Brazil frontrunner for Speaker vows to pursue Bolsonaro’s economic agenda

A Jair Bolsonaro-backed candidate favoured to clinch the presidency of Brazil’s lower house of Congress has vowed to step up the president’s push for economic reform and maintain a cap on government spending if elected.

“Brazil needs to move forward with structural reforms,” said Arthur Lira, a federal lawmaker with the centre-right Progressives party who is widely seen as the frontrunner for the Speaker role, which would put him in control of Brazil’s legislative agenda including economic reform plans.

“We have been waiting for the tax reform report for two years,” he told the Financial Times. “Topics such as administrative reform and privatisations were not even taken to congressional leaders. Failing to discuss matters is bad for Brazil.”

Beyond a pension reform two years ago, little progress has been made on the government’s vaunted economic agenda, with tax and administrative reforms floundering in Congress, despite broad agreement they are necessary to restoring Brazilian’s economic fortunes.

The election in Congress on Tuesday comes amid a groundswell of anti-Bolsonaro sentiment over the Brazilian president’s handling of the coronavirus pandemic. Whoever wins the contest will control any impeachment proceedings against the president that might arise.

I don’t have an owner, I don’t have a boss, I don’t have a tutor and I don’t have a sponsor

Last week, rightwing demonstrators, once sympathetic to Mr Bolsonaro’s populist government, drove convoys through São Paulo and other cities, calling for his impeachment. New opinion polls show the president’s weekly approval rating at its lowest since the beginning of his government in 2019.

For his part, Mr Lira has attempted to walk a fine line on how he would handle impeachment requests if elected, saying he would follow the wishes of the majority in Congress.

“I don’t have an owner, I don’t have a boss, I don’t have a tutor and I don’t have a sponsor,” said Mr Lira, who has attempted to portray himself as an independent arbiter, despite his apparent close relations with Mr Bolsonaro.

His main competition in the race is Baleia Rossi, a centrist lawmaker who is supported by Rodrigo Maia, the current president of the lower house and one of Mr Bolsonaro’s primary political rivals for the past two years. The winner of the race will serve a two-year term.

“Lira is the favourite. As of now he has the votes [to win] but in an election in the house, everyone is a swing state. Everyone can change depending on what is offered. It is a transactional race,” said Lucas de Aragão, a partner at consultancy Arko Advice.

Many analysts believe Mr Rossi would continue in Mr Maia’s footsteps in acting as a bulwark against Mr Bolsonaro’s more populist instincts, particularly on matters such as gun control and the environment.

Both Mr Rossi and Mr Lira, however, have voiced support for ensuring government expenses remain below a constitutionally mandated spending cap, a fiscal anchor that limits government spending to the previous year’s expenses adjusted for inflation. His economy ministry wants to maintain it, but Mr Bolsonaro might decide he wants to spend more to boost his popularity.

Following massive emergency coronavirus stimulus spending last year, Brazil’s debt has surpassed 90 per cent of gross domestic product, the highest total debt of any emerging market outside China. The question of whether the cap will be breached has emerged as a central focus of investors worried by the sustainability of the country’s public finances.

“We have to have a serious debate on the subject [of more crisis aid]. We are dealing with the lives of millions of people. [But] the options must be within the spending ceiling and parliamentarians need to set priorities for available resources,” said Mr Lira.

Hailing from Alagoas, a small state in Brazil’s north-east, Mr Lira is a leader of a political bloc known as the Centrão, which is noted more for its transactional approach to political deals than its ideological leanings. Last year, the bloc allied with Mr Bolsonaro in order to stave off moves towards his impeachment in Congress.

Mr Lira is running for the presidency of the lower house while being investigated for corruption as part of Brazil’s long-running “car wash” graft probe. His ex-wife has also accused him of battery, a claim he denies.

Additional reporting by Carolina Pulice