Newspaper article St Louis Post-Dispatch (MO)

Brazil's Crisis Is Stalling Economic Reforms Seen as Crucial

Newspaper article St Louis Post-Dispatch (MO)

Brazil's Crisis Is Stalling Economic Reforms Seen as Crucial

Article excerpt

SAO PAULO * Work longer hours. Get fewer benefits. Retire years later. Those are the ingredients of the bitter medicine Brazilians are being asked to swallow as a cure for the country's moribund, overregulated economy.

It would be a tough sell under any conditions, but it's even harder because few trust the politicians trying to pour it down their throats. And a wave of corruption scandals that threaten to topple even the president could water down, if not sink, any cure.

President Michel Temer finds himself in a dilemma: He needs the economic reforms to boost his credibility and perhaps even to avoid being ousted over a flurry of corruption allegations.

But his credibility and that of his allies is so low that few Brazilians trust them to do what's necessary to expand the job market and get people back to work.

Congress and action on the reforms has all but come to a halt in recent weeks after a recording emerged in which Temer apparently endorses the payment of hush money to a former lawmaker imprisoned on money laundering and corruption charges.

He has also been accused of accepting bribes. He denies wrongdoing, but he could soon face formal charges.

The country's political and business class has been distracted, when not terrified, by a stream of revelations about bribery, kickbacks and general corruption centered on the national oil company, Petrobras, that has led to the jailing of dozens of the country's elite. The politicians also face an impending deadline: elections in October next year.

"The only thing that appears certain is that the reform agenda has been compromised," said Silvio Campos Neto, an economist at Tendencias, a Sao Paulo-based consultancy. "The survival of this government is uncertain, and this has a negative impact on the resumption of investments."

Business leaders and top economists argue that reforms are needed to convince investors to start pouring money again into Latin America's largest economy, which is tentatively emerging from a deep recession. …

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