(Bloomberg) -- Meet the Brazilian presidential candidate who wants to raise taxes on the wealthy, expropriate oil fields, and undo government spending caps.
Ciro Gomes has no qualms about pushing all the wrong buttons for the financial markets, because he's confident Brazilian voters still believe in a strong state despite the unprecedented recession and scandal that characterized the Workers' Party's final years in power. In fact, he says, he wants to shock voters with the truth now so that there'll be less resistance to his plans when he's president.
A former two-time presidential candidate, minister, state governor, mayor, state and federal deputy, Gomes is billing himself as the clean and competent candidate who believes inequality lies at the root of Brazil's economic and political woes. He rails against the fact that five families reportedly have the same wealth as 100 million Brazilians. And while reluctant to call himself a leftist -- and eager to point to his pro-business record -- he believes a hands-off approach to running the economy won't address Brazil's problems.
"Brazil has the world's most brutal system of capital concentration," he said. "And laissez-faire isn't going to tackle that."
Tackling Rent-Seekers
Speaking to Bloomberg News in Brasilia ahead of the launch of his election campaign, the 60-year-old sketched a chart on a notepad detailing why President Michel Temer's attempts to stabilize the public finances were doomed to failure. Once the country's youngest finance minister -- albeit for a little under four months in 1994 -- Gomes reeled off statistic after statistic to support his argument that Brazil was being "bled dry by a rent-seeking plutocracy."
Gomes proposes a radical shake-up of the Brazilian tax system, rolling back corporate tax breaks and hiking duties on the wealthy. To tackle Brazil's ballooning pension deficit -- a task that's proved beyond the capabilities of the Temer administration -- Gomes wants to cut civil servants' privileges.
‘A Coup d'Etat'
All oil fields sold since the impeachment of former President Dilma Rousseff -- which Gomes described as a "coup"-- would be expropriated, but within a legal framework and with appropriate compensation. More than 40 blocks have been sold under the Temer administration for companies including ExxonMobil Mobil Corp., BP Plc, Royal Dutch Shell Plc and Statoil ASA. Licenses for only six blocks bought by Exxon and its partner Petrobras cost more than $1 billion in signing bonuses.
"I am declaring that as my country suffered a coup d'etat, I consider these sales illegitimate," he said, adding that he was offering total transparency on this proposal "so that no one need fear me."
The privatization of Eletrobras, Latin America's largest utility, is currently under discussion in Congress. If it's approved, a Gomes government would return it to state hands.
But he insisted that investors alarmed by his proposals look to his record as governor of Ceara, Brazil's fourth-largest state, as mayor of Fortaleza, its fifth-largest city, and his stint as finance minister.
"I didn't run a deficit for a single day," he said. "I carried out perhaps the most brutal opening to trade in the country."
Campaign Strategy
As a member of the relatively small PDT, Gomes said he was talking to other parties about possible electoral alliances. He argued that such deals would be "useful but not essential," given a more level playing field due to the growing reach of social media. He also expects 60 percent of the incumbents in Congress to be voted out.
"I'm not prepared to sell my soul on the road to becoming president of Brazil," he said.
Gomes is one of the candidates who looks set to benefit if former President Luiz Inacio Lula da Silva, the current front-runner in opinion polls, is barred from running, as seems likely. A CNT/MDA poll published Tuesday showed Gomes garnering 4.3 percent of voter intentions with Lula in the race, and 8.1 percent without. That is more than treble the support the market-favorite, Sao Paulo state Governor Geraldo Alckmin, has.
But Gomes says that all the surveys show at this stage is the drop in support for Brazil's political establishment. Brazilians want change, a candidate with experience and a clean record, he said.
"That guy's me."
--With assistance from Samy Adghirni and Sabrina Valle
To contact the reporter on this story: Bruce Douglas in Brasilia Newsroom at bdouglas24@bloomberg.net.
To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Raymond Colitt, Robert Jameson
©2018 Bloomberg L.P.
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