Milei’s chainsaw inspires Bolsonaro to wield scissors in Brazil election

Two weeks before a tight presidential election, Brazil’s leading candidates have turned Javier Milei’s Argentina into a proxy for their own clashing economic visions.

Right-wing candidate Flávio Bolsonaro is holding up the Argentine president’s economic overhaul as an example of the fiscal discipline he says Brazil needs, wielding a pair of scissors as a more modest version of Milei’s famous chainsaw. 

Leftist President Luiz Inácio Lula da Silva’s campaign is making the opposite case, pointing to Argentina’s economic slowdown and labour-market strains as a warning of what could await Brazilian workers if Bolsonaro wins.

Milei has played an outsized role in Brazilian politics since he surged to Argentina’s Presidency three years ago. His prescription of fiscal austerity and pro-market reforms turned him into a natural economic rival with Lula, who has long viewed government spending as crucial to growth.

Lula’s backing of Milei’s opponent in the 2023 election turned them into political foes as well, and the Argentine returned the favour this year, launching a blitz of attacks on the Brazilian incumbent during a Bolsonaro campaign event that sparked a diplomatic row between the nations.

The latest chapter of their dispute has played out across investor forums and digital advertisements, with both campaigns betting that Milei’s “shock therapy” experiment can help define the choice facing voters in Latin America’s largest economy. Polls show the race is statistically tied ahead of the October 4 first round vote, which will likely be followed by a run-off three weeks later.

“We will draw inspiration from what Javier Milei’s government has done in Argentina,” Daniella Marques, the top economic adviser to Bolsonaro’s campaign, said at an event last week. “Milei is a great example when it comes to restoring investment capacity, reducing bureaucracy and cutting taxes.”

It was a message aimed at investors that have grown increasingly anxious over Brazil’s deteriorating fiscal situation under Lula, and who remain eager for details on how Bolsonaro would address it. 

But Lula’s Workers’ Party (PT) pounced on the line, publishing a video to social media that cast substantial job losses and company closures in Argentina as consequences of Milei’s economic model. 

Milei’s ability to wrestle inflation down from the triple digits while eliminating the fiscal deficit, slashing regulatory red tape and approving a major labor reform have made him a favourite of investors.

He’s also a go-to example for conservative candidates pitching similar policies – and winning elections – across the Americas. Bolsonaro is the latest: Throughout the campaign, he’s advocated for a tesouraço, or big cut, in Brazilian spending.

“If Argentina had the chainsaw, Brazil will have a big pair of scissors for taxes, bureaucracy and corruption,” Bolsonaro said after meeting Milei earlier this year.

But the flip side is now providing ammunition for opponents like Lula.

Argentina’s economy contracted in the second quarter and progress against inflation is now running into voter frustration with unemployment in a nation that’s lost 246,000 private sector pay-roll jobs – about four percent of the total – since he took office.

Milei’s approval sat at 38 percent in August, while some 70 percent of Argentines described the nation’s job market as poor in an AtlasIntel poll for Bloomberg News.

Lula allies have also used that to highlight his flagship campaign proposal, a reduction in weekly working hours. The PT contrasted the plan with a provision in Milei’s labour reform that sought to make the work week more flexible: The change allows employees to work as many as 12 hours per day, up from a previous limit of eight, with shorter days or time off later.

Bolsonaro has advocated for more flexible employment rules to counter Lula’s proposal, arguing that would give workers more freedom to negotiate at a time when many are choosing app-based gig work over traditional jobs.

The right-wing senator and his allies successfully thwarted a vote on Lula’s labour reform plan ahead of the election, preventing passage of a proposal that earns high marks from Brazilian voters.