SAO PAULO (AP) — Since finishing behind Flávio Bolsonaro in the first round of Brazil’s presidential election, President Luiz Inácio Lula da Silva has leaned into populist promises to boost his chances of winning the runoff.
Should he win Sunday's vote, turning those promises into reality would come at a heavy cost to Brazil.
Lula, 80, is seeking his fourth nonconsecutive term against 45-year-old Bolsonaro, an ally of U.S. President Donald Trump. A
defeat for the incumbent would mean a big boost to Trump's influence in the region and a return to office for the right-wing Bolsonaro family.
The promises made by Lula as he attempts to close the gap with Bolsonaro include:
Legislation to reduce the country’s workweek from six days to five and weekly working hours from 44 to 40 without reducing pay was approved by Congress 10 days before the runoff. Bolsonaro endorsed the measure late in the campaign. Many business leaders say cutting working hours without corresponding productivity gains raises labor costs, hurts small businesses and risks fueling inflation and informal employment.
In September, Lula announced a 15% increase in payments under Brazil’s main welfare program, Bolsa Família, which bases benefits on family size and the number of children. The increase took effect this week, days before the election, and will benefit nearly 50 million people. Critics describe permanent government-funded income transfers as a classic populist tool for securing voter loyalty. The government said the increase will cost taxpayers 5.8 billion reais ($1.2 billion) for the rest of the year.
Lula on Wednesday endorsed credit relief and tax incentives for small businesses, giving them access to low-interest government loans through public banks and allowing them to renegotiate some of their debt. The government estimates the program will cost 3 billion reais ($600 million) over the next three years.
He also introduced a national debt refinancing program aimed at clearing default records for millions of low-income Brazilians. Opposition analysts and market commentators describe the state-backed debt forgiveness and subsidized renegotiations as short-term relief that fails to address gaps in financial literacy.
Lula issued some executive measures aimed at curbing fuel costs, including a decree that eliminates federal taxes on the import and sale of gasoline for a 30-day period, with the option for further extensions. These moves increased federal tax relief on gasoline and subsidized diesel costs for importers. The government also extended tax exemptions and expanded support for ethanol to keep alternative biofuels competitive at the pump. The estimated cost of the measures is 5.2 billion reais ($1 billion), Brazil's government says.
Lula also is sending to Congress a bill to establish zero-fare public transportation on weekends. Experts say the cost of such an initiative depends on the chosen model and ranges from 5 billion to 16 billion reais ($1 billion to $3.2 billion).
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