Economist GMAT Reading Comprehension Challenge #21

Economist GMAT Reading Comprehension Challenge #21

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Article: Jair Bolsonaro tackles Brazil’s pensions problem

Link: https://www.economist.com/the-americas/2019/02/23/jair-bolsonaro-tackles-brazils-pensions-problem

Jair Bolsonaro won...“change our history”.

The success of Bolsonaro's presidency depends on reviving the Brazilian economy which would require reforming the pension system.

Mr Bolsonaro...by killing old people.”

Although Bolsonaro has signaled that he supports pension reform by appointing an investment banker and determined modernizer as his economy minister as a congressman he voted against pension reform.

The package...at least 30 years.

The pension reform package, which would drastically increase retirement age, is even more aggressive than the one that Bolsonaro voted against as a congressman as it reduces the transition period from 21 to 12 years.

The plan would raise ...private-sector workers.

The plan would also raise contributions paid by bigger earners, limit collecting of multiple pensions, and reel in public sector pensions so that they would be more in line with pensions in the private sector.

If congress enacts...a Brazilian bank.

The plan would generate substantial savings and is said to reduce imbalances significantly.

It must now get through congress...shield him from prosecution.)

The plan requires a constitutional change and with that a 3/5 majority in congress which it is unlikely to muster without changes that would potentially decrease the expected savings substantially.

Mr Bolsonaro has advantages...pensions reform.

Bolsanor's plan has hope as his allies lead both houses of congress and most people in congress as well as the broader public support pension reform.

But, as Mr Jereissati admits...majorities in congress.

Although most people support pension reform they don't necessarily agree with all of the changes proposed in the Bolsonaro's plan.

His two-month-old presidency...his cabinet job.

A scandal in his party has made it harder for pension reform to pass.

Such dramas will...Moody’s says.

The odds are in favor of pension reform and although it will likely be a diluted version of the current plan, according to Moodys, investors would be re-assured.

Mr Guedes’s ambitions.. resist lower import barriers.

The minister for the economy has further plans for modernizing the Brazilian economy including simplifying the tax code, reducing barriers to imports, and privatizing state owned enterprises but faces opposition in his own cabinet.

Right now...believe it.

The government is aggressively promoting the benefits of pension reform of which Brazilians have generally been skeptical.

Main Idea

Although Brazilians have traditionally been skeptical of its benefits, much needed pension reform is likely to pass and even though it will be in a diluted form, according to experts, it will still be enough to re-assure investors and help improve the Brazilian economy.

Primary Purpose

To discuss the Brazilian government's push for pension reform.

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