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Brazil Presidential Election: looking ahead after the results

October 29, 2018

Bolsonaro as President: his policies for science and technology, innovation, intellectual property, health and compliance.

The results of the Brazilian Presidential elections this Sunday confirmed the victory of Jair Bolsonaro who will be in government from January 1st, 2019 until 2022. The candidate of the Liberal Social Party (PSL) won 55.13% of total votes against his opponent, Fernando Haddad, candidate of the Workers’ Party (PT), who only received  44.87%.

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This Client Alert was prepared by Licks Attorneys Government Affairs & International Relations  group to provide information on Bolsonaro’s proposals in the areas of science and technology (S&T), innovation, intellectual property (IP), health and compliance, so as to draw out what to expect in the next four years.

WHO IS JAIR BOLSONARO?

Bolsonaro is a former military officer who entered politics in 1988, when has was elected to the Rio de Janeiro State Assembly. He has been a member of the House of Representatives since 1991, having served 7 consecutive terms. He was the candidate who received the most votes in Rio de Janeiro in the 2014 last elections. Bolsonaro is known for his far-right political views.

HOW WILL BOLSONARO’S GOVERNMENT LOOK LIKE?

In his government program, Bolsonaro proposed reducing the number of ministries in Brazil. On October 5, he stated that he intends to have 15 ministries at most – there are currently 24. So far, however, he has not said how he will get to that number. According to him, he wants a government with “ministers that can represent the interests of the population, not those of the parties”. During his campaign he said he wanted to extinguish the Ministry of Cities, the Ministry of Environment (which would become part of the Ministry of Agriculture), and the Ministry of Culture (which would become part of the Ministry of Education).

As for the economy, Bolsonaro had plans to merge three ministries (Finance, Planning and Trade and Industry) in one called Ministry of the Economy. The new ministry should hold the functions of the former ministries, as well as those of the Secretary of Investment and Partnerships, and financial institutions should be subordinated to it. After a meeting with industrialists he said he could change his mind about the merge.

PROSPECTIVE MINISTERS

Onyx Lorenzoni – Chief of Staff

Lorenzoni, a federal deputy reelected on October 7, is one of Bolsonaro’s main allies. He was responsible for contacting the congressmen to gain support to his candidacy in Parliament.

Paulo Roberto Guedes – Ministry of Finance

Guedes is a University of Chicago-trained economist. He is the co-founder of Banco Pactual, an investment bank, and founding partner of the BR Investments group. He also helped to create the Millenium Institute and the Brazilian Institute of Capital Markets (Ibmec). Guedes was one of Bolsonaro’s main advisers during his campaign and responsible for the economic section of the candidate’s government plan. He proposed privatizing all state firms and implementing an ambitious tax reform.

Marcos Pontes – Ministry of Science and Technology

Pontes was the first Brazilian astronaut to go into space in 2006. He holds a degree in aerospace technology from the Academy of the Armed Forces, in aeronautical engineering from the Technological Institute of Aeronautics (ITA) and a master’s in engineering systems from the US Naval Postgraduate school.

Nelson Teich – Ministry of Health

Teich is a doctor and businessman in Rio de Janeiro. He is the President of the Integrated Oncology Clinics (COI) and Executive Director of MedInsight, consulting and research company.

Names of other potential ministers

  • Ministry of Justice: Antonio Pitombo, renowned criminal lawyer
  • Ministry of Defence: General Augusto Heleno Ribeiro Pereira
  • Ministry of Education: Stavros Xanthopoylos, Director of International Relations of the Brazilian Association for Distance Learning (ABED)
  • Ministry of Transport: army reserve general Osvaldo Ferreira, who collaborated to Bolsonaro’s campaign on infrastructure proposals
  • Ministry of Agriculture: Luiz Antonio Nabhan Garcia, President of the Rural Democratic Union (UDR)

SCIENCE & TECHNOLOGY (S&T)

Bolsonaro’s government program proposes a liberal strategy to dedicate investments to S&T. He defined the current policy as “a centralized strategy, commanded in Brasilia and exclusively dependent on public resources”. Looking up to successful cases, the program proposes to replicate S&T policies from countries such as Japan, Israel, South Korea and the United States.

Bolsonaro has promised to set a budget of BRL 10 billion (approximately USD 2.7 billion) exclusively dedicated to investments in S&T for the Ministry of Science, Technology, Innovation and Communication (MCTIC). The budget approved by the National Congress for 2018 was BRL 4.6 billion (approximately USD 1.25 billion). According to him, Brazil should follow the example of developed countries that often allocate 3% of their GDP in S&T investments. The goal is to reach this figure by the end of his presidential mandate in 2022.

He defends stimulating the development in new technologies and enabling an environment that is favorable to innovation. For this purpose, he believes the teaching of entrepreneurship in universities should be stimulated and technological hubs created, encouraging researchers and university scientists to seek partnerships with private companies to “transform ideas into products”.

He thus wishes to value national talents and attract investments from abroad based on commercial opening in order to generate new technologies, jobs and income. Bolsonaro also stresses that subnational regions in Brazil should be stimulated to promote their comparative advantages. For example, the Northeast region has “great potential” to foster the development of solar and wind energy.

More particularly, Bolsonaro’s government program does not explicitly mention Intellectual Property (IP). However, during a talk at a prominent Brazilian financial company, General Hamilton Mourão, Brazil’s elected Vice-President, criticized how IP is dealt with in the country. He did not justify his statement, nor did he put forth any idea on that issue.

HEALTH & THE PUBLIC HEALTHCARE SYSTEM (SUS)

In his government program, Bolsonaro states that he will not modify the budget dedicated to public health, but will look to increase the efficiency of spending – in other words “do more with the same resources”.

Bolsonaro suggested creating a program of “universal accreditation of doctors” through which any doctor could be called and attend patients under the Public Healthcare System (SUS). The whole health force could be used to handle the lack of doctors, guaranteeing access and avoiding judicialization. This will enable people to have greater power of choice, dividing efforts between the public and private sectors. Bolsonaro’s government program suggests that all doctors should treat patients subscribing to any health plan.

He also defended the institution of career state doctors to deal with the lack of practitioners in some of the country’s most distant regions lacking practitioners. They would benefit from employment stability if they settled in “more distant” localities.

Bolsonaro proposes the creation of an electronic medical record. Clinics and hospitals must go digital registering data on attendance and patient satisfaction. The registration of patients reduces costs as they facilitate treatment in the future by other doctors in different health units.

Amongst the health promotion policies, Bolsonaro mentioned the training of community agents to “help with the control of frequent illnesses, like diabetes and hypertension”, as well as the inclusion of professionals in the area of physical education in the Health of the Family Program to combat sedentarism and obesity.

Bolsonaro affirmed he would fight corruption inside the Ministry of Health. To contain the drain caused by corruption will provide the Ministry with resources for investments. Bolsonaro’s elected government will invest in audit and data gathering to identify where there is underfunding as well as waste.

COMPLIANCE

In his government plan, Bolsonaro affirmed that “transparency and the fight against corruption are unnegotiable goals”. For this purpose, he proposes the retrieval of the ten measures against corruption presented by the Federal Prosecutor’s Office in 2016 as a result of the Car Wash Operation. Only part of them were approved by the House of Representatives, and even those are awaiting voting in the Senate.

Bolsonaro also suggests the “disarticulation” of federal structures, indicating he would not make political indications for federated state institutions. He projects to cut the number of ministries and introduce “zero-based budgeting”, to force ministers to justify their demands for resources before spending.

Further, he declared his support to the Car Wash Operation and considers it is fundamental to the fight against impunity in the country. He proposed lifting the secrecy of the Brazilian Development Bank’s (BNDES) transactions.