Jair Bolsonaro tackles Brazil’s pensions problem

JAIR BOLSONARO won last October’s presidential election in Brazil by railing against crime and corruption. But the success of his presidency depends on whether he can revive the torpid economy. He can only do that if he reassures investors by reforming the country’s absurdly generous pension systems, which imperil public finances. On February 20th Mr Bolsonaro presented congress with a draft constitutional amendment to bring pension spending under control. He then went on television to promote a reform that he promised would “change our history”.

Mr Bolsonaro has sent mixed signals on pensions, which funnel benefits mainly to better-off Brazilians and will become increasingly unaffordable as the population ages. The government spends 12% of GDP on pensions, compared with 8% among the rich countries of the OECD. Mr Bolsonaro raised hopes of reform by naming Paulo Guedes, a former investment banker and determined moderniser, as his economy minister. Mr Bolsonaro, who confesses to knowing little about economics, calls Mr Guedes his “Posto Ipiranga”, a full-service petrol station. On the other hand, when he was a congressman Mr Bolsonaro opposed a pension-reform plan backed by the previous president, Michel Temer. After the election he criticised Mr Temer’s scheme again, saying “we can’t save Brazil by killing old people.”