A bold reform of pensions to balance the accounts in Brazil

BRASILIA

The President of Brazil, Jair Bolsonaro, yesterday presented to Congress a proposal for reform of the pension and retirement system, according to which the state would save for this concept more than 300 000 million dollars over 10 years.

The project, considered vital to the country's financial equilibrium, has been negatively affected by the markets, which predict complex negotiations and believe that it will be modified several times by fragmented legislation, for which the government will need to a special majority of both houses to approve it.

The San Pablo Stock Exchange, which grew by almost 1%, driven by a first enthusiasm, ended up yielding 1.14%. The real, on the other hand, tilted slightly lower and closed at 3.72 for a dollar.

"We know the difficulties, but we have the competence, the patriotism and the commitment on your part to save Brazil economically.We have no other way out," said Bolsonaro, who presented the project to Congress with his minister of the economy, ultra-liberal Paulo Guedes.

The project establishes a minimum age of 62 for women and 65 for men. The Bolsonaro economic team is forecasting a savings of 1.16 billion reais (over $ 300 billion) over the next decade.

The proposal also provides that Brazilians wishing to retire with a full pension must contribute 40 years to the system and increase the contribution period to qualify for the minimum benefit of 15 to 20 years.

Brazil is today one of the few countries not to have a minimum age to retire. The current system allows women who have contributed for 30 years to retire and men aged 35, without a minimum age, although the amount of the benefit is improved for those who extend their working lives.

The government has put in place a vast communication device to overcome the reluctance of the population to a project that hardens the rules on retirement.

In 2018, 9.2% of the 209 million Brazilians were over 65 years old. In 2060, they will be 25.5%, according to official forecasts.

Bolsonaro has in principle a majority of seats in several parties to approve this constitutional reform, which requires the vote of three fifths of seats in the Chamber of Deputies (308 out of a total of 513) and the Senate (49 out of 61). The government now has 250 votes in the House. (AFP and EFE)