Jair Bolsonaro, Brazil’s apprentice president

ONE OF THE main reasons why Jair Bolsonaro won last year’s presidential election in Brazil is that he promised to get the economy moving again after four years of slump. By naming Paulo Guedes, a free-marketeer, as his economic super-minister, he won the backing of big business and finance. Many assumed that the arrival of Mr Bolsonaro’s government in itself would breathe life into the economy. But three months in, it remains as moribund as ever. Investors are starting to realise that Mr Guedes faces an uphill task to get congress to approve a pension reform that is crucial for Brazil’s fiscal health. And Mr Bolsonaro himself is not helping.

A fiscal deficit of 7% of GDP weighs heavily on the economy, meaning that interest rates for private borrowers are higher than they would otherwise be. Pensions account for a third of total public spending, and are one reason why the state spends little on Brazil’s skeletal infrastructure. The government’s reform bill, sent to congress last month, imposes a minimum retirement age, raises contributions and closes loopholes. It is supposed to yield savings of 1.2trn reais ($310bn) over ten years. Last year’s pension deficit was 241bn reais. On its own, pension reform is not enough to return Brazil to robust economic growth. That requires tax reforms and other measures to boost competitiveness. But it has become a totem.