Jair Bolsonaro has launched a pension reform to save $ 300,000,000 – 20/02/2019

President Jair Bolsonaro presented the reform of the pension system to the Congress on Wednesday vital for Brazil's financial equilibrium and support the credibility of his ultraconservative government after a chaotic start.

With the proposal, which establishes a minimum age of 62 for women and 65 for men, the government intends to save 1.16 trillion reais over the next decade (more than 300 000 million dollars), according to a document communicated by the Ministry of Economy.

The project also establishes that Brazilians They must contribute at least 40 years with the pension system to be able to retire with a full pension.

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

The architect of the reform is Economy Minister Paulo Guedes, an ultra-liberal educated at the Chicago School, and his support for Bolsonaro has strongly supported the markets of the former army captain.

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Bolsonaro and Guedes arrived at the Congress in the morning to hand over the project to the President of Deputies, Rodrigo Maia, in the middle of a small demonstration of opposition MPs, who have They booed the executive and legislative leaders.

Bolsonaro is expected to address the nation at night.

The ultra-right president warned this week that without a new pension plan, "Brazil will fail in 2022 or 2023."

The warning may seem exaggerated, but even opposition sectors admit that a type of reform is needed in a country. aging.

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.

About 1,000 people demonstrated this morning against the project in downtown San Pablo, convened by the main unions in the country who denounce the attempt to "end social security in Brazil."

"One of the problems in Brazil is that there are people who he is retiring with a little over 50 and even less in certain categories, like the police and the teachers", said economist Marcel Balbadiano, of the Getúlio Vargas Foundation (FGV).

The prospect of a tougher retirement has led many people to apply for early retirement in recent years. That's what Silvia Oliveira intends to do, a 50-year-old Rio de Janeiro secretary.

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"I'm already quoting 30 years (the time required for a woman's retirement), but I'm not the minimum age desired by the government so I'm going to see if I can retire because I'm afraid to work twelve years more"he explains.

Other worries come from the fact that the greatest efforts are required of the categories most affected by unemployment, who will hardly be able to cope with their years of contribution.

Pension expenditures accounted for 13.64 percent of Brazil's GDP in 2017 and, without corrections, could reach 23 percent in 2060.

The 2014-2015 recession and weak growth have accentuated the aging trend: the pension deficit (public and private sector), which accounted for 2.1% of GDP in 2011, reached 4.25% in 2018.

The British consulting firm Capital saving He pointed out that the indications suggest an "ambitious reform that would stabilize the ratio of public debt to GDP" around its current level, close to 80%.

But he warned that "historically" this issue has sparked a lot of rejection in Congress and that it is feared that efforts to advance this reform "arouse the appetite" to pick from others. challenges that will bring the country back to growth.

Bolsonaro in principle has a majority of seats of several parties to approve this constitutional reform, which requires a three-fifths majority of seats in the Chamber of Deputies (308 out of a total of 513) as in the Senate (49 out of 61).

Vice President Hamilton Mourao said on Tuesday that the government currently has 250 votes in the House and that it would take "60 or 70 to approve the proposal."

But the impetus with which the president came to power on Jan. 1 was affected by accusations of dissent and corruption, which culminated on Monday with the dismissal of a prominent minister.

And the Brazilians remember that the reform promoted by President Michel Temer (2016-2018) it was nothing when his majority was weakened by allegations of corruption against the president.

AFP Agency.

GML