This article presents the necessary measures to reactivate the Brazilian economy after the spread of the new Coronavirus

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HOW TO REACTIVATE THE ECONOMY OF BRAZIL AFTER THE NEW
CORONAVIRUS PANDEMIC
Fernando Alcoforado*
Brazil is a country that has its economic system in a terminal stage due to the vertiginous
wave of mass unemployment and the general bankruptcy of companies aggravated by the
government's restrictive measures of economic activity to face the spread of the new
Coronavirus that is taking Brazil to the economic depression unprecedented in the history
of the country. The main internal problem in Brazil today is the stagnation of the economy
with its consequences related to the closure of industries and commercial activities and
services and, above all, to the mass unemployment of millions of workers that got even
worse with the spread of the new Coronavirus.
The crisis of the new Coronavirus shows that Brazil is threatened with having collapsed
its health system and unable to produce inputs for the manufacture of drugs, respirators
and even masks to protect health professionals and the population. Today, as in much of
the world, many governments lament the lack of a national development project that
makes the country self-sufficient because they have left the free market to make decisions
such as closing factories in the country and taking them to places where the margins of
profits would be higher, as is the case of China, India and Southeast Asian countries. This
stance was dictated by the vision that started to prevail in Brazil and in the world after
1990, which was that of globalization and the opening of markets according to the
neoliberal ideology.
It is evident the misunderstanding of the governments of Brazil from 1990 to the present
moment of adopting the economic policy of not producing locally, transferring it to places
where the profit margins would be higher, a fact that was a determining factor in the
decision not to invest in the production of materials and medical equipment in the country,
transferring it to countries with lower production costs, such as China. The result is being
catastrophic because there is a lack of supplies for the manufacture of drugs, respirators
and even masks to protect health professionals and the population. In Brazil, the situation
is deplorable because industry, science and national technology have been scrapped since
1990 with the adoption by the various governments of neoliberal policies that have
contributed to increasing technological and industrial dependence in relation to the
outside.
Due to the misunderstandings practiced by the different governments of Brazil since
1990, the country's Gross Domestic Product (GDP) will suffer a steep drop due to the
huge reduction in household consumption (C) and private investments (I) resulting from
the new Coronavirus and, also, export earnings (X) resulting from the drop in
international trade due to the new Coronavirus. It is worth noting that the Gross Domestic
Product (GDP) is calculated based on the sum of all its components: GDP = C + I + G +
X - M. In this formula, C corresponds to household expenditure on consumer goods
(consumption private sector), I corresponds to the expenditure of companies in
investment, either in capital goods, or in stocks of raw materials and products, G
corresponds to the expenditure of the State (federal, state and municipal governments) in
consumer goods (public consumption), X corresponds to export revenue and M to import
expenditure.
Based on this formula, it can be said that the resumption of GDP growth after the new
Coronavirus pandemic can only be achieved with the expansion of private consumption
(C), the increase in investment in productive activity (I), the increase in spending

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government (G), the increase in export revenue (X) and the reduction in spending on
imports (M). Therefore, in order to increase household consumption (C), it is necessary
to increase the wage mass of the population, whether by generating jobs and also by
distributing basic income to vulnerable and unemployed populations and to adopt a credit
policy that encourages consumer to buy. To raise the level of private sector investments
(I), it is necessary for the government to reduce the tax burden and implement a policy of
tax incentives and attractive interest for businessmen. Economic growth can also be
achieved by raising the level of exports and reducing imports with the policy of
substituting imported goods aimed at expanding economic activities. However, in order
to reactivate the economy after the new Coronavirus pandemic, the State must act as if it
were a locomotive capable of leveraging consumption in general and private investment.
In this sense, the State must increase the State's expenditure (G) with the realization of
massive investments in economic infrastructure (energy, transport and communications)
and social infrastructure (education, health, housing and basic sanitation). The State must
act as an inducer of the resumption of economic growth in Brazil.
To promote the reactivation of the Brazilian economy, the Brazilian government should
draw up an economic plan that contributes to the resumption of Brazil's development that
presents to the population and the productive sectors a perspective of overcoming the
current crisis and resumption of economic growth. The development plan should guide
and coordinate companies in the country that, organized in networks, and helped with
trade, technology and credit policies can successfully compete in the national and world
economy. The Brazilian government should consider as a number one priority to
reactivate the economy with the immediate execution of a broad program of public
infrastructure works (energy, transportation, housing, basic sanitation, etc.) with the
participation of the private sector to combat the current situation of mass unemployment
raising the levels of employment and income of families and companies to, consequently,
promote the expansion of the consumption of families and companies resulting,
respectively, from the increase in the salary mass of families and the income of companies
with investments in public works to make Brazil grow economically again. In addition to
the public works program, the Brazilian government should develop a broad export
program, especially in agribusiness and the mineral sector, the drastic reduction in bank
interest rates to encourage household consumption and investment by companies, the
reduction of the burden taxation, the freezing of high salaries in the public sector and the
cut of perks and public administration organs.
Therefore, there is an urgent need to make the Brazilian State take the reins of the national
economy, abandoning the failed neoliberal economic model to reactivate the Brazilian
economy and full employment, putting an end to the economic depression that will occur
during the spread of the new Coronavirus. The entire set of measures to reactivate the
Brazilian economy after the economic depression resulting from the fight against the new
Coronavirus must be complemented with measures to combat unemployment and
extreme poverty to avoid the social debacle. Given this perspective, what would be the
solution to alleviate unemployment and poverty in the current situation? The solution
would consist of the adoption by the federal government, state governments and
municipal governments of public policies aimed at the development of the social and
solidarity economy to alleviate unemployment and the implementation of basic income
or universal minimum income to alleviate the population's poverty. Without the adoption
of these measures, Brazil will inevitably be driven to political and social upheaval.
Regarding the Social and Solidarity Economy, it is important to note that it is a different
way of generating work and income, in several sectors, be it in the productive activity, in

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community banks, in credit cooperatives, in family farming cooperatives, in the question
of trade fair, in exchange clubs, etc. The Social and Solidarity Economy is an important
alternative for the inclusion of workers in the labor market, giving them a new
opportunity, through self-management. Based on the Social and Solidarity Economy,
there is the possibility of recovering bankrupt companies, and to continue them, with a
new mode of production, in which profit maximization is no longer the main objective,
giving rise to maximizing the quantity and the quality of work. The Social and Solidarity
Economy is a possible alternative to generate employment for workers who are mostly
excluded from the formal labor market and consumption. In France, for example, it
accounts for 10% of GDP and is responsible for 12.7% of that country's employment. The
Social and Solidarity Economy emerged in various parts of the world with practices of
economic and social relations that are promoting the survival and improving the quality
of life of millions of people.
In turn, the basic income policy or universal minimum income for the population is one
of the solutions to alleviate poverty. The cash transfer program, Bolsa Família, is an
example of the application of the basic income policy. Among the reasons for this idea to
become reality, lies in the fact that distributing money reduces crime, improves the health
of the population and allows everyone to invest in themselves. The adoption of the basic
income policy or universal minimum income for the poor population is one of the
solutions to alleviate poverty, since it would allow the poor to start having money to meet
their basic needs in terms of food, health, housing, etc. By having a basic income, the
poor population will be able to supply their basic needs by increasing consumption that
contributes to the reactivation of the economy.
From the above, actions aimed at reactivating the economy must be complemented with
actions aimed at combating unemployment and extreme poverty that have worsened in
Brazil with the fight against the new Coronavirus. These actions should be taken forward
when there is the eradication of the new Coronavirus from Brazil. As long as the virus is
present in the country, the Brazilian government must act to minimize the drop in
consumption by the population and companies by maintaining essential economic
activities by adopting measures to benefit the unemployed and the poor so as not to starve
to death and also for the benefit of micro, small and medium-sized companies in order
not to succumb to the crisis that is already happening at an insufficient level. Measures
for the benefit of the unemployed and the poor include transferring government income
to families and suspending payment of taxes for a specified period and granting low-
interest loans to companies with the counterpart of not firing employees during isolation
Social. This set of measures, which has been adopted in several countries of the world,
must be maintained as long as the social distancing of the population persists so as not to
aggravate their social conditions, especially of the most vulnerable populations, and the
economic conditions of micro, small and medium-sized companies. To cope with the drop
in tax collection by the government at all levels resulting from the reduction of economic
activities, the Brazilian government must allocate resources in the volume necessary for
state and city governments to face the problems with the health system and, also, the
social problems concerning the most vulnerable populations while the social isolation of
the population endures.
To finance all the actions necessary to reactivate the Brazilian economy and to fight
unemployment and extreme poverty, the Brazilian government could adopt two
strategies; 1) suspend for 5 years the payment of the internal public debt that corresponds
to 48% of the federal government budget or renegotiate with its creditors in order to

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extend its payment so that the government will have the necessary resources for
investments aimed at reviving the economy and combating unemployment and extreme
poverty; and, 2) use the international reserves of US$ 362.5 billion existing in February
2020. Without the adoption of this set of actions, Brazil will not resume its growth and
will inevitably be driven to economic ruin.
With Bolsonaro and his ministerial team in power and, above all, Paulo Guedes in charge
of the Brazilian economy, Paulo Guedes, who did not present before and after the
pandemic any economic development plan for Brazil, the country will be taken to
bankruptcy economic and political and social breakdown. The ministerial meeting on
March 22 shown on television demonstrated that Brazil is governed by a band of
irresponsible, ill-educated and incompetent people who act uncoordinated thanks to the
incompetence of the President of the Republic. Government uncoordination does not only
happen in the health area with its disastrous performance in the fight against the new
Coronavirus, but also in the whole government. In addition, at the ministerial meeting,
the attempt by some ministers to elaborate the program they called pro Brazil, which
would represent an inductive action by the federal government to reactivate the Brazilian
economy, was torpedoed by Paulo Guedes at the meeting which, driven by neoliberal
thinking , does not admit that the government takes a proactive attitude in promoting
national development.
* Fernando Alcoforado, 80, awarded the medal of Engineering Merit of the CONFEA / CREA System,
member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional
Development by the University of Barcelona, university professor and consultant in the areas of
strategic planning, business planning, regional planning and planning of energy systems, is author of the
books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem
Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os
condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de
Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora
Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos
na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social
Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG,
Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica,
Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate
ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores
Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no
Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba,
2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV,
Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua
convergência (Associação Baiana de Imprensa, Salvador, 2018, em co-autoria) and Como inventar o futuro
para mudar o mundo (Editora CRV, Curitiba, 2019).