49.9% leap in one day, to its highest level ever.
Temer reiterated, “Brazil is now open and back to business. We are open to capital. We are open to joint ventures with domestic and foreign capital.”
While the US is Brazil’s second largest trade partner, he emphasized that the country is equally open to partnering and investments from Asia, ASEAN nations and Europe.
Temer spoke about the tense situation with its neighbor, Venezuela. Brazil has accepted more than 30,000 refugees from Venezuela to date, over which the nation is struggling with how to handle the influx. It has suspended its interactions with Venezuela due to the humanitary crisis and failure to uphold conditions. Temer said Brazil will not tolerate a violation of the democratic process and suggested diplomatic pressure to motivate change.
A universal moment
Temer underscored the massive transformation taking place within Brazil right now. Its rise and fall has had a gripping effect on the nation and the people want change. As Temer stated, “My country is going through a universal movement right now. People want outcomes; they want results. It matters less if they come from the left or the right. People don’t care as long as they have results.” With 37 unique political parties, it’s no surprise the challenges Brazil faces in unification and achieving results.
“There is a perception that if you’re not in government, you need to destroy it. That is not how I see it,” said Temer. “We need to be in harmony. I am the authority that is holding the title and power that belongs to the people. Authority is law. It comes from the people. When you abuse authority, you go beyond legal limits. This is the conceptual reform I’ve been preaching in Brazil.”