Philipp Schiemer
The Brazil head of Mercedes-Benz misses economic reforms and also thinks that the Mercosur agreement will no longer come about.
(Photo: Bloomberg)
Mr. Schiemer, Brazil has become the epicenter of the global pandemic. Does President Jair Bolsonaro’s government fail? the government leaves much to be desired. The constant political disputes are also unsettling. This affects the credibility of Brazil. But with all justified criticism – the government also does many things right.
For example, she quickly and efficiently organized emergency financial aid for the poor. That was extremely important for social peace. It has made labor laws more flexible so far that mass layoffs have not occurred as in the United States. In the meantime, the government has been arguing again and again.
Is democracy in Brazil at risk? I don’t want to speculate.
However, the government wants to go back to a state-controlled economic model, such as that under the military dictatorship. Populism has increased throughout the world in the crisis because it promises simple solutions. But so far I have only heard that a new economic system is not really being pursued in this government.
Can government and economy reforms be expected from this government? The reforms are on hold. The crisis now would be the right time to slaughter holy cows. The chances for reform continue to exist. There is a lot going on. Especially since Congress also wants the reforms.
The German economy relied on Bolsonaro because of the reform agenda. Is she disappointed now? I wouldn’t speak of disappointment. We know how difficult the political process in Brazil is. However, I would hope that she spends more energy on the reforms instead of constantly spending herself on side-war sites.
The slowdown on the reform agenda is already harming Brazil, and there is no question that Brazil and Latin America have become significantly less attractive in the world. Asia, the USA and Europe are more important. But the relegation process started years ago under President Dilma Rousseff.
What does that mean for the German economy in Brazil? The corona crisis will set many companies back for years. This is a blow to the neck, especially for companies in the manufacturing and consumer sectors.
It is said that many German companies in Brazil have not made any profits for years, which is certainly true for some industries. If you look at the balance of payments of the automotive industry, for example, the parent companies have been transferring massive amounts of money to keep the location going.
German industry and politics were the main drivers behind the agreement between Mercosur and the EU. Does the treaty still have a chance to be ratified? I think that is extremely difficult. Especially since the government in Argentina is again thinking more nationalist. And there, the need for reform is significantly higher than in Brazil. As Brazil, I would rather orientate myself towards the USA, Europe or China, Mr. Schiemer, thank you very much for the interview.
More: Corona and an overwhelmed president: Brazil is becoming less important for German companies