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Interview of the month: Ricardo Sennes

In a short time, the newly elected government to preside over the country has already shown some signs of disagreement, which seems to worry some sectors of Brazilian society. What can we expect from the next few years? We spoke with Ricardo Sennes, who is a doctor and a master in Political Science from the University of São Paulo (USP) to try to answer this and other questions. Sennes is a associate director of Prospectiva and a specialist in political and economic scenarios, one of the founders of Escolhas Institute, currently president of the organization and member of the FIESP Strategic Affairs Council and the Board of Foreign Affairs Magazine (Mexico and USA). Check it out!

Escolhas Institute – What is your analysis about thepolitical and economic scenario in Brazil after seeing the presidential and national congress result?

Ricardo Sennes – There are people who think that this election was a great change package, but we at Prospectiva do not see it that way and I’ll explain why. We have two important things to note in this scenario. One is the detachment between the presidential election and all other elections in the country, including the Senate, House, State Governments and Legislative Assemblies. This is because what prevailed in these elections was spreading, a process where more and more small parties appear and grow overwhelmingly. We had a huge dispersion of party-political representation with disputes revolving around 12 or 13 relevant parties. The two largest parties are only 10% of representative. That is, the political system is fragmented, something that has become continuous and was confirmed again in that election.

However, this does not occur in the presidential field, which is very different. Paradoxically we have a pattern since 1989, where about 45% of the population votes in a center-left candidate in the first round – a role played by PT ever since – and about 50% vote for center-right or right-wing candidates. The main variation here was the political center of the right center, which had a very sharp turn to the right-wing. Meaning, this electorate, after 6 elections, opted for a candidate more right-aligned, as we saw in the Collor era.

In short, there is nothing new from the point of view of the electoral dispute. Party fragmentation has deepened, and in the presidential field we have polarized a kind of structured publics since 1989, that now elected a right-wing candidate by a relatively small margin of difference from the second place.

From the point of view of renewal, we can say that we had a nominal (non-re-election rate) that is the non-reelected deputies and senators who opened space for new politicians. And the effective rate (new candidates who entered and who are not career politicians, ie those really neophytes) that was 19%, an index that doubled. However, 81% are from traditional politicians. We did not have an election that broke electoral political standard that had already been in place. It remained.

Escolhas – There is a great concern with positions considered conservative of leaders of the new government, for example, in the subject of global warming and exit from the Paris Agreement. At the same time, many people believe that when it comes to ruling, the theory changes. There is a certain pragmatism that guides political action. What is your assessment in Brazil?

Ricardo Sennes – Party logic is what governs the Brazilian political model. Every president faces major challenges in governing by having to structure a large support bench in an environment of high party fragmentation. Governments have shown great difficulty in sustaining this situation in the medium and long term. This has happened to candidates from left and right wing. Each vote is a vote, ensuring a qualified majority in political battles is difficult and costly. The current government wants to do this with themed panels. They never tried this before. It is a high-risk strategy of the new government, because it knows that public opinion, civil society, control agencies and some institutions have weight in the country. Having the support of three or four thematic panels does not solve the chronic problem of forming stable political majorities. Economic recovery is the best argument. Always. But the resumption of the economy expected for this year – between 2% and 3% GDP growth – is not necessarily going to have a fall in employability. It is not only about GDP.

So, the new government will not be able to issue decrees in default of the will of the majority of the population. No one can, for example, go against the State´s secular nature. The conservative agenda responds to an ideological profile of a portion of society, but it does not account for every population that has a very diverse profile in Brazil. The Brazilian population is very conservative in some aspects (as drugs, violence, etc.) and very progressive in others (such as homosexuality, social policies, racial issues). It is necessary to know how to deal with this, otherwise it will have problems, even more when we talk about a president who was elected in the second round with 55% of the votes and 30% of abstention even with its competitor associated with corruption, crisis and high rejection rate. It was a surprise that he won the election, but he did not do it in an overwhelming way. There are layers of governance that need to be respected. Even his economic agenda, which until now is quite liberal, is largely the same as Temer and, in some points of the agenda, even the same as Dilma and Lula. These are important reforms that have been on the horizon for some time. There is no innovation in this part.

Escolhas – What about the scenario of Brazil´s insertion in the new government international relations context?

Ricardo Sennes – I believe that as regards foreign policy, the new goverment will assume an ideological stance. The very choice of the Foreign Minister  – Ernesto Araújo – demonstrates this. There is already a surprising ideology in Brazilian foreign policy, something that they criticize in the PT, but they are doing the same thing, only with reversed sign. In his speech Ernesto says that we need to adopted a position of strength and national statement towards other countries and agreements signed in the past, demonstrating alignment with the US (Trump in particular) in that sense. In the case of the Europeans, there are signs that there will not be much space for Brazil. They do not think that the president-elect´s stance is anything but reasonable and they already made this explicit. While China, for example, even with all of Bolsonaro´s negative statements, is open to possible partnerships and dialogue. And in Latin America there is a tension policy creating cracks. For example, the government privileged Chile for ideological reasons rather than seeking a quick rapprochement with Argentina, which traditionally has a much stronger economic relantionship with Brazil. In Venezuela there may be a greater tension, including militarization. Our tradition is not conflict but conciliation. We need to be aware of that.

The cost of sustaining a conservative speech in foreign policy is very high. There are two options: either the government will actually use this to strain the ideological debate and make room for greater pragmatism domestically; or it will attenuate conservative speech in order to be able to operate in amore rational waythe issues that are important such as trade, investments and the Chinese presence itself.

Escolhas – One of the most complicated issues facing the new government´s complaint is what is being called an “environmental barrier” to infrastructure work. What is your point of view to build a path where we can generate a common denominator to unlock this infrastructure agenda without aggravating the environmental tensions in the country?

The issue of infrastructure in fact is a locked agenda. In my assessment there is a regulatory misalignment, that is, the various regulations that operate in different fields of infrastructure do not converge, do not create an investment-friendly space that is at one time efficient from the operation, allocation of resources and environmental’s practical point of view.  It does not favor the cultural heritage or technology incorporation.  Each if these regulations brutally hinders the sewing of a large project that simultaneously contemplates all these dimensions. This blocking therefore, is not limited to the environmental issue, it is much broader. It is a crucial task to create an accomodation space for these various legislations, which is fundamental for those who want to unlock the infrastructure agenda in general. Focusing only in the environmental, indigenous or quilombola issues, seeking to make these laws more flexible does not save them from a more conservative point of view, nor from the business environment point of view. Companies do not need less environmental legislations, they need predictability and guarantees of minimally viable regulations for capital-intensive long-term investments. If the government´s proposal is to simply soften these environmental regulations, it is a very partial and biased reading.

To give you an idea, the land problem is a much older problem in Brazil. Our country has a culture of respecting privade property that is far more damaging to the infrastructure development agenda than the environmental issue. To expropriate a rural property to benefit the public, common and collective good, is practically impossible. We are more likely to privatize in this sense than many capitalists countries exalted by our rules. It is as if an owner had more rights than the general population, the collectivity. This negotiation should be easier, regulatory misalignment occurs when each regulatin seeks to maximize its regulation object making it impossilbe to integrate all other aspects into a project.

Deregulation in some cases makes sense, to make some legislation more flexible can and should be done, mainly contractual point of view. Legal and procedural issues, labor issues and others, are more expensive in the end and are much larger hampering than the environemtnal, for example. Good regulation is necessary. The market does not work without rules, but with good rules.

Escolhas – If you quote a problem that Brazil must seriously face, what would it be?

Brazil´s investment rate today is 14% to 15% of GDP, and it should be around 25% for a developing country. The infrastructure investment field shoud be 4% to 5%, but today it is 2%. So, Brazil´s problem is low investment, which generates low added value, low job creation. Without minimal economic dynamism, everything else is lost. Nothing is sustainable in the medium term in a society where social inequality predominates and does not have economic growth. No civilizing rule survives in a permanent expensive environment.

Escolhas – And how to unlock it?

Ricardo Sennes – We need to create a favorable environment to undertake in the country, not only from the entrepreneurial entrepreneurship point of view, but all entrepreneurship. It can be a cultural project, a small business, an association of seamstresses women, an oyster farm, a scientific innovation project, an NGO. So we are talking about a much broader problem.

Escolhas – Are you optimistic about the country´s future?

Wit Brazil I am very optimistic, but I believe we will go through comlicated periods. I think that Brazilian society, if you look at the last 25 years after dictatorship, has advanced a lot in many areas. From the enstitutional point of view, acquired rights, individual freedom, solidification of Public Ministry for example, and also from the socioeconimic point of view. We improved substantioally, especially the income of this large urban middle class. But we went backwards in some areas, we have the collapse of education, public security and public accounts. In the final balance, Brazil did more right than wrong. In the long-term I am optimistic.