Bolsonaro's legal situation, Lula's health and diplomacy: the keys to 2024 in Brazil
Brazil is closing out a 2024 marked by economic, environmental and security challenges and by the consolidation of its foreign policy. Also in the foreground were the G20 summit that the country hosted, the judicial proceedings of former President Jair Bolsonaro, the health of President Luiz Inácio Lula da Silva and the fiscal situation. What happened this year and what lies ahead?
Bolsonaro, Lula, the economy, the environment - with extreme disasters of fires and floods - and security are the issues that have marked Brazil in 2024 and that are expected to also loom large in the country's outlook next year.
On the positive side, 2024 ends with at least two pieces of good news for the president of Brazil, Luiz Inácio Lula da Silva.
On the one hand, the president recovered satisfactorily from the operation for an intracranial hematoma, a consequence of the fall he suffered last October. On the other hand, Congress approved in the last session of the year the federal government's spending cuts package to balance public accounts. This is a good result in an uncertain economic scenario, with the dollar breaking all records and reaching the highest level in history and a new failure to meet the inflation target, as recognized by the Central Bank.
G20 and Mercosur: foreign policy goals
On the international front, Lula can claim several successes. He secured the support of the major powers to launch the Global Alliance against Hunger and Poverty during the G20, held in November in Rio de Janeiro. This is a mechanism that aims to eradicate hunger by 2030 and reduce inequalities throughout the world.
In addition, the Brazilian president managed to articulate a broad consensus around the final declaration of the G20, despite the initial opposition of the president of Argentina, Javier Milei.
Ultimately, his contribution was decisive in reaching the signing of the free trade agreement between the European Union and Mercosur, after a long and difficult negotiation that lasted 25 years. However, in order to enter into force, the agreement will have to be ratified by at least 15 member states, representing 65% of the population of the 27-country European bloc.
Bolsonaro's problems
The judicial situation of the far-right Jair Bolsonaro had a significant influence on the Brazilian political scene this year and will undoubtedly have next year.
The former president is accused, among other things, of an attempted coup after losing the elections in 2022 and of participating in the planning of the assassination of Lula and his number two, Geraldo Alckmin. Several legal experts believe that he could be charged or even imprisoned in the first half of 2025.
His situation has been complicated by the imprisonment of General Walter Braga Netto, who was Minister of the Presidency and Defense during his mandate and even ran alongside him for the post of vice president in 2022. The general has chosen to defend him the lawyer José Luís de Oliveira Lima, who negotiated the plea bargain of several politicians prosecuted in the Lava-Jato case. For several analysts, this means that Braga Netto could try to get his sentence reduced in exchange for providing the Federal Police with compromising information for the far-right former president.
Bolsonaro, meanwhile, has repeatedly called for amnesty in recent interviews with the Brazilian press in order to, in his words, “pacify” the country.
His appeal is directed to Lula and Judge Alexandre de Moraes, who is investigating the case. He also does not rule out seeking refuge in an embassy, considering himself “a victim of persecution.” The former president is politically disqualified and will not be able to stand for election until 2030. He has repeatedly promised to reverse this situation, although he has not detailed how he plans to get the ruling of the Superior Electoral Court annulled.
2025, a turning point for Lula
Given this scenario, 2025 presents several challenges for Lula, who completes two years in power on January 1. It is the halfway point of his mandate and also a delicate moment.
The third year usually represents a turning point. Since the re-democratization of Brazil, all presidents have faced deep crises during their third year in office. Looking at the recent history of the Latin American giant, the way in which the leaders faced moments of adversity had a direct impact on their governments in the short or long term.
To cite two examples, in the late 1980s, Fernando Collor de Mello inherited hyperinflation from José Sarney, which forced him to deal with a deep economic crisis in his third year in office. The result was his impeachment in 1992.
For her part, Lula's successor, Dilma Rousseff, faced widespread demonstrations and deep social discontent in 2013, in the third year of her first term. The rampant economic crisis and lack of support in Congress undermined her power and culminated in another impeachment in 2016. Rousseff did not even make it to the third year of her second term.
'Biden effect'?: doubts about Lula's health
Lula will have to deal with the curse of the third year, which is usually the time when a president needs to show where he intends to take the executive's action.
Head surgery has undermined the image he tries to project of a strong and charismatic politician. At 79 years old, Lula cannot avoid a kind of Brazilian 'Biden effect'. Despite the official photos, in which he is shown doing sports activities and despite his wife Janja, 21 years younger, it is impossible to ignore an important detail: in 2026, when the next presidential elections will be held, Lula will be 81 years old. If he were to win again, he would end a hypothetical fourth term at 85 years old.
Behind the scenes, there is already talk of succession, although there is still no heir in sight. Even the former president of Uruguay, José Mujica, recently regretted that Lula, at almost 80 years old, does not have a successor. “This is Brazil’s misfortune,” he said in an interview at the end of November.
Starting in January, Lula intends to focus his government’s actions on the economy and public security. However, 2025 will inevitably be a pre-election year, in which both his allies and his detractors will try to find out whether he plans to run again in 2026.
In addition, Lula will have to face an increasingly hostile Congress in an unfavourable scenario, in which the Workers' Party does not have a majority. Since the impeachment of Dilma Rousseff, Congress has concentrated more and more power in its hands, to the point that several political analysts believe that Brazil is moving inexorably towards parliamentarism.
Maintaining social spending vs. tightening the belt
On the economic front, 2025 is the year in which the government hopes to put its public accounts in order to regain the confidence of the markets, which have been frightened by Lula's social spending.
The main instrument will be the fiscal package that the government has been negotiating for months with various political parties. Presented at the end of November by the Minister of Finance, Fernando Haddad, this set of measures foresees a significant cut in spending that, in theory, will allow savings of up to 70 billion reais (11.13 billion dollars) in 2025 and 2026.
The main cuts will affect the annual growth of the minimum wage, which must remain below 2.5% and will not be proportional to the inflation rate, as has been the case until now. In addition, control mechanisms are being created to avoid fraud with the Bolsa Familia, the income transfer program created by Lula in his first term.
The military will also be affected: the minimum retirement age, currently set at 50, is to be raised and a minimum reserve age will also be established. In the fiscal field, the Executive wants to eliminate taxes for workers who earn less than 5,000 reais per month (822 dollars) and raise them for those who earn more than 50,000 reais per month (8,228 dollars).
Congress approved this package in the last session of the year, although with modifications that have distorted the original project of Minister Haddad and that may reduce the amount of savings that the Government hoped to achieve by the end of the legislature.
The Executive will probably not succeed in reducing the exorbitant salaries of some positions in the public sector. In addition, the Continuous Payment Benefit, a subsidy for people with disabilities and elderly people in vulnerable situations, will be practically maintained without major cuts.
Despite this effort, the market reaction has not been as expected: the dollar rose to 6.30 reais and the Central Bank was forced to intervene with auctions to contain the rise of the currency. It should be remembered that the Brazilian Stock Exchange has accumulated the largest flight of foreign capital in eight years. Investors from other countries had already withdrawn 25.9 billion reais (4.285 billion dollars) from the Brazilian Stock Exchange by the end of November, according to data from the consulting firm Elos Ayta.
As usual, the left-wing president is optimistic. “Everything we planned to do so far has been accomplished. We created the new Growth Acceleration Programme (PAC) and launched all the programmes that needed to be launched. I have been telling my ministers: we have already sown. Now, in 2025, it is harvest year. Let us begin to reap what we have sown. It is a commitment of honour on my part,” he says.
Environmental challenges in a megadiverse country
Throughout 2024, deforestation in the Amazon has decreased by 30% and in the Cerrado by 25%, according to official data. The Executive highlights that, “as a result, there was a reduction in greenhouse gas emissions of 400.8 million tons of CO2e due to deforestation in the Amazon and the Cerrado compared to the 2021/22 cycle.” At the same time, extreme weather events such as drought and floods worsened. Many experts point out that they are caused by climate change and that they have become a chronic problem for Brazil.
In 2024, the Pantanal and the Amazon recorded the worst fires of the last two decades, according to data from the European Copernicus Observatory. This agency estimates that, between January 1 and September 19, 2024, Brazil emitted 183 megatons of carbon into the atmosphere.
According to the Institute for Man and the Environment of the Amazon (Imazon), forest degradation in the Amazon has reached record levels in 2024. Between January and September of this year, 26,246 square kilometers of forest were lost, an area equivalent to the whole of Haiti.
The final declaration of the G20 Leaders' Summit reaffirmed the commitment of the group's countries to intensify efforts to guarantee environmental and climatic sustainability and to face the "challenges arising from climate change, loss of biodiversity, desertification, degradation of oceans and soils, droughts and pollution."
Apart from these declarations of principles, it is not clear how the Lula government intends to fight against environmental crimes that threaten Brazilian biomes. The artificial intelligence platform PrevisIA, from the Imazon research institute, predicts that 6,531 square kilometers of forests will be destroyed in 2025 if the areas most at risk of deforestation in the Amazon are not protected.
On more than one occasion, Lula has been criticised for the discrepancy between his pro-environmental discourse and his insistence on exploiting oil and gas at the mouth of the Amazon River, in the so-called 'equatorial margin'. In September of this year, he warned that, without new oil exploitation fronts, Brazil would fail to collect some three trillion reais (about 490 billion dollars) in taxes and royalties in the period between 2032 and 2055.
“This is the biggest inconsistency of the current government. Lula positions himself in the international arena as a climate leader and, in fact, has assumed a leadership role in this area. At the same time, a part of his government openly talks about becoming the fourth largest oil exploiter in the world and wants to open oil exploitations in sensitive places, such as the equatorial margin of the Amazon. “These are two incompatible roles: either you are a climate leader or you are the fourth largest oil producer in the world,” says Stella Hershman, a climate policy expert at the Climate Observatory.
Public safety, the unresolved crisis
Rio de Janeiro, Brazil's most touristic city, has 10 shootings per day, or, in other words, 4,000 armed attacks have been recorded so far this year. Nationwide, Brazil recorded more than 26,000 intentional homicides from January to November 2024, according to federal government data. At the same time, police lethality increased by 98% in the state of São Paulo, governed by an ally of Bolsonaro, Tarcísio de Freitas, who is in favor of using a heavy hand against crime at any price.
Since the end of 2023, several of Lula's ministers have warned him about the risk of not prioritizing the issue of public safety.
In October, Lula met with Brazilian governors and proposed a major pact on public security, which should be accompanied by various measures to encourage greater integration between the security forces to fight violence.
Along with the economy, security is considered by government advisers to be a crucial issue for improving Lula's approval rating. It remains to be seen how Lula intends to implement the security pact and, above all, with what budget, in a year marked by cuts.
