During the two months before Brazilian President-elect Jair Bolsonaro takes office on Jan. 1, he will begin to fill in the details of a busy agenda that is shaping up to be a politically controversial one. Bolsonaro, who ran on a law-and-order political platform, wooed Brazilian voters weary of years of economic decline, growing crime and corruption scandals reaching the top echelons of government with promises to create stability and economic growth. While his policies to fight corruption are still works in progress, they likely will form a centerpiece of his presidency. Also at the top of his priority list will be satisfying voter demands for greater economic growth. To address those concerns, Bolsonaro will try to loosen regional trade regulations. His administration will also cast a more skeptical eye on Chinese investments in Brazilian infrastructure and natural resources projects.
On Oct. 28, Brazilians elected the populist, right-wing Jair Bolsonaro their next president by a healthy margin. Bolsonaro plans significant shifts in Brazil’s domestic anti-corruption policy and in its approach to domestic security, trade regulations and foreign policy.
The central message of his campaign, however, and the one that seemed to resonate strongest with voters, was getting tougher on crime. Bolsonaro's solutions to combat the rising tide of lawlessness in Brazil will include proposals that, even if they win congressional approval, would face legal challenges. He intends to offer amendments to existing laws that would reduce the age of criminal responsibility from 18 to 16 and legally classify land seizures by squatters as acts of terrorism. But members of the political opposition and leftist advocacy organizations would challenge these measures in the federal court system. Opponents of penalizing land invaders as terrorists, for example, could challenge the government on the grounds that it would violate constitutional notions of proportional punishment for criminal actions.
The Bolsonaro administration will also likely ramp up deployments of police and armed forces to battle crime. In the tactical use of those forces, Bolsonaro likely would follow the same general line as his predecessors, Dilma Rousseff and Michel Temer. But coupled with potential reforms that would remove limits on the police's use of force by shielding officers who kill criminal suspects from homicide investigations, such operations could become much more aggressive. While a more aggressive security policy would most likely reduce violent crime in portions of Brazil's major cities over the next few years, it may not be a permanent solution as criminals adapt to police tactics and the authorities' focus shifts to other areas of the country.
A Change in Tack for Trade
As part of his economic proposals, Bolsonaro plans to substantially shift Brazil's policies toward international trade and investment. First, Bolsonaro is considering negotiations with the other members of the Common Market of the South (Mercosur) to allow bilateral deals between the South American customs union's members and other nations or trading blocs. Previous governments considered this policy shift, but Brazil's chaotic internal politics after 2014 hampered significant moves toward Mercosur discussions.
The incoming administration's proposals for liberalizing Mercosur's ability to negotiate foreign trade deals will evolve only according to the pace of negotiations with the bloc's other members. To amend the charter, Bolsonaro would need to negotiate for unanimous approval from the bloc's other members. While Uruguay and Paraguay — both small, export-oriented bloc members — are more likely to agree to an amended policy on striking free trade agreements, convincing Argentina to go along with the plan will be Brasilia's principal challenge. President Mauricio Macri's government finds itself in a politically delicate position ahead of Argentine general elections in October 2019. After years of consistent utility price hikes and currency depreciation, Macri's approval rating stands at around 35 percent. As it stands, that would be sufficient for him to reach the November 2019 runoff but not necessarily to win it. Macri's administration (or a more populist one after him) may be reluctant to negotiate a charter amendment that would possibly open up sensitive sectors of Argentina's economy to foreign competition. That said, untying Mercosur's hands on foreign trade is still a plausible outcome, but Argentine worries about domestic industries, such as auto manufacturing, would first have to be assuaged.
Approach to Foreign Policy
Bolsonaro may also try to drive a drastic evolution of Brazil's foreign policy, particularly in its options for handling Venezuela's evolving economic and social crises and its approach to Chinese investment. Under Rousseff, Brazil's government, dominated by her Workers' Party, largely refrained from interference with the Venezuelan government's handling of domestic affairs, such as its repression of opposition protests. Under Temer, Brazil took a slightly more proactive stance in penalizing Caracas for such actions. In 2017, for example, the Temer government joined other Mercosur members in voting to expel Venezuela from the bloc. Now, Bolsonaro is apparently leaving the door open for an eventual Brazilian military intervention in Venezuela — though the circumstances under which Brazil would undertake such action are narrow. Bolsonaro's view on intervention in Venezuela reportedly aligns with that of the Colombian government. Earlier this year, Bogota declined to sign a Lima Group declaration renouncing military intervention in Venezuela — possibly to leave open the option of contributing Colombian troops to a stabilization mission that could follow in the wake of a change of government in Caracas.
Bolsonaro may also try to align policies concerning Chinese investment with those of the United States and Europe by subjecting such investment in Brazil to more stringent regulation. In recent years, China has signed deals to invest in Brazilian electric and transportation infrastructure as well as to extract its mineral resources. Bolsonaro has previously criticized Chinese involvement in Brazil's state-owned minerals sector, such as the development of reserves of niobium, a critical component of steel alloys that is also valuable for use in new energy technologies. He proposed delaying the privatization of state-owned electricity generator Eletrobras over concerns that Chinese investors would snap up its assets. As he campaigned earlier in the year, Bolsonaro paid a visit to Taiwan, with which Brazil had suspended diplomatic relations decades ago. During that trip, however, he did not go to mainland China, which Brasilia recognizes diplomatically. After Bolsonaro's Taiwan visit and his anti-China rhetoric on the campaign trail, Chinese diplomats met with key Bolsonaro campaign aides to express their concerns.
Domestic influences, namely the Brazilian private sector, will shape whether or how the Bolsonaro administration might proceed with any limits on Chinese investment.
Ultimately, domestic influences, namely the Brazilian private sector, will shape whether or how the Bolsonaro administration might proceed with any limits on Chinese investment. The most plausible mechanism by which Brazil's incoming administration would more closely scrutinize (and potentially limit) Chinese investment would be to create an institution overseeing all incoming foreign investment. If Bolsonaro chose to go in this direction, he'd be more closely aligning Brazilian policies with those instituted by the United States, the European Union and Australia, which have all tightened oversight of Chinese foreign direct investment flows. However, the Brazilian private sector may be wary of adding another layer of bureaucracy.
After he takes the helm of the Brazilian government, Bolsonaro will likely respond to voters' wishes by steering the country away from the strategies of previous administrations in tackling corruption and crime and in dealing with foreign relations and trade. But his approach to domestic security, aside from potentially controversial legislation, may not differ much from that taken by previous governments. On the whole, Bolsonaro seems intent on moving Brazil in a more free trade-oriented, unabashedly pro-United States direction, although he may encounter domestic and foreign resistance that will alter the course of his presidency. But if Bolsonaro can fulfill even just a portion of his wish list, his rule will still mark a significant short-term shift away from Brazil's recent past.