Bolsonaro’s rejection rates drop, but Brazilians demand more emergency aid

The rejection rate of the Jair Bolsonaro administration fell by 5 percentage points in October — to 31 percent, the lowest level since May 2019 — according to a new XP/Ipespe poll. The share of the population that evaluates the administration as “good/great” remained at 39 percent. Still, this is the second-highest approval rating of the government since February 2019, one month into President Bolsonaro’s term. 

The improvement in the administration’s popularity levels came off the back of improved prospects in a series of indicators: 40 percent of voters perceive news concerning the government as “negative,” down from 63 percent in May. 

Also, less Brazilians believe corruption will increase over the coming months, dropping five percentage points to 40 percent. However, this came before Wednesday’s scandal involving Senator Chico Rodrigues, the government’s deputy whip in the Senate, who was found hiding money embezzled from Covid-19 efforts “between his buttocks”.

Another key reason behind the president’s lower rejection rates — the coronavirus emergency aid program — is broadly supported by the population. As of October, 42 percent of interviewees had received the stipend, while 45 percent considered it was a good decision to extend payments until the end of the year. More importantly, 68 percent of Brazilians believe that if the new cash transfer program Renda Cidadã is not approved, the government should extend the emergency aid into 2021.

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Explaining Brazil #129: Bolsonaro steering away from Bolsonarism

President Jair Bolsonaro has pretty much broken with everything he stood for in the 2018 election. He has not catered to Evangelicals in Congress; he has declared the end of Operation Car Wash; and his family is battling multiple corruption accusations. But Mr. Bolsonaro has never been stronger among politicians in Brasília — nor has he been more popular with voters.

Still, it is possible to see cracks in the Bolsonarism bloc, with some far-right activists calling for protests against the president — who they call a “closeted left-winger,” something the president — and anyone on the left — would strongly deny.

This week, we discuss the political repercussions of the president’s political shift.

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  • Pablo Ortellado is a philosopher, researcher, and public policy professor at the University of São Paulo. His research interests include copyright policies, access to information, cultural policies, and social movements.

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Who is Brazil’s new Supreme Court justice?

Brazil’s longest serving Supreme Court Justice Celso de Mello retires from the court this afternoon, 31 years after first occupying his seat. His vacancy has offered far-right President Jair Bolsonaro his very first shot at appointing a justice to the Supreme Court — a process that is often fraught with realpolitik and cynical self-preservation. However, Mr. Bolsonaro’s pick — 48-year-old federal judge Kassio Nunes Marques — came as something of a shock to political pundits in Brasília.

Despite having promised an ultra-conservative and “extremely Evangelical” appointment to the Supreme Court, Jair Bolsonaro selected a justice with long-term links to the well-heeled establishment of Brazilian politics — a group that the president himself railed against throughout his campaign and first year in office, much to the delight of his supporters.[restricted]

Indeed, the process of agreeing on Kassio Nunes Marques as Brazil’s newest Supreme Court justice was a team effort, involving President Bolsonaro sitting down with a number of political actors who his more ideological fans abhor. On September 29, Senate President Davi Alcolumbre met with Mr. Bolsonaro, with the former telephoning current Supreme Court Justice Gilmar Mendes to organize a sit-down with the head of state. Messrs. Alcolumbre and Mendes, it should be noted, have both been targeted and made into effigies by pro-Bolsonaro protesters during demonstrations as recently as May.

Soon after, Jair Bolsonaro arrived at Justice Mendes’s house in Brasília, accompanied by Kassio Nunes Marques. Fellow Supreme Court Justice Dias Toffoli — another bête noire of the president’s ideological base — was also in attendance. As it happened, Mr. Bolsonaro and Justice Toffoli were pictured hugging after the meeting, dividing the president’s supporters on social media.

Two days later, Mr. Bolsonaro declared the appointment of Kassio Nunes Marques, who will now have to pass a largely perfunctory confirmation hearing in the Senate.

A bolt from the blue

The choice of Kassio Nunes Marques — who intends to go by the title Justice Nunes Marques once sworn in — took almost everyone in Brasília by surprise. He did not feature on even the most exhaustive lists of favorites for a Supreme Court pick and he quickly angered President Bolsonaro’s ultra-conservative supporters, to which the head of state’s choices have largely been beholden so far.

First and foremost, Nunes Marques’s political affiliations were called into question. While on the one hand he was branded as a lackey of the so-called “Big Center” — the large establishment caucus within Congress, made up of small to medium-sized parties willing to buy and sell their support — some pointed to his alleged links to the center-left Workers’ Party, Jair Bolsonaro’s declared enemies, with whom fraternization is seen as a cardinal sin within Bolsonarism.

Indeed, in 2011, Marques Nunes entered the Federal Regional Appellate Court of the 1st Region, in Brasília, after being appointed by former President Dilma Rousseff, of the Workers’ Party.

He was also involved in an emblematic case in 2019, when he overturned a trial court decision to suspend the purchase of wine and lobsters for a Supreme Court function. The case was capitalized upon by supporters of President Bolsonaro — including his politician sons — as an example of the excessive privileges enjoyed by the country’s highest court, which they intended to have shut down.

In another high-profile trial dating back to 2015, he voted in favor of suspending the deportation of Cesare Battisti, the former communist activist who was sentenced to life in prison for quadruple homicide in his home country of Italy, before fleeing to Brazil to receive political asylum from former President Luiz Inácio Lula da Silva.

Under Jair Bolsonaro’s government, Mr. Battisti was eventually arrested and extradited to Italy.

The Cesare Battisti case held particular importance for the ideological platform of the then-nascent Jair Bolsonaro government. As a former member of a far-left terrorist group in Italy, and having been given shelter by Lula, arresting and deporting Mr. Battisti was a message to the Brazilian left, as well as being a way to further the government’s foreign policy goals.

The man in the middle

Despite allegations of links to the center-left Workers’ Party, Nunes Marques’s most credible alliances do indeed lie with the Big Center. Indeed, his wife Maria do Socorro has worked under four senators from the couple’s home state of Piauí, all of them from traditional Big Center parties. Indeed, she was set to double her salary just as her husband got his own big break, when the Progressistas party lined her up for a commissioned post in the Senate but backed down once the news had been published by Rio de Janeiro paper O Globo.

The Progressistas party is presided over by Ciro Nogueira, who is now a close ally of President Bolsonaro and one of Mr. Nunes Marques’s biggest backers. Last year, Mr. Nogueira praised the soon-to-be Supreme Court justice during a trial session. “Our Kassio [Nunes Marques] is a highly respected figure in the legal world of today, I am certain that he will reach the high courts, either the [Superior Court of Justice] or the Supreme Court. He is a much liked and respected individual.”[/restricted]


The fall from grace of Sergio Moro

With the hubris that can only come from a president who sees his future secure at the head of the Brazilian government, Jair Bolsonaro emphatically declared the end of the country’s sweeping Operation Car Wash anti-corruption investigation on Wednesday, claiming his administration is now above suspicion. “I do not want to end [Operation] Car Wash. I’ve already ended Car Wash, because there is no longer any corruption in the government,” he exclaimed, during a press address.

Beyond overlooking the numerous corruption investigations targeting his inner circle — including his sons and wife Michelle — this pontifical claim symbolized Mr. Bolsonaro’s turn toward the politics of cronyism, which he promised to end during his election campaign. In broader terms, it also symbolizes the end of Brazil’s zealous anti-corruption drive, embodied by Operation Car Wash.[restricted]

Perhaps the best example of this fall from grace of the country’s anti-corruption crusader class is the ruination of Operation Car Wash’s poster boy, former judge Sergio Moro.

For large sections of Brazil’s media class and the population at large, Sergio Moro became a national hero through his role leading Operation Car Wash. While his methods and alleged bias were often criticized, he became the face of the one aspect of the Car Wash years that the vast majority of society conceded as being overwhelmingly positive: the sense of absolute impunity among the upper echelons of Brazilian politics and business was no more. At the height of Operation Car Wash, influential politicians and business owners were facing prison sentences, something that was almost unimaginable before.

However, over six years on from his first involvement in Operation Car Wash and after having his name dragged through the muck by all sides of the political spectrum, Sergio Moro is packing his bags, ready to leave Brazil.

As reported by newspaper Folha de S. Paulo on Tuesday — and confirmed by The Brazilian Report — Sergio Moro plans to trade in his political career for academia, intending to lecture at an unspecified U.S. university. While the former Car Wash judge has yet to speak in public on the story, people close to him have affirmed that the move was a request of Mr. Moro’s wife, lawyer Rosângela Moro, who has told those close to the family that her husband “has given all he can to the country” and that he is not cut out for party politics “and its savage confrontations.”

There is a suggestion that Sergio Moro will now completely abandon his plans to run for president in the 2022 election, though other sources close to the ex-Justice Minister say it will be a temporary move, before returning to Brazil in two years’ time, banking on President Bolsonaro’s stock being weakened by that time.

Security is another factor weighing on Mr. Moro’s mind. It will soon have been six months since his acrimonious split with Jair Bolsonaro and abandoned his spot in the cabinet, meaning he will now lose his BRL 31,000 (USD 5,540) salary and the right to a Federal Police escort. 

The bigger they come, the harder they fall

After 12 years as a judge in Curitiba — four and a half of them spent in charge of Operation Car Wash — Sergio Moro abandoned his career as a magistrate and joined the government of Jair Bolsonaro, who invited him to serve as Justice Minister. With promises of being given autonomy to implant an anti-corruption agenda in the administration, Mr. Moro’s long-term future seemed sewn up: a few years in the cabinet, and then a seat on Brazil’s Supreme Court

However, Sergio Moro only remained in office for little over a year, resigning in April of this year while accusing President Bolsonaro of meddling with the Federal Police to safeguard his son, Senator Flávio Bolsonaro, from corruption investigations.

The decision to leave the government was no doubt based on his belief that he was more popular than President Bolsonaro — a notion often repeated by the Brazilian press, who suspected the government would crumble once its anti-corruption totem jumped ship. This turned out to be a gross miscalculation, and the government’s supporters sided with the president, labeling their one-time hero as a traitor.

Indeed, despite gaining worldwide recognition for his role in Operation Car Wash, Sergio Moro was frequently criticized and undermined in the field of Brazilian politics and law. After The Intercept Brasil published a series of leaked messages from the Car Wash prosecution task force, showing Mr. Moro’s collaboration with — and often command over — prosecutors, he was accused of violating due legal process and currently faces cases in the Supreme Court that question his impartiality throughout Car Wash.

Furthermore, Sergio Moro has been repeatedly vilified by the Brazilian left, who accuse him of acting in a biased and potentially illegal manner to spur on the impeachment of former President Dilma Rousseff, jail another former President Luiz Inácio Lula da Silva, and help elect Jair Bolsonaro.

So, having left the government, Mr. Moro had lost the widespread support from the right-wing, was unable to make peace with the left, and was ostracised in political life, with no obvious source of support. 

Discord and backtracking

The appointment of judge Kassio Nunes Marques to a soon-to-be-vacant seat on the Supreme Court represents the latest defeat for the Operation Car Wash anti-corruption movement, isolating Mr. Moro further. While the Supreme Court has made several decisions to void Car Wash cases, Congress is debating on laws that are wholly against what Mr. Moro had planned to do as Justice Minister.

On Twitter, Sergio Moro criticized Mr. Nunes’ nomination. “If Jair Bolsonaro does not appoint someone to the Supreme Court who is committed to the fight against corruption […] we will all know his true nature (and many already know),” he wrote. 

One follower asked the former Justice Minister if he knew about Mr. Bolsonaro’s “nature” when he accepted his cabinet invitation, to which the former judge replied “no.” He later deleted his post.

Moro out: Left and right celebrate

The news of Sergio Moro’s potential exodus was celebrated on social media by both the right and left. The former laud what they see as a fitting end to a “traitor,” while the latter revel in the irony of Mr. Moro leaving the country due to the very government he took part in and helped elect.

“Defenestrated by the far-right, neglected by the country’s renowned judges, unmasked as biased and without the old partnership with the media that promoted him, [Mr.] Moro is the image of decadence common among false heroes,” wrote one left-wing Twitter user.

However, one of the few demonstrations of support for Mr. Moro came from São Paulo state lawmaker Janaina Paschoal, famous for co-authoring the request that led to the impeachment of President Dilma Rousseff. She expressed her solidarity with the former Justice Minister, but warned against his plan of leaving the country. 

“I perfectly understand his discouragement, Sergio Moro’s family has every right to want a bit of peace! But as a Brazilian who doesn’t say any other alternative, I ask that [Mr.] Moro and his wife think about facing another great challenge. They will have my support! Brazil needs a fourth way!” she wrote.

In Ms. Paschoal’s view, Sergio Moro would offer a voting alternative for the 2022 elections, beyond Jair Bolsonaro, a candidate from the left, or someone linked to the center.

Indeed, that the only political figure in his corner appears to be a fringe state lawmaker does not bode well for the future of a man who was once regarded as Brazil’s savior.[/restricted]


Bolsonaro goes mainstream

Late in the evening of May 30, 2020, a group of some 30 far-right activists carrying store-bought tiki torches — in a clumsy homage to white supremacist Ku Klux Klan protests — launched fireworks in the direction of the Brazilian Supreme Court building, demanding military intervention in the name of President Jair Bolsonaro and the arrest of all 11 justices of Brazil’s highest court. 

The protest raised tensions in Brasília to unprecedented levels, as the political establishment accused the government of not only failing to condemn such actions — but actively endorsing them on private social media channels.[restricted]

As authorities bumped heads on how to enforce social isolation measures as a way to control the coronavirus spread, the Bolsonaro administration engaged in a series of attacks against its fellow branches of government. At one point, the president even threatened to send military troops to shut down the Supreme Court, before being talked down by some of his closest aides.

As the pandemic raged in Brazil, the president and his allies defied democratic institutions on a weekly basis — and calls for impeachment erupted in many circles. 

Five months removed from that moment, the political climate could not be any more different. Jair Bolsonaro, the president elected on an anti-establishment message, is now going mainstream.

Last week, he chose to fill his first Supreme Court vacancy with Federal Judge Kássio Nunes, a candidate endorsed by two Supreme Court justices who, just months ago, Bolsonaro supporters wanted to see behind bars.

After nearly two years in office, Mr. Bolsonaro’s political strategy has seemingly made a U-turn. Instead of shattering the establishment, the president now seems more interested in co-opting it. After compromising with the so-called “Big Center” — a caste within Brazil’s Congress made up of veteran pork-barreling politicians — Mr. Bolsonaro is now looking to get the courts on his side.

The move makes a lot of sense for the president, as his close family are targeted by a series of criminal investigations. Senator Flávio Bolsonaro, his eldest son, has been charged with money-laundering, embezzlement, and criminal association. Meanwhile, his other two politician sons — Rio de Janeiro City Councilor Carlos Bolsonaro and Congressman Eduardo Bolsonaro — are suspected of operating an illegal underground misinformation network.

Push towards establishment infuriates core Bolsonaro supporters

Mr. Bolsonaro’s recent pandering to politicians he once described as members of “old politics” has certainly frustrated his core group of ultra-conservative supporters.

Sara Winter, the far-right influencer who organized the KKK-like demonstration in May, declared on social media that she was “tired” of supporting the administration, and even accused the president of “purging” his hardcore base from the government. Meanwhile, highly influential televangelist Silas Malafaia has called the president’s latest moves a “shameful outrage.”

Even his most loyal political commentators have started to bash his recent turn.

Still, those outbursts do not mean the pro-Bolsonaro train is falling off the tracks. Instead, frustrating his own supporters is a key part in the project to consolidate the president’s power. His defense of far-right causes still makes him the best — and perhaps the only — option for the extreme right in 2022. Meanwhile, his recent implementation of welfare policies and alliance with moderately conservative forces may help him attract a voter base that seemed unreachable just months ago.

Every poll shows Mr. Bolsonaro head and shoulders in the lead for the 2022 presidential election. And while it remains too early to predict how the race will end, not a single credible alternative has emerged.

If Mr. Bolsonaro’s recent moves allow him to approve a bold welfare-transfer program from 2021 and beyond, the 2022 election will be his to lose.[/restricted]


Anti-Bolsonaro outburst sparks free speech debate in Brazilian sport

Welcome back to the Brazil Sports newsletter. This week, allegations of political censorship in Brazilian volleyball, as one athlete has the book thrown at her for criticizing President Bolsonaro. And, a legal victory for the families of the victims of a harrowing 2016 air disaster. That, and much more.

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Political censorship in volleyball?

The matter of athletes’ right to express political opinions has taken center stage in Brazil this week, after sports justice prosecutors issued a complaint against beach volleyball player Carol Solberg, who criticized Brazil’s President Jair Bolsonaro during a live TV interview in mid-September.

What happened? After winning a bronze medal in a beach volleyball event in Rio de Janeiro, Carol was interviewed live on television alongside her playing partner, Talita. At the end of the interview, she took the microphone and said: “just so I don’t forget, Bolsonaro out!”

Hot water. Immediately after the incident, the Brazilian Volleyball Confederation (CVB) renounced the player’s comments, saying they were “not in line with the ethical attitude athletes should adopt.” Furthermore, the CBV promised to “take all necessary measures so that incidents such as this, which denigrate the image of the sport, will not happen again.”

Carol’s explanation. “This ‘Bolsonaro Out!’ has been repressed here in my throat. To see this government acting in this form, with the Pantanal burning, 140,000 deaths, and the way we are facing this pandemic. This cry has been repressed, and I feel that as an athlete I am obligated to take a stand.”

An expensive comment. Beyond a telling off from her bosses, Carol Solberg could now face hefty punishment for expressing her political opinion. The disciplinary case against her in the Superior Sports Justice Court (STJD) could result in a fine of up to BRL 100,000 (USD 17,800) and a six-match ban.

  • Claims of political censorship from her defense have drawn attention to the case, however, illustrated by the fact that she will be represented by the president of the Brazilian Bar Association, Felipe Santa Cruz.

Double standards? Regardless of merit judgments on athletes expressing their political opinions, another reason this case has gained such magnitude is that Bolsonaro-supporting volleyball players have been able to express their support for the president without sanction.

In the 2018 Volleyball World Cup, Brazilian players Wallace and Mauricio Souza were pictured making positive gestures alluding to then-presidential candidate Jair Bolsonaro. The CBV did not initially come out against this political expression, and the association went as far as posting the picture on its official Instagram account. After complaints, the association declared it was “against discrimination, but in favor of free speech.” Neither player was punished.

Airline convicted for negligence four years after Chapecoense disaster

Almost four years after the horrific Chapecoense air disaster killed 71 people and rocked the world of football, a state court in Florida, U.S. ruled that now-defunct Bolivian charter airline LaMia must pay USD 844 million (BRL 4.77 billion) in compensation to the victims’ families.

The crash. On November 29, 2020, a plane carrying the delegation of Brazilian football team Chapecoense crashed into a mountain upon approaching the Colombian city of Medellin, where the team was set to play in the final of the Copa Sudamericana — the South American equivalent of the Europa League. A total of 71 people died in the tragedy, including the vast majority of the Chapecoense playing squad, as well as staff, journalists, and flight crew.

Gross negligence. In an attempt to improve profit margins, the LaMia flight was not filled with enough fuel to safely carry out the flight from Bolivia to Medellin. Rules stipulate that aircraft must have enough fuel to reach their destination, plus an extra reserve to reach emergency landing areas in the event of faults. Records showed that the flight had exactly the amount of fuel necessary to make its trip, meaning that even small delays or diversions would have caused fuel emergencies.

Back at home. There is a public-interest civil action currently pending in Brazil, in which federal prosecutors demand USD 300 million in damages for the victims’ families. The case, however, has stalled indefinitely.

Read more. On the one-year anniversary of the crash, we at The Brazilian Report went back over the tragedy, highlighting the accusations of foul play.

What else you should know

  • 2022 World Cup. Considerably behind schedule, this week South America will begin its qualifying campaign for the 2022 World Cup in Qatar. What is usually a marathon to qualify for international football’s top tournament will now be a dash. Over the next 18 months, South America’s ten competing nations will play 18 matches each, fighting out for four automatic qualification spots and one play-off berth for the country finishing in fifth place. Brazil face Bolivia at home on Friday, before traveling to Lima to take on Peru.
  • 2022 World Cup 2. Of course, the major focus of these opening matchdays will not be on the football. The start of qualifying in South America is already seven months late, but that is not to say that the Covid-19 situation is under control, especially in countries such as Brazil and Peru. Officials have assured club teams around the world that strict safety protocols will be in their place for their players, but a potential outbreak in any of the 10 teams — with squad members playing all over the world — could be catastrophic. Some 75 percent of players from South American squads play their club football outside the continent.
  • Twitch. Brazil star Neymar is the latest in a long line of professional footballers to start their own channels on videogame streaming platform Twitch. In a broadcast on Thursday night, the PSG forward played 90 minutes of first-person shooter Counter-Strike: Global Offensive, before playing half an hour of popular social deduction game Among Us. After this single broadcast, his channel already has over half a million followers.

How liberalization paved the way for populists in Brazil

While the rise of populist politicians in the U.S. and Europe attracts significant attention from the media and researchers alike, the drivers of populism taking hold in emerging and developing economies still receive relatively little scrutiny.

But a new working paper, called “Roots of dissent: Trade liberalization and the rise of populism in Brazil,” provides new evidence tracing the rise of populism in Brazil — through both the victory of presidents Luiz Inácio Lula da Silva, in 2002, and Jair Bolsonaro, in 2018 – to regional economic shocks caused by a process of trade liberalization that began in the early 1990s.[restricted]

Both Lula and Mr. Bolsonaro were able to mobilize voters by amplifying divisions caused by these trade shocks and subsequent periods of austerity. However, the two leaders were elected on very different platforms and at diametrically opposed points of the political spectrum.

Economic shocks of the 1990s

In 1990, the government of Fernando Collor de Mello began implementing a vast program of trade liberalization in an attempt to modernize the Brazilian economy. Between 1990 and 1995, import tariffs were reduced from an average of 30.5 to just 12.8 percent. 

This reduction was not equally distributed across regions and sectors, however. For instance, while the level of tariff changes in the agriculture and mining sectors was relatively small, import tariffs for clothing and rubber were cut by over 30 percent — and local producers had to deal with an influx of cheaper foreign products that drove many out of business.

Indeed, with different sectors being more prevalent in certain parts of the country, the impact of tariff changes varied from region to region. Those which saw significant cuts were left more vulnerable to international competition, affecting the labor market and the very structure of their economy. 

This shock led to long-lasting declines in formal employment and wages relative to other regions. The map below shows, for example, that some of Brazil’s largest cities — including Belo Horizonte, São Paulo, and Rio de Janeiro — were highly affected by tariff changes.

Tariff reductions by Brazilian microregion

import tariffs
Regions with darker units faced the largest reductions in the level of tariffs

As our analysis shows, these effects persisted for decades and affected the political preferences of Brazilians. We found that the microregions which experienced the largest tariff cuts in the early 1990s were more prone to vote both for Lula in 2002 and Mr. Bolsonaro in 2018 — despite their profound political differences.

Presidential votes by microregion

Regions with darker colours show the largest shares of votes for Lula (2002) and for Bolsonaro (2018).
Regions with darker colors show the largest shares of votes for Lula (2002) and for Bolsonaro (2018)

The effects of trade reforms were further amplified by periods of austerity that hit Brazil just before the 2002 and 2018 elections. Both Lula and Jair Bolsonaro exploited the effects of austerity and previous effects of the trade shocks by building political agendas that appealed to voters who had lost out either economically or socially from the interaction between these economic shocks.

From left-wing to right-wing populism

But while these economic factors are directly linked to the rise of populism, they don’t explain its different guises. Lula’s left-wing platform was very different from Mr. Bolsonaro’s far-right agenda. This dramatic swing to the left in 2002, and to the right in 2018 can be explained by the different political strategies Lula and Mr. Bolsonaro used to capture sufficiently large constituencies.

On the left, Lula took advantage of the austerity policies of his predecessors in the early 2000s — which led to dramatic rises in inequality — to amplify economic cleavages in society. Lula’s brand of populism resulted in one of the largest social protection programs in the world, and significant reductions in poverty and inequality. 

But these achievements were marred by accusations of corruption and economic mismanagement, for which Lula was convicted and imprisoned between 2018 and 2019.

Populism follows austerity

GDP growth rate (left axis) and social spending (right axis) between 1995 and 2018
GDP growth rate (left axis) and social spending (right axis) between 1995 and 2018

On the right, Bolsonaro took advantage of the austerity policies implemented between 2015 and 2018 by the governments of Dilma Rousseff — Lula’s successor — and Michel Temer, who took office after Ms. Rousseff’s 2016 impeachment. 

Mr. Bolsonaro also played on voters’ feelings of insecurity by promoting a strongman image, strengthening social and cultural divisions, and anti-migration sentiment. His variety of populism has resulted in the reversal of decades of economic development and climate adaptation and one of the world’s largest Covid-19 death rates.

Across the world, the shortcomings of populist agendas in Mexico, the U.S., the United Kingdom, and India, among others, have been laid bare by their failures to contain the spread of infections and death rates caused by the pandemic. 

Yet, the success of populist politicians lies in appealing to existing economic and social divisions. 

Given Brazil’s experience, there are now fears that the entrenchment of populism could reverse decades of development and threaten democracy itself across many other parts of the world.

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U.S. presidential election: Jair Bolsonaro votes Trump

This Tuesday, U.S. presidential candidates Donald Trump and Joe Biden presented us one of the worst presidential debates as far as we remember. Called a “shitshow” by CNN journalists covering the election, the tos and fros of the messy discussion was being watched attentively at home by Brazil’s President Jair Bolsonaro. 

While cheering on Mr. Trump, the Brazilian president may have jumped out of his seat when his own country got a mention by presidential challenger Joe Biden. When discussing the environment, the former vice president mentioned the burning of the Amazon rainforest, suggesting the U.S. should give Brazil USD 20 billion to end deforestation, or face “economic consequences.” 

Jair Bolsonaro could hardly contain himself. Running to social media, he posted a shakily translated statement criticizing Joe Biden, suggesting his offer of USD 20 billion was a “bribe” and even mistaking the candidate’s name, referring to him as “John Biden.”

Since his election, Brazil’s president has given little thought to his country’s image abroad. He has started fights with counterparts in Argentina, France, and angered several member nations of the European Union. 

Now, with Joe Biden leading in the polls, Mr. Bolsonaro may just have made an enemy out of the next president of the world’s biggest economy.

What could go wrong?

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Brazilian First Lady accused of misusing Covid-19 funds

The Jair Bolsonaro administration has misappropriated BRL 7.5 million (USD 1.3 million) earmarked for the purchase of Covid-19 rapid tests. According to newspaper Folha de S.Paulo, the money — which had been donated on March 23 by meat producer Marfrig — was used instead to fund the “Pátria Voluntária” program (Voluntary Motherland), led by First Lady Michelle Bolsonaro.

Created in July 2019, the initiative aims at fostering volunteer initiatives and raising money from private corporations for third-sector organizations. So far, it has raised nearly BRL 11 million (70 percent of which coming from the Marfrig donation) but has cost the government around BRL 9 million in advertising costs.

Only after the money had already been reallocated, the government asked Marfrig about the possibility of using it for other purposes rather than buying rapid Covid-19 tests. The amount was ultimately funnelled to evangelical organizations linked to Human Rights Minister Damares Alves — in what many observers call a flagrant conflict of interests.

The government has decided not to comment on the report.

This is not First Lady Michelle Bolsonaro’s first controversy. According to money laundering enforcement agents, she received a total of 21 checks from Fabrício Queiroz, a former advisor to Senator Flávio Bolsonaro who has been accused of money laundering involving the president’s son. The checks are dated from between 2011 and 2018, amounting to BRL 76,000. The revelation is part of a corruption case against Jair Bolsonaro’s son and Mr. Queiroz.

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The risks of Brazil ignoring its public spending cap

The year 2020 was one of great expectations, not only for the Brazilian economy — but for the global financial landscape. Macroeconomic data corroborated growth expectations, GDP forecasts were promising, retail results enjoyed an upward trend, and inflation was under control. However, Brazil inherited an eye-watering debt-to-GDP ratio, which only got worse during the Covid-19 pandemic. The national debt to GDP ratio — already high at 75 percent — became desperate, with the expectation of hitting 100 percent.

Besides crashing into the Brazilian economy like a wrecking ball, [restricted]the pandemic certainly created a feeling of mistrust among investors with regard to the country’s public spending cap. Brazil has a severe flaw in its constitution, by which spending on personnel — the second-highest public sector expense, behind pensions — cannot be decreased. In fact, this expenditure has to be adjusted for inflation on a yearly basis, causing a direct impact on the spending ceiling.

Furthermore, the government’s public service reform, submitted to Congress, would only affect employees who enter civil service after the constitutional changes are approved. In other words, it would spark no effect, as existing obligations will continue to raise public spending. Beyond this, the reform proposal would not even apply to politicians, judges, members of high courts, prosecutors, and military servants.

Brazil an ugly duckling for international investors

Brazil’s image on the international market is very poor indeed. This can be seen by the outflow of foreign capital from the Brazilian stock exchange — BRL 87 billion (USD 15.5 billion) has left this year alone. While these political uncertainties and compliance with the public spending ceiling continue, Brazil’s reputation on the world stage is unlikely to improve. However, this flow of funds could be reverted into a potential increase in interest rates and the risk premium.

Mirroring this landscape, the world’s major credit rating agencies have maintained Brazil’s sovereign rating but altered their outlook from “stable” to “negative.” While ultraliberal Economy Minister Paulo Guedes has said he will adhere to the public spending cap, President Jair Bolsonaro has mentioned the possibility of breaking through the ceiling on a number of occasions, increasing uncertainty.

If Brazil were to breach its public spending rules, ratings agencies could lower the country’s sovereign credit rating, which would cause huge losses for Brazil’s image abroad and scare off foreign investors even more. 

Public spending issues: domestic factors

Macroeconomics also have to be taken into account. Ignoring fiscal policy would lead to an increase in inflation, the further weakening of the Brazilian Real, higher interest rates, and more unemployment. As this situation could turn into a vicious cycle, it is likely that the recession would become even more severe.

Elsewhere, there is the matter of the government’s coronavirus emergency salary. The plan to pay the unemployed and informal workers a monthly sum of BRL 600 (USD 106) set the administration back BRL 50 billion a month. The program was extended until the end of the year, but payments have been cut to BRL 300. The emergency aid certainly propped up Brazil’s GDP in the second quarter — avoiding a bigger dive than the -9.7 percent registered by the government — but it has aggravated the country’s fiscal outlook.

As seen in the chart above, Brazil’s Credit Default Swap — or CDS, measuring the likelihood of a default on public debt — reached 91.8 points in February 2020, but now stands at around 227 points.

Therefore, so that Brazil may improve its national debt to GDP ratio, authorities must focus on reducing debt and mitigating the country’s problems in honoring its payments by way of public service and tax reforms, and implementing a sweeping program of privatizations. This will give the country more control over its spending, increasing tax revenue, and allowing funds to be invested in health, education, and infrastructure.[/restricted]

Brazil Daily

Herd immunity claim challenged in the Amazon

Today, we cover the rising number of coronavirus cases in the Amazon. The disenchantment of markets with Jair Bolsonaro. The president’s son called a corrupt “ringleader.” And the possible end of Brazil’s IPO frenzy.

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Amazon coronavirus herd immunity hopes at risk as cases rise

Last week, a yet-to-be-peer-reviewed study published on medical platform MedRxiv suggested that the Brazilian city of Manaus[restricted] — the biggest in the Amazon, and Brazil’s first to experience a full-scale healthcare collapse in the country — had reached the level of so-called “herd immunity” against Covid-19. University of São Paulo researchers reached that conclusion by combining data of decreasing deaths with an analysis of locals’ blood samples — estimating that up to 66 percent of residents had developed coronavirus antibodies.

  • Now, however, cases are rising once more, challenging the researchers’ conclusion. Infectious disease experts have identified a surge in cases among younger, wealthier populations.

Coronavirus in the Amazon. Manaus, the biggest city in the Amazon, is a textbook example of what happens when the coronavirus is allowed to spread unchecked. The city never imposed lockdowns, and most people and businesses simply ignored social-distancing rules. At one point, the city was left without any available hospital beds, nor enough coffins to bury the dead. 

Why it matters. The case of herd immunity in the Amazon is yet another example of how little we know about Covid-19 and the SARS-CoV-2 virus.

1 million deaths. The world has reached the somber milestone of 1 million confirmed Covid-19 deaths, with a worrisome finding: while it took six months to reach 500,000 deaths, that amount doubled in half the time, showing that the pandemic is not slowing down.

  • Fourteen percent of all Covid-19 deaths worldwide occurred in Brazil. However, we will never know the full human toll, due to underreporting and undertesting.
  • Of the 10 countries with the highest number of coronavirus deaths per capita, five are South American nations. The list is topped by Peru, a country that took the pandemic seriously and enforced lockdown even before many European countries did so. But massive inequality and an informal economy hindered any effort to hold people in confinement in order to lower the curves.

Bolsonaro’s “creative accounting” spooks markets

On Monday, the government announced the creation of Renda Cidadã (Citizen Income), a welfare initiative slated to replace world-renowned cash-transfer program Bolsa Família. But the administration’s plan to finance the scheme came across as odd to most observers: the money would be taken from a fund to finance basic education, as well as from the postponement of so-called “precatório” payments, or government IOUs.

Why it matters. The move was poorly received in Congress, with many lawmakers considering the solution a way to doctor the budget — for which former President Dilma Rousseff was impeached in 2016.

Markets. On Monday, the Ibovespa stock market index dropped 2.41 percent due to investors’ fears of fiscal imbalance. Since August, the index has fallen 10.3 percent. The Brazilian stock exchange has lost BRL 437 billion (USD 77.2 billion) over the last two months, as President Jair Bolsonaro hints toward a laxer fiscal policy to cater to his own electoral goals.

Meanwhile … The government was unable to reach a consensus with congressional leaders around the tax reform, and is expected to delay its proposals until after municipal elections in November. That essentially buries any hope of advancing this agenda before 2021.

President’s son to be charged with embezzlement, money laundering

Rio de Janeiro prosecutors have concluded their investigation into money-laundering schemes operated from within the state’s legislature and are soon expected to present charges against Senator Flávio Bolsonaro, the president’s eldest son. He served as a state lawmaker between 2003 and 2018.

  • Mr. Bolsonaro will be charged with embezzlement, money laundering, and criminal association. He is accused of forcing staffers to surrender part of their salaries — which were allegedly collected by his former aide, family friend and ex-military policeman Fabrício Queiroz, who will also be charged.

Why it matters. Jair Bolsonaro ran for office in 2018 on an anti-corruption platform. Now, prosecutors are about to declare his eldest son the “ringleader” of a corrupt ploy.

Cash. The senator is believed to have pocketed at least BRL 2.7 million in cash from the scheme.

Brazil’s IPO frenzy cooling off

The Brazilian market for initial public offerings was booming this year — despite the pandemic. In July, as many as 50 companies were preparing to go public. By August, companies had raised more money through IPOs than in the entirety of 2019. However, the winds seem to have changed, and many big groups are giving up on their plans to sell stock. 

  • On Monday, energy conglomerate Cosan announced it was pulling the plug on the IPO of gas unit Compass after demand appeared to be underwhelming. Last week, state-owned bank Caixa called off the long-awaited IPO of Caixa Seguridade, its insurance subsidiary, while investment bank BR Partners postponed its offering.
  • Other firms, such as home builder Cury, reduced share prices in order to appeal to investors.

What they are saying. Companies cite “unfavorable market conditions” when justifying their decisions to postpone IPOs.

Why it matters. Financial markets around the world appeared to be largely unaffected by the sanitary and economic conditions created during the Covid-19 pandemic, but fears of a second wave in multiple countries has, once again, made investors jittery.

Competition. Marco Harbich, a strategist at Terra Investimentos and a columnist for The Brazilian Report, also points out that with so many companies going public, investors are getting pickier about where they put their money.

  • As Brazil’s benchmark interest rates are at their lowest ever, appetite for riskier investments has grown. Seventeen Brazilian companies have made their debuts on the stock market so far this year, with another 17 holding follow-on offerings. Still, there are another 31 IPOs being analyzed by the Brazilian Securities Commission (CVM).

What else you need to know today

  • Environment. After promising to “run the cattle herd” through Brazil’s Amazon — as well as over environmental regulations —, Environment Minister Ricardo Salles approved the extinction of two resolutions protecting mangroves and sandbanks near Brazil’s coast. These areas will now be opened up for real estate and other commercial ventures.
  • Startups. VTEX, a systems supplier for e-commerce, is now valued over USD 1 billion, making it Brazil’s latest unicorn. The company’s last investment round raised USD 225 million, pushing VTEX’s valuation up to USD 1.7 billion. VTEX’s surge happened as retail companies push to digitize their sales systems amid the Covid-19 pandemic. Its client list includes giants such as AB Inbev, Nestlé, and Walmart.
  • Election. After Brazil’s leading media group Globo said it would only hold mayoral debates in cities where parties agree to a limited number of participants — citing fears of coronavirus infections — another major media company will also pass on showing televised debates. Network SBT said it wouldn’t host any first-round debates due to the sheer number of candidates (in São Paulo alone, there are 14 contestants). SBT, however, will go ahead with plans for a November 21 debate during the runoff stage.  
  • Oil and gas. State-controlled oil firm Petrobras informed in a securities filing that it has reached a deal with Total to take over the French company’s operations in deepwater oil reserves 120 kilometers from the coast of Amapá, in the North of Brazil. The reserves were being operated by a consortium made up of Petrobras (30 percent), Total (40 percent), and BP (30 percent). Now, Petrobras’ stake could reach 70 percent if BP shows no interest in raising its involvement.
  • Election. Prosecutor General Augusto Aras asked the Supreme Court to investigate Congresswoman Joice Hasselmann — a mayoral candidate in São Paulo — for allegedly creating fake social media accounts in order to attack political adversaries. In April, an audio message in which Ms. Hasselmann instructed an aide to “create several profiles and go in ‘studs up’ on Twitter and Instagram” was leaked. The congresswoman has been one of the most outspoken critics of what she calls the Bolsonaro family’s “social media militia.”[/restricted]

In 18 years, Brazil’s forests lost an area almost the size of Spain

President Jair Bolsonaro is facing tremendous heat for his laissez-faire approach to the environment. Since he took office in 2019, his administration has been accused by federal prosecutors of “purposely dismantling” the country’s environmental agencies and all but encouraging illegal deforestation. During an infamous April 22 cabinet meeting that became public in an unrelated investigation, Environment Minister Ricardo Salles said the government should take advantage of the undivided attention of the press on the Covid-19 pandemic to “run the cattle herd” through the Amazon, “changing all of the rules and simplifying standards.”

But as deleterious as the Bolsonaro administration has been for the environment, uncontrolled deforestation is a problem that predates the far-right leader. [restricted]A new study by the Brazilian Institute of Geography and Statistics (IBGE) shows that, between the years 2000 and 2018, the country lost around 500 square kilometers of its native forests — an area almost as large as Spain.

According to researchers, all six Brazilian biomes — Amazon, Caatinga (semi-arid), Cerrado (savannah), Atlantic Forest, Pampa (lowlands), and Pantanal (wetlands) — have lost part of their vegetation. With the exception of the latter two, the pace of deforestation had decreased until 2018, a trend which has since been reversed.

Brazil’s lost forest in the 21st century

While Amazon deforestation generates international outcry, the rainforest was not actually the biome which lost the most land, proportionally speaking. The Brazilian portion of the pampa lowlands — the biome also extends to parts of Argentina and all of Uruguay — lost nearly 17 percent of its original forests between 2000 and 2018. Over that same period, the Cerrado savannahs lost almost 13 percent of vegetation.

Meanwhile, the Amazon — the largest biome in Brazil — lost 7 percent of its area.

That process is tightly linked to the expansion of agriculture in the country: 43 percent of destroyed vegetation was converted into pastures, while 19 percent was used for crops. In the Cerrado, for example, plantation areas increased by 102,600 sq km between 2000 and 2018 — growth mainly driven by grain and cereal production. 

As a matter of fact, an paper published in August by Science magazine shows that just 2 percent of all Brazilian farms account for no less than 62 percent of illegal deforestation in the country. The study, called “The rotten apples of Brazil’s agribusiness,” says that roughly 20 percent of Brazil’s soybean exports — and 17 percent of beef exports — might be linked to the illegal destruction of forests.

Pantanal: 2020 has been worse than last two decades

Between 2000 and 2018, the Pantanal wetlands lost roughly 2,100 square kilometers of native vegetation. During that span, Pantanal was the Brazilian biome that suffered the most intense changes to its landscape. According to the IBGE’s change intensity index (IIM), a measurement to analyze territory transformation, 75 percent of the region saw the highest intensity of change.

For comparison’s sake, only 8 percent of the Amazon rainforest got the same rating.

Still, nothing compares to the sheer level of devastation that the biome is experiencing this year — as criminal fires coupled with historic droughts, have destroyed over 23,000 sq km of the Pantanal — a shocking ten times the area lost between 2000 and 2018.

Still, during his address to the United Nations General Assembly on Tuesday, President Jair Bolsonaro called international outcry around deforestation a “brutal smear campaign” fostered by “spurious” international interests and “unpatriotic” Brazilian organizations.[/restricted]


Numbers of the week: Sep. 26, 2020

This is Brazil by the Numbers, a weekly digest of the most interesting figures tucked inside the latest news about Brazil. A selection of numbers that help explain what is going on in Brazil. This week: Argentina’s GDP, coronavirus figures, Bolsonaro’s approval rating. And more.

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19-percent GDP slump in Argentina

Argentina’s official statistics agency (Indec) [restricted]says the country’s GDP dropped 19.1 percent in Q2 2020 when compared to the same period in 2019. From Q1 2020, the quarterly contraction reached 16.2 percent — slightly better than most forecasts. The year-on-year change for Q2 2020 was even worse than the 2002 crisis, when Argentina faced one of its most dire economic moments in recent history, with five different presidents taking office in a matter of just two weeks. At that time, quarterly GDP shrank by 16.3 percent when compared to the previous year. 

The Argentinian crisis is mainly motivated by the country’s never-ending quarantine — which started back in March.

7 players infected

This week, Rio de Janeiro-based club Flamengo became the textbook example of the dangers of a rushed return to football amid the Covid-19 pandemic. Most South American countries remain unable to control the coronavirus spread — and yet, the region’s football confederation Conmebol has resumed the Copa Libertadores continental club tournament. The confederation said it had created a “mobile bubble” for teams, with charter flights and special hotel wings to isolate squads from contamination. Just a week after Libertadores action restarted, the weaknesses of the system were exposed.

Seven Flamengo players — including many in the starting lineup — tested positive for the coronavirus just prior to a match against Ecuadorian side Barcelona, in Guayaquil. But even that wasn’t enough for Conmebol to postpone the game. After Flamengo’s 2-1 win, the Barcelona squad was placed in quarantine to monitor possible contaminations.

40-percent approval

A new poll showed that 40 percent of Brazilian voters believe President Jair Bolsonaro is doing a “good or great” job — a bump of 11 percentage points when compared to his approval ratings at the end of last year. As we explained in our September 25 Daily Briefing, this rise is mainly linked to the government-issued coronavirus emergency salary — the monthly value of which has since been halved.

9 cases after Chief Justice inauguration ceremony

Supreme Court Justice Cármen Lúcia has tested positive for the coronavirus, making her the ninth infected person who attended the inauguration of Chief Justice Luiz Fux. But while the inauguration ceremony is being used as a timestamp for these infections, there were multiple occasions during which the spread might have occurred. One was a massive dinner party hosted by House Speaker Rodrigo Maia the day before.

BRL 1 billion in remote work savings

Public servants have been costing less to the federal government’s coffers: during the week, the Economy Ministry reported that the government saved about BRL 1.02 billion with public servants working remotely from April to August. Of those savings, BRL 859 million is related to cost expenses (such as water and electric bills and travel expenses) and other BRL 161 million to the servants’ personal aides. According to the Economy Ministry, the amount saved in those expenses can be used to “serve the population.” At least 360,000 servants (especially from public universities and federal institutes) are currently working from home, 62 percent of the federal government’s workforce.

From 15,000 to 5 million

Businessman Filipe Sabará, who intends on running for São Paulo Mayor this year, is facing heat after an eye-catching mistake in his income declaration to electoral authorities. On September 18, Mr. Sabará said he owned BRL 15,686 in assets (USD 2,830). Two days later, he changed his net worth to nearly BRL 5 million.

Mr. Sabará said the first statement was based on his tax returns, which consider the social capital of his company at BRL 11,111. The candidate claims to having later decided to change the figures to reflect the actual market value of his company — roughly BRL 7 million. He is also the heir of the Sabará Group — a company with a net worth of BRL 200 million.

His party, the libertarian group Partido Novo, suspended Mr. Sabará’s candidacy for undisclosed reasons. Besides the messy net worth statements, he was criticized for praising former São Paulo Mayor Paulo Maluf. During the 1980s and 1990s, Mr. Maluf became so associated with corruption that his name became a verb. “To Maluf” was to steal public money. In 2014, he was called “Mr. Kickback” by Transparency International.

10 states beat MMR coverage target

According to a report by the Brazilian Institute of Geography and Statistics (IBGE), called “Brazil in numbers,” in 2019, coverage of the measles, mumps, and rubella vaccine (MMR) exceeded the Health Ministry’s goals in ten states, with Mato Grosso do Sul (101.23%), Alagoas (101.18%), Rondônia (100.5%), Paraíba (98.07%), and Ceará (97.75%) topping the list. 

However, when looking at the national levels, MMR coverage is still only at 88.33 percent, 6.67 points below the 95-percent target set by the Health Ministry. Last year, before the pandemic, measles became a pressing public health issue in Brazil: according to the 2020 Bulletin of Epidemiological Surveillance of Measles, the virus was actively circulating in ten states. In 2019, between September and November 23, 15 people died from measles infections. Confirmed cases exceeded 13,000.[/restricted]

Coronavirus Power

Sacked Health Minister lifts lid on Bolsonaro’s Covid-19 response

Acrimoniously sacked as Health Minister in mid-April — and mid-pandemic — Luiz Henrique Mandetta has released a tell-all book covering events between January and April 16, when he was relieved of his duties after prolonged squabbles with President Jair Bolsonaro.

In “Um paciente chamado Brasil” (freely translated as “A Patient Called Brazil”), Mr. Mandetta displays his utter stupefaction with President Bolsonaro’s attitudes during the early weeks and months of the coronavirus epidemic in Brazil — from the conspiracy theories Mr. Bolsonaro used to explain the outbreak, to his denialism of the disease, and “magical” solutions for the virus.[restricted]

According to the former Health Minister, not only did Jair Bolsonaro publicly belittle the severity of Covid-19, but he also did not show interest in projecting the outcome of the epidemic or issuing protective measures to the population. Neither did he show any empathy for the droves of grieving families who lost loved ones to the disease.

“For [Mr.] Bolsonaro, the solution was always simple: his project to fight the pandemic was to say that the government has the medicine and whoever takes the medicine will be fine. The only people who will die are those who would have died regardless for another reason,” Mr. Mandetta wrote.

Key takeaways from former Health Minister Mandetta’s book

The book claims that the president ignored warnings from the Health Ministry, even with concrete numbers displayed to all present at a hurriedly organized meeting on March 28 at Mr. Bolsonaro’s official residence. At the time, ministry experts projected a total of 30,000 deaths as a best-case scenario — which Mr. Mandetta called “overly optimistic” — and up to 180,000 deaths if isolation measures were not put in place. Brazil reached a total of 140,000 Covid-19 victims on Friday.

At the end of the meeting in question, Mr. Mandetta says that the president’s concerns were elsewhere. “Are you going to praise [São Paulo Governor João] Doria?” he asked, according to the book. The then-Health Minister then confirmed that he would in fact speak positively about the head of the São Paulo, saying that Mr. Bolsonaro would be on Venezuelan President Nicolás Maduro’s side if he continued to deny the severity of the epidemic. Irritated, Mr. Bolsonaro adjourned the meeting.

Luiz Henrique Mandetta describes another encounter, once again in the president’s official residence, when Mr. Bolsonaro threatened to “use his pen” against cabinet ministers who had “become stars.” Days before, opinion polls showed that Mr. Mandetta had higher approval ratings than the president himself. The Health Minister accused Mr. Bolsonaro of being disloyal and threatening him. “I told him, in my state, if someone says ‘your time will come,’ it’s a death threat.” President Bolsonaro, he writes, remained quiet while military figures attempted to stop the head of state from firing his Health Minister.

The book depicts the moment when President Bolsonaro began contradicting the Health Ministry, speaking out against social isolation and pushing for the adoption of anti-malarial drug chloroquine as something of a ‘miracle cure’ for Covid-19, despite a lack of evidence of its effectiveness. At one meeting, says Mr. Mandetta, the president suggested that changes be made to the medicine’s label in order to increase supply. The measure was contested by health regulators.

Onyx devious and Guedes oblivious

Um paciente chamado Brasil” does not focus solely on former Health Minister Mandetta’s rifts with the president, but also concerns cases with other high-ranking members of the government. At one cabinet meeting, he writes that Economy Minister Paulo Guedes became infuriated upon finding out that medicine prices in Brazil obey a predefined reference table, despite the fact that his department is a part of the council that decides on said fixed prices.

A former ally of Mr. Mandetta, Citizenship Minister Onyx Lorenzoni gets his own chapter in the book.

When discussing a leaked recording of Mr. Lorenzoni and then-Citizenship Minister Osmar Terra plotting the Health Minister’s downfall, Mr. Mandetta highlighted a curious fact about Mr. Lorenzoni.

During the heyday of Operation Car Wash, Onyx Lorenzoni secretly recorded a meeting among colleagues in the Democratas party — of which Messrs. Mandetta and Lorenzoni are members — in which they discussed anti-corruption measures. He was ostracized by his peers when this came to light, until being restored to the top table with the election of Jair Bolsonaro.[/restricted]

Brazil Daily

Bolsonaro’s popularity boost tied to temporary benefit

Today, Bolsonaro faces a dilemma following new polls. Brazil to lift restrictions on foreign nationals. And a new chapter of Rio’s political debacle.

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Bolsonaro’s approval reaches new heights

A new poll by renowned pollster Ibope shows that[restricted] 40 percent of Brazilians believe Jair Bolsonaro is doing a ‘good or great’ job as president. This was the first nationwide poll carried out in Brazil through in-person interviews since the pandemic started — which makes it more comparable to surveys from before March 2020. 

Why it matters. A boost in his approval ratings certainly gives the president more political muscle — and the timing is great for him. Mr. Bolsonaro is facing a potentially embarrassing situation: the Supreme Court will decide whether or not he will be allowed to testify in writing in an investigation into his alleged illegal interference with the Federal Police. 

Emergency aid. Once again, polls show how the BRL 600 emergency aid program has boosted the president’s popularity. His approval skyrocketed among poorer and less-educated voters — while stagnating among college-educated people and those who earn at least BRL 5,000 a month (USD 907).

  • Remember that adage by Bill Clinton’s advisor James Carville, “it’s the economy, stupid”? In a country as unequal as Brazil, providing millions of poor people with purchasing power to cater to their basic needs works wonders for presidents. It helped Lula, and it is now helping Mr. Bolsonaro.

Yes, but … Interviews were made before the benefit was halved to BRL 300. For the country’s poorest 10 percent, the cut could lead to an immediate 44-percent loss in purchasing power

  • The progression of Mr. Bolsonaro’s approval ratings will be worth monitoring until the end of the year, when the emergency benefit is set to end outright. And it puts pressure on the administration to create a new cash-transfer program to prevent tens of millions from falling below the poverty line in 2021.
  • But the budgetary constraints that forced the government to slash the emergency aid will persist. The Economy Ministry foresees a BRL 861-billion deficit for this year — about 12 percent of the GDP.

Approval? A total of 51 percent of voters say they don’t trust the president, further suggesting that the rise in his popularity is less on his personal allure and more to do with emergency aid payments.

Government allows foreigners back into Brazil

The Brazilian government has lifted restrictions on the entry of foreign nationals at every airport in the country — revoking a March rule barring it in six states. A 30-day restriction remains for the entry of foreigners by land and sea. Venezuelan citizens, however, are granted an exception due to humanitarian reasons.

Why it matters. Brazil is lifting restrictions as many countries experience a second wave of coronavirus infections — raising uncertainty about the progression of the pandemic.

Restrictions. That kind of uncertainty is already being observed in Brazil — namely in the state of Amazonas, which was the first in the country to experience a full-scale collapse of its healthcare system. Authorities had lifted restrictions on commerce and tourist locations, but infection curves have increased in recent weeks — forcing the state government to shut down bars, public events, and resorts.

Rio Mayor declared ineligible for office

One day after the Rio de Janeiro State Congress moved forward with its impeachment process against Governor Wilson Witzel, the mayor of the city of Rio de Janeiro was declared ineligible for office. A state electoral court found Marcelo Crivella guilty of “abuse of economic power,” an electoral crime — and could suspend his political rights for eight years.

  • In 2018, the mayor used a City Hall event to canvass votes for his son, who launched an unsuccessful bid for Congress.

Why it matters. The decision comes 52 days before the November 15 municipal elections, when Mr. Crivella will fight for re-election (with the veiled support of the Bolsonaro family).

What happens now. Mr. Crivella will probably be able to run in November, as he will be entitled to multiple appeals until the case reaches the Superior Electoral Court and Supreme Court — a process that could take years.

Rio’s mayoral race. Rejected by 75 percent of the Rio electorate, the incumbent Mr. Crivella could fail to make it to the runoff stage altogether. According to the latest polls, he is tied for second place in a race being led by former Mayor Eduardo Paes — who is facing corruption charges.

What else you need to know today

  • Vaccine. The Brazilian federal government announced it would set aside BRL 2.5 billion (USD 453 million) to join the COVAX Facility, a worldwide initiative that brings together governments and manufacturers to ensure future Covid-19 vaccines reach those in greatest need, whoever they are and wherever they live. The government says the move will allow the country to “guarantee the immunization of 10 percent of the population by the end of 2021” when a vaccine is available.
  • Aviation. The first Gripen fighter jet to be delivered by Swedish manufacturer Saab to the Brazilian Air Force made its maiden flight yesterday — a 1-hour journey between Santa Catarina and São Paulo. Back in 2014, Brazil bought 36 Gripen jets — deliveries shall happen between 2021 and 2026.
  • Oil and gas. Supreme Court Chief Justice Luiz Fux scheduled for September 30 a trial on whether or not state-controlled oil giant Petrobras can slice up its assets into multiple subsidiaries to speed up their privatization. Senate President Davi Alcolumbre says the firm plans to circumvent Congress’ prerogative to block privatizations. As we explained on Wednesday, the sale of refineries is a cornerstone of Petrobras’ divestments plan — suspending it would delay the company’s deleveraging.
  • Environment 1. A Federal Police investigation concluded that the fires responsible for destroying 25,000 hectares of the Pantanal wetlands were started within four large properties in the Corumbá region, close to the Bolivian border. According to Brazil’s Institute of Geography and Statistics, the country lost over 8 percent of its natural vegetation between 2000 and 2018 alone — an area almost the size of Spain.
  • Environment 2. Nubank became the first bank in Brazil or Mexico to neutralize all or its carbon emissions, after being founded in 2013. The company will support three projects to offset 4,300 tons of carbon dioxide. Nubank pointed out that digital banks are responsible for fewer emissions than traditional ones. Days after Nubank’s announcement, investment bank BTG Pactual said it offset 13,000 tons of carbon dioxide to compensate for its 2019 emissions.
  • New book. Former Health Minister Luiz Henrique Mandetta launches his new book today: “A patient called Brazil,” in which he gives his perspective on the last 87 days of his time as a member of the Jair Bolsonaro administration. Mr. Mandetta singles out the president’s Covid-19 denialism as the biggest problem in tackling the pandemic. “First, he denied the Covid-19’s severity, calling it ‘the sniffles.’ Then, he got mad at the doctor, that is, me. Then, he aimed for a miracle: believing in chloroquine,” writes the former minister.[/restricted]

Ibope: Bolsonaro’s approval ratings grow 11 points compared to 2019

As reported by an Ibope survey this Thursday, 40 percent of Brazilians rated President Jair Bolsonaro’s government as either ‘great or good’ in July — an increase of 11 percentage points when compared to his approval ratings at the end of last year. Meanwhile, 29 percent classed the current administration as ‘bad or terrible.’ 

As The Brazilian Report has explained, one of the main reasons for this jump in Mr. Bolsonaro’s approval rating is the Covid-19 emergency salary program, paying BRL 600 (USD 108) each month to informal workers and the unemployed. However, the payment has now been cut to BRL 300 a month. During his speech at the 2020 UN General Assembly on Tuesday, Mr. Bolsonaro incorrectly claimed that the initiative had paid USD 1,000 to each beneficiary.

The Ibope survey polled Brazilians on their perceptions of several federal government sectors. Fifty-one percent had positive opinions about “public security,” while the “tax sector” fared the worst, seen in a negative light by 67 percent. 

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Brazil’s prosecutor general: unbiased professional, or Bolsonaro’s lackey?

Handpicked by President Jair Bolsonaro last September, Brazil’s Prosecutor General Augusto Aras is about to complete a full year in office. Initially depicted as the president’s strawman, Mr. Aras used his inauguration speech to reinforce his “unwavering commitment to [fighting] corruption,” while stressing that the Federal Prosecution Service he now oversees must be “pledged to the true spirit of the Constitution.”

His stint as prosecutor general has so far been littered with controversy, with questionable decisions that have led to internal and external criticism. Mr. Aras’s vow against corruption has been called into doubt, thanks to his series of attacks against Operation Car Wash — the largest anti-corruption investigation in Brazil’s history.[restricted]

Indeed, several of his decisions have raised a question mark over his actual dedication to the fight against corruption, and whether he is simply in the role of prosecutor general to act as President Bolsonaro’s lackey.

Just last week, Augusto Aras made at least three statements in favor of the Bolsonaro family. On Thursday, he told the Supreme Court that Senator Flávio Bolsonaro should be given the right to jurisdictional prerogative in the corruption case currently brewing in Rio de Janeiro.

When the events that make up the inquiry took place, Flávio Bolsonaro was a member of Rio state congress, meaning that — by the letter of the law — the president’s oldest son should not be granted any parliamentary jurisdictional benefits.

Mr. Aras also shelved a request to place President Bolsonaro under investigation for threatening a reporter from newspaper O Globo — Mr. Bolsonaro threatened to “punch [his] face in” — claiming the president enjoyed immunity.

He also ruled in favor of Mr. Bolsonaro in stating the president’s verified social media accounts should not be considered “official,” giving the head of state the right to block users as he sees fit. This statement came in a case pending before the Supreme Court, filed by a lawyer who was blocked by the president on Twitter.

Suing President Bolsonaro

The major litmus test of Mr. Aras’s time in office concerns a complaint issued by former Justice Minister Sergio Moro, who directly accused President Bolsonaro of undue interference in the Federal Police. The Brazilian Report spoke with several sources within the Prosecutor General’s Office, Planalto Palace, Supreme Court, and the General Counsel for the Federal Government — the general feeling is that Augusto Aras will nix Mr. Moro’s plea and save the president from investigation.

Before this, one of the most controversial decisions of the prosecutor general’s time in office also concerns Sergio Moro. Prior to examining whether Mr. Moro’s accusations are based in fact, Mr. Aras named the former Justice Minister as a suspect for alleged malfeasance. 

One source from within the Prosecutor General’s Office called Augusto Aras’s attitude towards Mr. Moro in the investigation as “subtle, but uncommon,” saying that it works in Jair Bolsonaro’s favor.

Indeed, the president’s allies are prepared to submit appeals in the case and are wary of celebrating prematurely. “In legal matters, you never know what’s around the corner,” said one of Mr. Bolsonaro’s interlocutors. However, all are in agreement about the “signals [Mr.] Aras is making.”

Constitutional Catch 22

Michael Mohallem, a law professor at Fundação Getúlio Vargas in Rio de Janeiro, says that the appointment of the Federal Prosecutor General is one of the weak links left by the Brazilian Constitution when it comes to the autonomy of the prosecution service. “The institutional framework does not favor independent stances from the [Prosecutor General] as the president is not forced to choose a candidate from the three-person list of suggestions [prepared by prosecutors],” he explains.

“It’s not unconstitutional, but it weakens the situation, as it allows any person who is close and aligned with the president to be given the job. It’s one thing to evaluate technical requirements, it’s another to evaluate preferences. One of the central responsibilities of the Prosecutor General is to carry out oversight on the Executive branch. If he/she is aligned [with the government], that’s a flaw.”

When appointing Augusto Aras as Prosecutor General, Jair Bolsonaro turned his back on a tradition in place since 2003, by which the president would choose the new head of the prosecution service in accordance with a three-person list of nominees selected by professionals in the field. Over the last 17 years, only President Michel Temer selected the second-name on this list — Mr. Aras’s predecessor, Raquel Dodge. On all other occasions, Brazil’s presidents have chosen the prosecutor with the most votes among their peers. 

Augusto Aras wasn’t even on the list presented to Mr. Bolsonaro.

Beyond simply having been handpicked by the president, suspicions around the prosecutor general’s credibility are increased by subtle hints from Jair Bolsonaro that Mr. Aras could be in the running for a seat on the Supreme Court. Two justices will retire before the end of Mr. Bolsonaro’s term and the chance of a spot on the country’s highest court could be making Augusto Aras toe the government line.

This issue is repeated to exhaustion among legal scholars and Mr. Aras’s peers. “Even if the prosecutor general has a neutral legal view, without bias, the doubt and mistrust around his actions weigh heavily against the image of his office. It’s not enough to have integrity, in this case, it is important that society perceives him as someone who works without political bias,” stresses Mr. Mohallem.

The law professor points out another problem with the constitutional rules regarding the role of prosecutor general: the possibility of being granted a further term after two years. “If someone does the job independently, if they file complaints against the president, cabinet ministers — in other words, if they do their job properly — there is a chance that the president will not want to give the prosecutor another term, inhibiting their work.”[/restricted]

Brazil Daily

Bolsonaro gives up on international popularity

Today, a look into the Jair Bolsonaro UN speech and his international reputation. Growing optimism among industries. And a Supreme Court stalemate that harms Petrobras.

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Is Bolsonaro’s international reputation beyond repair?

President Jair Bolsonaro’s 14-and-a-half-minute speech at the 75th United Nations General Assembly [restricted]had a different tone from his 2019 address. One year ago, the Brazilian leader positioned himself in defiance to what his supporters call the “globalist order.” This time around, Mr. Bolsonaro seemed much more defensive and interested in addressing some of the world’s concerns around Brazil. But once again, his words seemed more targeted at his own supporters rather than an international audience.

Why it matters. In the words of Lucas Leite, a Ph.D. in international relations and a professor at the São Paulo-based Fundação Armando Álvares Penteado, it is as if Mr. Bolsonaro has given up on cultivating a positive image worldwide — instead using major international stages to talk to his own supporters. “At this point, only a radical shift in the government’s environmental policy would cast him in a better light — and that is unlikely to happen. The president’s bad reputation seems beyond repair,” he says.

No blame. As The Brazilian Report’s Débora Álvares revealed last week, Mr. Bolsonaro used the address to try and deflect responsibility for Brazil’s environmental crisis and the coronavirus pandemic. Click here for a breakdown of the key points in Mr. Bolsonaro’s speech.

Trump and the U.S. Mr. Bolsonaro made one noteworthy comment — once again positioning Brazil as an automatic ally of the U.S. in its continued tensions with China. In what could only be interpreted as a jab at Beijing, he said Brazil is open to the development of flagship technology, including 5G, with “any partner that respects our sovereignty, and cherishes freedom and data protection.”

  • To Mr. Bolsonaro’s point, there are increasing concerns that Chinese businesses may serve as Trojan horses for the Chinese Communist Party. Especially after a September 15 memo by the CCP’s top decision-making body called for closer ties between private Chinese firms and the United Front Work Department — the CCP’s bureau charged with extending its influence across society.
  • Still, there is a time and a place for these comments. Mr. Bolsonaro’s words sparked a reaction Chinese diplomats in Brazil. “We hope [Brazil’s 5G auction] will have objective, transparent, and non-discriminatory rules, respecting basic norms of the world economic system,” said Qu Yuhui, a counselor at the Chinese Embassy in Brasília.

EU. At no point did Mr. Bolsonaro extend an olive branch to the European Union countries that threatened to block a trade deal with Mercosur, citing environmental concerns. Instead, the president said Brazil is the “victim of a most brutal disinformation campaign” orchestrated by “shady interests coupled with exploitative and unpatriotic Brazilian associations.”

  • Then, in an act of defiance, Brazil’s Foreign Affairs Ministry released a statement saying that the non-ratification of the Mercosur-EU deal would “further aggravate environmental problems in the [Amazon] region.”

Industrial confidence to surpass pre-pandemic levels

Many industrial sectors have recovered their optimism toward the Brazilian economy, according to a preliminary study by the Brazilian Institute of Economics at Fundação Getulio Vargas (IBRE-FGV). 

  • Industries were the worst-affected businesses by the pandemic in Brazil, with an overall drop of 12.3 percent in Q2 2020 alone. In June, idleness was at a historic high of over 40 percent.

Why it matters. “This optimism signals that productive sectors may ramp up production,” writes economist Renata Mello Franco.

Expectations. Since social isolation measures began being lifted, industrialists regained confidence in their short-term future. In 16 out of 19 surveyed sectors, there was a reduction in idleness and an improvement in stock levels.

Supreme Court’s indecision harms Petrobras

Supreme Court Chief Justice Luiz Fux suspended an online trial about whether or not state-controlled oil giant Petrobras can slice up its assets into multiple subsidiaries with the goal of speeding up their privatization. A verdict shall be reached during an in-person trial instead, which has no date of yet.

  • A 2019 Supreme Court ruling established that the government cannot privatize public parent companies without a green light from Congress. However, it is free to sell off subsidiaries. Senate President Davi Alcolumbre has accused the government of using this decision as a way to circumvent Congress in its intent of privatizing “Petrobras’ strategic assets.”

Why it matters. “A suspension in the sale of Petrobras refineries could delay the company’s deleveraging plan,” read a Goldman Sachs report to clients.

The trial. Three of 11 justices have voted not to give Petrobras the right to surreptitiously privatize its assets. Still, brokerage firm XP expects the vote to go in the company’s favor — forecasting that the court will continue holding a more lenient position toward privatizations.

Bidding. Even with a favorable Supreme Court decision, the company said it could hold onto its assets if offers are not attractive enough. On Monday, Petrobras said it would open another round of bidding for a refinery in the state of Paraná, after considering the presented binding offers were too similar in value. 

Market. Over the course of the year, Petrobras shares have lost 32 percent in value.

What else you need to know today

  • Environment. The Justice Ministry will send national troops to help put out wildfires in the Pantanal wetlands. Around 19 percent of the biome has been destroyed this year alone, as a result of an increasing number of criminal fires combined with a severe drought. The Paraguay River, one of the largest in South America, is at worrisomely low levels, as rainfall has dropped 40 percent from the average of the past two years.
  • Voting. The Superior Electoral Court will test a vote-by-app system in this year’s November 15 election. While it will only be a mock vote — with fake candidates and parties — the trial will mark the start of a process to allow voters, in the future, to cast their ballots from home on their smartphones. Trials are set to be held in three municipalities, including São Paulo. 
  • Cannabidiols. A group of 29 senators have requested the government include cannabis-based medicines in the public healthcare system’s list of available treatments. Medicinal cannabinoids have been cleared by health regulators but are still very expensive in Brazil — this decision would make them more affordable. On Tuesday, however, President Jair Bolsonaro signalled he would be against such a move: “In my administration there will be no clearance for drugs. Agribusiness does not include marijuana,” he told supporters.
  • Argentina. According to Argentina’s official statistics agency, Indec, the country’s Q2 2020 GDP showed a 16.2-percent drop from the first quarter. Still, the numbers were slightly better than analysts’ forecasts. Compared to the same period in 2019, the Argentinian economy shrank 19.1 percent — falling deeper than during the major 2002 crisis — as the country imposed strict lockdown measures in mid-March. While some restrictions have been lifted since, many are still in place.
  • Impeachment. The Rio de Janeiro State Congress votes today on whether to begin an impeachment trial against Governor Wilson Witzel, accused of embezzling funds originally earmarked for the anti-coronavirus effort. It would take 47 out of 70 votes for the request to pass — which is highly probable, given that all impeachment-related votes have gone unanimously against Mr. Witzel until this point. If impeachment is approved, a committee of five lawmakers and five state judges will have 120 days to determine whether or not the governor is guilty of the accusations.[/restricted]

Bolsonaro’s misinformed address to the United Nations

In 2019, Brazilian President Jair Bolsonaro shocked the world with a speech at the United Nations that was filled with disinformation and elements of domestic culture wars — nothing for international consumption, but purely for his own support base in Brazil. On Tuesday afternoon, Mr. Bolsonaro’s second hurrah at the UN General Assembly touched on more international topics, but once again relied heavily on gaslighting the global audience — giving fact-checking agencies a field day.

In 14 and a half minutes, Mr. Bolsonaro made six false statements and five claims that were baseless or exaggerated.

Readers of The Brazilian Report already knew what to expect, as we reported last week that Mr. Bolsonaro had ordered his advisors to “dig up all the data that can put Brazil in a positive light compared to other countries.” 

The most noteworthy part of the speech, however, [restricted]concerned Brazil’s positioning between the U.S. and China — especially in light of U.S. President Donald Trump’s slim re-election prospects. (Statistics website FiveThirtyEight gives challenger Joe Biden a 77-percent chance to unseat Mr. Trump.)

Mr. Bolsonaro said Brazil is open to the development of flagship technology, including 5G, with “any partner that respects our sovereignty, and cherishes freedom and data protection.” One Brazilian diplomat, who requested to remain anonymous, told The Brazilian Report that this was a nod to the U.S.’s lobby for countries to ban Chinese firm Huawei from 5G auctions — “while leaving the door open for a U-turn if necessary.”

Later in his speech, the president would make two more gestures toward Mr. Trump. 

First, by lashing out at Venezuela’s “Bolivarian dictatorship,” just days after a visit by Mike Pompeo to the Brazil-Venezuela border, during which the U.S. Secretary of State called Venezuelan President Nicolás Maduro a “drug dealer.”

Then, he mentioned Mr. Trump by name in praising his Peace to Prosperity plan as a “promising vision [to reach a] much-desired solution to the Israeli-Palestinian conflict.”

What to make of Bolsonaro’s UN speech

Aware of his woeful international image, the president adopted a defensive stance, deflecting the blame for the coronavirus crisis — Brazil has the world’s third-highest number of cases and second-highest of deaths — and for the recent environmental disasters ongoing in the Amazon rainforest and Pantanal wetlands.

Instead, Mr. Bolsonaro pointed the finger at Brazil’s Supreme Court, state governors, indigenous groups, and alleged “shady interests” of global powers that want to prey on Brazil’s natural resources.

Below, we analyze the main points of Mr. Bolsonaro’s opening speech at the 75th UN General Assembly.

Coronavirus crisis in Brazil

Mr. Bolsonaro opened by briefly lamenting the almost 140,000 coronavirus deaths in the country. However, he claimed that from the beginning of the coronavirus crisis, he has alerted the country about two crises: the spread of Covid-19 and the imminent job apocalypse — adding that he said both should be treated with the same importance. On May 1, we showed that was false.

“Mr. Bolsonaro once again washed his hands [of responsibility] for the pandemic, blaming the only possible policy to fight the virus we know at this moment: social isolation. The president also undermined science and patted himself on the back for things he did not do to mitigate the crisis,” says political scientist Carlos Melo, a professor at the São Paulo-based Insper Business School.

The president also praised Brazil’s coronavirus emergency salary, which has reduced poverty in Brazil to unprecedented levels — albeit only temporarily — and helped millions of citizens who lost the entirety of their income during the pandemic. It is worth mentioning, however, that Mr. Bolsonaro’s administration originally wanted to pay much smaller benefits to the population — but was outmuscled by Congress. 

The environmental disaster

At no point did Mr. Bolsonaro own up to his administration’s faults in managing the environmental crisis, instead claiming Brazil is the “victim of one of the most brutal disinformation campaigns” in the world, carried out by “international institutions and exploitative and unpatriotic Brazilian associations” whose goal is to hurt the government and the country.

But it is impossible to fight with the facts. Since the beginning of the year, fires in the Pantanal wetlands have already destroyed 19 percent of the entire region — which is the largest wetland in the world. Also, at least 90 percent of the main conservation site dedicated to research in the area, the Sesc Pantanal Reserve, was ravaged by blazes.

Shifting attention from land to sea, Mr. Bolsonaro declared that, in 2019, “Brazil was a victim of a criminal oil spill caused by Venezuela,” that caused environmental destruction on the country’s north-eastern coast. However, the Brazilian Federal Police later ended its investigation without officially holding Venezuela responsible. While the oil was of Venezuelan origin, the Feds were unable to conclude whether the ship responsible for the spill left from Venezuelan ports, or whether the incident was in fact a criminal spill.

Bolsonaro on indigenous populations

In last year’s General Assembly speech, Brazil’s far-right leader was critical of the country’s indigenous activists. The traditional communities were not left out of Mr. Bolsonaro’s address on Tuesday either, with the head of state blaming indigenous people for burning the Amazon rainforest. But the Federal Police has already found evidence that landowners are the ones responsible for igniting wildfires, in order to clear space for pastures.

He also said the federal government “gave assistance to over 200,000 indigenous families with food products and Covid-19 prevention products.” In reality, Mr. Bolsonaro did the opposite, vetoing a piece of legislation that would force the government to provide these communities with safe drinking water, hygiene products, and hospital beds.

The Brazilian Report has already exposed the worrisome situation of Brazil’s indigenous groups during the pandemic. Until August 22, according to the Articulation of Indigenous People, at least 700 indigenous people died due to Covid-19 — but anthropologists say the real figures are much higher.

The economy and foreign trade

Brazil’s nonchalant approach to the environmental crisis might cost the country its biggest diplomatic success under Jair Bolsonaro: the signing of a free-trade deal between the European Union and Mercosur, after more than 20 years of negotiations. 

A group of eight European countries — which account for 10 percent of Brazil’s agricultural exports — have formally asked the Bolsonaro administration to take “real action” against deforestation in the Amazon, adding that “the current trend is making it increasingly difficult for businesses and investors to meet their environmental, social, and governance criteria.”

Meanwhile, a group of 30 NGOs, including Greenpeace France, demanded that French President Emmanuel Macron “bury [the EU-Mercosur deal] once and for all,” citing its potentially “disastrous” impacts on forests, the climate, and human rights.

Mr. Bolsonaro seemed unfazed by the pressure, claiming he trusts in Brazil’s efforts to advance these agreements and even supported an overhaul of the World Trade Organization (WTO) — one again, falling in line with U.S. President Donald Trump.[/restricted]