Brazil faces hard spending choices in 2021

IN THE FINAL days of a tight mayoral race in November in São Gonçalo, an unglamorous city across the bay from Rio de Janeiro, one of the candidates, a retired police officer known as Capitão Nelson, made his way down a street lined with supporters. The mood was euphoric. A maskless man with a bottle of sanitiser on a string around his neck stomped his feet to funk music and squirted the gel into the air “to kill the germs” of the rival party. Humberto Perez, a handyman, likes the captain “because he cares about poor people, just like the president”, Jair Bolsonaro. After work dried up in March a monthly payment from the federal government kept him from going hungry. “And the campaign gave me a free lunch,” he said, with a toothy grin.

The fact that some Brazilians are celebrating during a pandemic that has killed 180,000 of their fellow citizens is among covid-19’s many paradoxes. So is the reason for their cheer: that a right-wing, pro-market government has rolled out the biggest welfare programme in Brazil’s history. Before the pandemic, extreme poverty was on the rise. Nearly 1m families were on the waiting list for Bolsa Família, a conditional cash-transfer programme that the government had cut back after a recession in 2014-16. In March 2020 widespread hunger seemed imminent. Paulo Guedes, the economy minister, proposed to spend no more than 5bn reais ($1bn), 0.2% of the budget, to fight the pandemic.