By Leonardo Attuch
Since Health Minister Luiz Henrique Mandetta has just announced that Brazil will reach its peak of coronavirus cases in April and this will cause the health system to collapse, it is reasonable to assume that economic activity will remain at a standstill for 30-60 days or more.
Most small and mid-sized entrepreneurs such as bar, cafe, shop and restaurant owners, do not have working capital. Therefore it is also reasonable to assume that there will be an unprecedented breakdown in the Brazilian economy which will cause massive layoffs of workers and service providers.
In this chaotic scenario, entrepreneurs who insist on keeping their businesses alive will have to liquidate their savings, their real estate and financial assets, including investments in the stock exchange, which has already fallen by more than 40% this year. This will lead to further price devaluations in stock and real estate.
With two or three months of paralyzation, GDP growth could drop at least 10% this year and this could cause unemployment to rise from the current 12% to 20% or more. This figure does not even include the growing informal sector, the underemployed and people doing precarious work.
There is a consensus forming that Brazil has a sociopath in the presidency, and it is reasonable to assume that there will be no level coordination between the federal government, states and municipalities, to minimally organize an emergency plan to fight hunger, which will inevitably return with full force.
Hunger hurts. And the natural instinct of the human being is to fight for his own survival. Economic chaos will inevitably lead to social chaos and increased urban violence in a society that is already one of the most unequal in the world. What lies ahead, therefore, is a catastrophe.
I hope I’m not being overly alarmed, but Brazil looks like it is about to face a genocide that will be caused by a virus, hunger or violence. This is why it is fundamental that we stop Bolsonaro as soon as possible and create an emergency plan of action together with all of Brazil’s social and democratic forces.
Leonardo Attuch is a writer, journalist, and editor in chief of Brasil247. Translated by Brian Mier. Photo: Isac Nóbrega/PR
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