Effects of COVID-19 on the economy of the bahian semiarid: current dynamics and future implications

Abstract

This work evaluates scenarios for the semi-arid region of Bahia, in the process of recomposition of the Brazilian economy, after the health crisis of the new coronavirus (Covid-19). The study starts from the understanding that it is inevitable to adopt policies to expand public spending to flatten the recession curve without aggravating the infection curve. Taking this understanding as a reference, the basic hypothesis is that the need to rebalance public accounts in the long run, implied by social isolation measures, will lead governments to reduce the state's participation in the economy, compromising the poorest regions. As public administration is the main segment of economic activity and income transfer programs are at the basis of the economic dynamics of municipalities in the semi-arid region of Bahia, future adjustment policies will jeopardize the region's development, aggravating regional imbalances and social inequalities. It concludes with unfavorable scenarios for the Bahian semiarid, due to the loss of economic dynamism.