Bolsonaro Goes on Public-Spending Blitz in Final Weeks of Brazil Race
(Bloomberg) -- Jair Bolsonaro has opened the floodgates on public spending in the final stretch of Brazil’s presidential election, launching a flurry of measures meant to improve the perception of the economy and close the gap with his leftist challenger, former President Luiz Inacio Lula da Silva.
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Since the first-round vote on Oct. 2, when Bolsonaro surprised pollsters with a better-than-expected showing, he has pursued a handful of initiatives, many carrying prices tags of hundreds millions of dollars either in outright costs or forgone revenue.
The push may to be paying off. Major polls out this week show Lula’s advantage shrinking -- with one indicating that the race is a dead heat. And the right-wing president, who rose to power four years ago promising fiscal responsibility, is now doubling-down on plans to keep slashing taxes and doling out cash to Brazil’s neediest if he manages to win the Oct. 30 runoff.
Mauricio Santoro, a political scientist at the State University of Rio de Janeiro, says that while past governments had launched public works or provided stimulus in electoral years, there was a sense of improvisation given that the initiatives started so close to election day.
“What’s happening now is more like giving public money to specific interest groups that may help Bolsonaro win the election,” he said.
The measures include: adding 500,000 more families to Bolsonaro’s flagship aid program, Auxilio Brasil; increasing assistance for taxi drivers; providing credit to female entrepreneurs and debt forgiveness to companies and individuals, both through state-owned lender Caixa Economica Federal.
Read More: Brazil Finances to Return to Red in 2023 After Short Respite
Many take aim at demographics that Bolsonaro, 67, has long struggled with: women and the poor. It remains unclear how much they are helping his standing with them, but the president is gaining momentum.
A survey published by Datafolha Wednesday showed Bolsonaro gaining 48% of valid votes, which exclude null and blank ballots, up 1 percentage point from four days prior. Meanwhile, the 76-year-old opposition leader would get 52%, down a point, though the movement fell within the poll’s 2 percentage-point margin of error.
Datafolha interviewed 2,912 people across Brazil between Oct. 17 and 19.
Cash Handouts, Tax Cuts
The spending blitz adds on to what was already one of the largest pre-election spending programs in 37 years of Brazilian democracy. Earlier this year, Bolsonaro approved an aid packaged totaling nearly $8 billion. The bulk of it was dedicated to cash handouts to the poor and tax cuts to lower the price of gasoline, a top voter concern.
Read More: Bolsonaro’s $7.6 Billion Aid Package Is Approved Before Election
Bolsonaro and his allies have rejected criticism that their efforts are targeting the election, saying they’re needed to help combat hunger and cushion the blow from inflation, which is running at over 7% annually.
While the president is gaining momentum with some groups, the recent efforts have yet to curry significant favor among the poorest Brazilians. Some 55% of those who make more than equivalent of ten minimum wages, the wealthiest group polled, back Bolsonaro. Only 37% of the lowest earners support the president.
Regardless of who wins later this month, both candidates are pledging to keep or expand cash aid to the poor. Bolsonaro’s attempt to cultivate support through more state spending, however, risks eroding his status as the market-friendly candidate.
“He has continued the trend that we’ve seen throughout his presidency -- his populist side has come to the fore,” said William Jackson, chief emerging markets economist at Capital Economics. “It seems quite likely that will continue if he’s elected.”
On Wednesday alone, Bolsonaro announced that, if elected, he plans to keep federal taxes on fuel zeroed and increase funding to Brazilian cities next year. He assured, too, that his economic czar was planing on scrapping levies on thousands of manufactured goods by the end of 2023 to revitalize industry.
“I will do my part, if God gives me strength, and I will finish it,” he said at an event in Brasilia that day.
--With assistance from Martha Beck, Isadora Calumby and Guilherme Bento.
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