The creation of a political imbroglio by the Brazilian president with the new Argentine government is related to his low personal capacity to understand the economic reality between Brasilia and Buenos Aires and the anachronistic rhetoric of a “Cold War”, writes Charles Pennaforte, President, Brazilian Association of Geopolitics.
Mauricio Macri’s 2015 victory in Argentina seemed to represent the return of neoliberal financial elites to the command of the second most important nation in Mercosur. In 2018, the far right’s victory under Jair Bolsonaro’s leadership in Brazil pointed to the union, from the economic point of view, of close agendas. However, the reality was crueller with Argentina.
The Macri government deepened the social crisis with liberal macroeconomic policies that meet Argentina’s economic structure: a primary-based economy, large public deficit and large external debt. Not that Mauricio Macri is solely responsible for that, on the contrary. But it was up to his government to intensify the contradictions and deepen the Argentine social chaos. The victory of a government that is not in line with the neoliberal agenda in Argentina explains the Brazilian government’s negative reaction to the Peronist victory.
During the 2018 election campaign, Jair Bolsonaro made numerous statements about the “fight against communism” in Brazil and against the “political leftist” of Mercosur. He even stated in the period that in his government, if elected, he would leave the bloc, because the same was not important for Brazil. Detail: Any economic analyst knows that Argentina is Brazil’s main trading partner and buyer of manufactured goods. The Brazilian Ministry of Industry’s own trade data confirm the importance of bilateral trade for both countries.
Their struggle “against communism” continues to appear in Jair Bolsonaro’s rhetoric after being elected despite total anachronism: the Cold War ended a few decades ago, communist parties are absolutely minority in the Brazilian parliament and there is no social movement that points in that direction.
With regard to their statements on economic issues that are mostly voluntaris, they are quickly denied by their economic advisers, as they are not bound by the facts because of their low personal knowledge on the subject. Indeed, acknowledged by Bolsonaro who said “do not understand economics”. With regard to the exit of Mercosur it would bring a very big economic loss, besides not having the support of the Brazilian business itself. From a “problem” for Jair Bolsonaro, Mercosur has become its government’s main economic victory so far after the trade agreement with the European Union.
From Fernández-Kirchner’s victory what we observe is pragmatism in the relationship with Brazil. Casa Rosadas new government knows the importance of Brazil from both an economic and political point of view.
The fact is that President Jair Bolsonaro arouses great fears among his political and economic advisers when he exposes opinions devoid of knowledge of the dynamics of trade and bases them on purely private and intuitive aspects.
Economic reality will surely bring him into the 21st century and to the recognition that Argentina is as important to Brazil as Brazil is to Argentina.