Brazil’s New President Eyes Privatizations for Pension Reform

Jair Bolsonaro, Brazil’s new president, needs to tackle the nation’s pension reform, and a senior aide says the new leader’s privatization program is still under evaluation.

Bolsonaro was sworn in on Tuesday, and according to Chief of Staff Onyx Lorenzoni, had a successful first meeting with his full cabinet. Lorenzoni expects each minister to announce their highest priority early next week.

The new president wants to liberalize Brazil’s economy, eliminate socialism, end gang activity, and establish conservative approaches in education and other areas.

He announced plans Wednesday to work toward setting up pension privatization, tightening prison sentencing guidelines, and giving the Agriculture Ministry control over indigenous land claims.

“We will soon attract initial investments of around 7 billion [real], with rail concessions, 12 airports and 4 port terminals,” Bolsonaro tweeted. That translates to $1.86 billion in US dollars. “With the confidence of the investor under conditions favorable to the population we will recover the initial development of the infrastructure of Brazil.”

Bolsonaro did not provide further details. In his inauguration speech, he promised to “work tirelessly so that Brazil reaches its destiny,” adding that his “vow is to strengthen Brazil’s democracy.”

Paulo Guedes, the nation’s new economy minister and a large proponent of mass privatization, said in his Wednesday swearing-in speech that he would reduce taxes and fix Brazil’s unstable social security system, which is becoming too costly for the country to run due to its generous retirement benefits.

Men can retire at age 65, while women can cease working at 60 to receive their full benefits. If they want to retire early, Brazilians can do so at 55, but are only able to collect 70% of their final salary for the rest of their lives.

Due to pensioners choosing to collect their rewards at an increasingly higher rate, a troubled economy, and a titanic public debt, the social security system is one of the first ways Brazil’s leaders are looking to fix the situation.

Guedes also said he wants to shave Brazil’s tax debt to 20% of gross domestic product, from 36%, free the credit market from state banks, and cut back on protectionism.