Giving “dirty money” a new meaning

On Wednesday, Senator Chico Rodrigues, the government’s deputy whip in the Senate, was targeted by a Federal Police investigation into the embezzlement of BRL 15 million earmarked for the fight against Covid-19 by members of Congress. However, while this story seems bad enough, as Brazilians say: the hole gets even deeper. The Feds found around BRL 30,000 in cash in the senator’s home, with part of the money soiled by being stashed “between his buttocks,” leaving little to the imagination.

Interestingly, the case surfaces just days after President Bolsonaro stated that there was no more corruption in the government. Furthermore, last week, Mr. Bolsonaro said that if someone steps out of line with regard to corruption, they will be met with “a flying kick to the neck.”

The case continues to shed light on how corrupt officials are using the emergency situation created by Covid-19 to fill their pockets — and underwear, apparently — with public money. 

In a video that resurfaced after yesterday’s events, Bolsonaro is seen praising Senator Chico Rodrigues, saying their relationship is “almost a stable union.” However, today, Mr. Bolsonaro affirmed that Rodrigues is not part of his administration, despite being his deputy whip in the Senate.

Could this be a new meaning for the term “dirty money”?

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Bolsonaro pushes for control in Rio de Janeiro

Though born in the state of São Paulo, it was in Rio de Janeiro that Jair Bolsonaro became a politician. Following his expulsion from the Army due to insubordination, Mr. Bolsonaro ran (and won) in eight consecutive races, one for Rio’s city council, and the rest for a seat in Congress, representing the southeastern state. It was also there that he ushered his ex-wife and three children into politics.

But Mr. Bolsonaro has never been a part of the Rio political establishment, which, in retrospect, worked to his advantage — Rio’s political elite has been ravaged by anti-corruption investigations, with every former state governor having been jailed at some point.[restricted]

Not even after winning the presidency with massive support in Rio de Janeiro did the president manage to wrestle control of the state. Instead, he saw Governor Wilson Witzel — who was elected on his coattails — break with the Bolsonaro family and present himself as a possible presidential challenger. At the municipal level, Rio Mayor Marcelo Crivella, an ally, is as unpopular as an incumbent can be. Moreover, his eldest son, Senator Flávio Bolsonaro, saw himself being investigated for running money-laundering while serving as a state lawmaker.

But, with the twists and turns Brazilian politics is known for, the Bolsonaros now seem in position to plant their family flag over Rio de Janeiro and control the state.

In August, the Superior Court of Justice suspended Mr. Witzel from office, following embezzlement and money laundering accusations. Since then, the president has made multiple public gestures to acting Governor Cláudio Castro, who is also under investigation, and has intensely worked behind-the-scenes deals to put allies in key positions in the Rio de Janeiro establishment.

After the Rio State Congress decided to open impeachment proceedings against Mr. Witzel in a 69-0 vote, his ousting seems all but certain. And Mr. Castro, who should soon become the governor full-time, will take over a state that is on the cusp of a full-scale financial collapse and in need of federal support — giving the president tremendous leverage to get the best out of his relationship with the state administration.

The beginning of a beautiful friendship

After being trusted with the state government in the most adverse of situations, Cláudio Castro spent six of his first 14 days as acting governor far away in federal capital Brasília, officially negotiating a renewal of Rio’s Fiscal Recovery Regime — a settlement with the federal government signed in 2017 to avoid Rio’s complete financial ruin. At one point, he posted on Twitter: “I’ve just gotten a call from Senator Flávio Bolsonaro, who put himself at our disposal to help the state of Rio.”

Days later, Mr. Castro flew on the presidential jet to attend the inauguration of the new Supreme Court Chief Justice, Luiz Fux.

“Alongside the [Rio] State Congress and our young governor, we will seek a way to bring Rio back from this dire situation. God willing, this way of doing politics will be left behind and a new era of politics will rise,” declared President Bolsonaro, two weeks ago.

If 21 months of Jair Bolsonaro as president have taught us anything, it is that his goodwill doesn’t come for free. The president demands unwavering loyalty from allies — and doesn’t take no for an answer when he wants to handpick names for public positions. And if Cláudio Castro wants to stay in Mr. Bolsonaro’s good graces, he better play ball.

Setting up the chessboard in Rio de Janeiro

The Bolsonaros have had their eyes on Rio’s law enforcement agencies ever since the family rose to national prominence. The president’s willingness to control the Federal Police state superintendency there led to a fallout with former Justice Minister Sérgio Moro. Late in March, Mr. Bolsonaro told Mr. Moro, via a text message: “You already have 27 superintendencies. I only need one [Rio].”

Now, the family has its sights set on the State Prosecution Office. Eduardo Gussem, the current head of the department — and responsible for presenting criminal charges against two of Jair Bolsonaro’s children — ends his current term in December. And it will be up to the acting governor to choose a replacement. 

The name of the Bolsonaros’ favorite for the job, ultra-conservative prosecutor Marcelo Monteiro, has made its way to Mr. Castro.

Indeed, one consequential change to cater to the First Family has already taken place. In mid-September, Allan Turnowski was named chief of the Rio de Janeiro Civil Police after Senator Flávio Bolsonaro personally endorsed him to the acting governor, as sources told The Brazilian Report.

Since taking office, Mr. Turnowski has already swapped out the heads of 70 police divisions and precincts. When asked, he claims none of these changes were politically motivated.

Since Claudio Castro was named Rio’s acting governor and got closer to the Bolsonaros, a series of personnel changes have been made in the state’s security apparatus, with all of the new faces linked to the Bolsonaro family.

Among aides, President Jair Bolsonaro is described as having a persecution complex, made worse by the stabbing he suffered during the 2018 presidential campaign — as well as reports (later debunked) tying him to the murder of City Councilor Marielle Franco.

Officials who are aware of the president’s maneuvers to take control of Rio de Janeiro’s politics mention another reason for his moves: a willingness to control and contain investigations into his two eldest sons, who are accused of running rudimentary money-laundering schemes within their public offices in the state.

For a family who was once made out of bottom-feeders in Rio de Janeiro’s shady political scene, the Bolsonaros are now the most popular political figures in the country. However, President Bolsonaro’s goals in power have always seemed provincial — targeting his home state and making life easier for his family and allies, thus his full-blown assault on the political structures in Rio de Janeiro.[/restricted]


A premature end to Brazil’s debate season

While casting a cursory glance over the U.S. presidential debates of recent weeks, Brazilians could be forgiven for feeling a little smug. The “shitshow” of constant interruptions and rule breaches in both the presidential and vice-presidential showdowns would be unthinkable in Brazil, despite its own penchant for off-the-wall and over-the-top political spats.

Indeed, were the September 29 debate in Cleveland, Ohio between Donald Trump and Joe Biden to have taken place in Brazil, Mr. Trump would have had his microphone cut on several occasions, both candidates would have been granted the right of reply, and they would be flanked by at least half a dozen other competitors representing a selection of Brazil’s 33 (!) political parties.[restricted]

Granted, Brazil’s pluralist approach to political debates is far from ideal, though it is marginally more intriguing than equivalents in the U.S. and the United Kingdom, featuring less than a handful of candidates from never-changing parties. And with municipal elections on the horizon, Brazil is going through its own debate season, which — as has been the case in the Trump v. Biden race — has been cut short due to Covid-19.

One and done

Major cities around Brazil held their first televised mayoral debates at the beginning of October, broadcast by major network Band. However, with a large number of candidates present and increased Covid-19 risks, four broadcasters have canceled their future debates in São Paulo, a decision repeated in several other cities.

Members of campaign teams are resigned to the fact that no more debates will take place — which, in Brazil’s biggest city São Paulo, is seen as favorable to the Bolsonaro-backed frontrunner Celso Russomano.

Candidates driven round the bend in Porto Alegre

One of the strangest solutions was tested in Porto Alegre, the largest city in Brazil’s South region. With a grand total of 13 candidates, local radio station Rádio Gaúcha gathered the whole baker’s dozen into what appeared to be the parking lot of a seedy motel. Each competitor remained inside their own cars — except for Júlio Flores, the candidate for the Trotskyist PSTU party, who was given a lift to the debate and sat in the passenger’s seat — while they fired questions at each other.

Arguably this wasn’t the most glamorous of settings for frontrunner Manoela D’Avila, going from being the would-be vice-president to 2018’s defeated presidential candidate Fernando Haddad to sitting behind the wheel of a Kia Sportage SUV asking for votes.

However, beyond the scripted automobile puns — one candidate was asked if he was prepared for “rough terrain” after turning up in a 4×4 — the debate largely went off without a hitch.

TV network Band went for a slightly more conventional approach in their debate the following week, though kept candidates waiting in a green room-cum-classroom, calling two at a time to ask questions.

The future of the political debate

With Covid-19 drastically changing how politicians are able to campaign, the cancellation of debates may see this long-held institution of pre-election politics be put to bed for good. In the U.S., amid the constant rule-breaking in Trump v. Biden and a fly stealing the show in Pence v. Harris, the electorate may well be wondering whether they are simply better off canceling debates for good.

Indeed, televised debates that are productive in any political sense are very few and even farther between. Platforms and proposals are rarely discussed in any depth or detail, with the content of the debate far more likely to descend into a slanging match or a mutual back-scratching session between allied candidates.

Politicians know that debates are one of the least effective ways to present their proposals and get their points across. Indeed, their main campaigning front has gone online. Candidates in the São Paulo mayoral debate illustrated this perfectly, constantly referring viewers to log onto their YouTube, Instagram, or Twitter feeds for more in-depth explanations.

Clearly, however, scrapping debates altogether is removing a level of accountability to which candidates should be held. In the 2018 presidential election, Jair Bolsonaro floundered during his only debate appearance — at which a television camera spotted crib notes written on his hand, reading “opinion poll, Lula, guns” — and then point-blank refused to attend any future discussions, using his health as an excuse.[/restricted]


Ceará Governor Camilo Santana tests positive for coronavirus

Camilo Santana, governor of the Northeastern state of Ceará, announced on Twitter that he has tested positive for the coronavirus. His wife Onélia had already been diagnosed with Covid-19 on Monday. 

Mr. Santana said he is “feeling well,” despite showing “some flu-like symptoms.” Regardless, the governor’s schedule has been entirely cleared for in-person events and meetings until he recovers.

Camilo Santana became the 16th Brazilian state governor to catch the coronavirus (out of 27). None have developed severe infections, however.


Explaining Brazil #128: Elections in the Time of Covid-19

In just over a month, Brazilians will go to the polls to choose their new mayors and city councilors. In previous episodes of the podcast, we have discussed the major sanitary implications these municipal elections may cause. Brazil has no system for mail-in ballots, which we see in the U.S., or vote-by-proxy, as they have in France, and the Brazilian voting system is, by design, a health hazard in coronavirus times. 

But this week, we want to tackle the political implications of the municipal races. For a foreign audience, mayoral races may seem too parochial, but they actually have a significant impact on national politics. And what happens in November 2020 will ripple over until 2022.

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On this episode:

  • Filipe Campante is an associate professor at the Johns Hopkins University School of Advanced International Studies. He is interested in political economy, development economics, and urban/regional issues. His research looks at what constrains politicians and policymakers beyond formal checks and balances: cultural norms, institutions, media, political protest.

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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]


Tech Roundup: Can WhatsApp curb fake news in the 2020 election?

You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: Brazil’s efforts to curb misinformation on WhatsApp ahead of the elections, e-commerce performance with Black Friday on the horizon, and the dreadful cybersecurity scenario for Latin America’s company’s and individuals. 

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Electoral courts and WhatsApp team up against fake news. Will it work? 

One and a half months before the 2020 municipal elections, [restricted]Brazil’s Superior Electoral Court launched a new bot, in partnership with WhatsApp, to increase access to reliable information both on sanitary measures and electoral rules. While experts recognize the good intentions of the initiative, they say the fight against misinformation needs broader strategies.

How the bot works. Users must add a number provided by the Electoral Justice system to their list of contacts in order to interact with the bot. Then they will receive messages with information about their polling station, which safety measures to observe when heading out to vote, as well as fact-checked news on the election.

  • There will also be a dedicated channel to denounce numbers that send mass messages during the campaign — which is forbidden by local electoral legislation. This feature, though, will be deactivated by December 19.

Step in the right direction. Débora Albu, coordinator of democracy and technology at think-tank ITS Rio, tells The Brazilian Report that structuring an anti-fake news strategy around WhatsApp — used by almost all Brazilian smartphones — is “very positive.” 

  • “Voters don’t need to leave a platform they already use, they don’t need to create new digital skills. The process is very simple and this is crucial.”
  • Plus, the partnership with Facebook — which owns WhatsApp — points in the direction of a partnership between the public sphere and the private sector that might come in handy during elections. “Unlike 2018, there is now an attempt to join solutions and new initiatives, so you have a unified front,” she said.

Yes, but … Ms. Albu warns the only way to tackle such a complex issue is through a more comprehensive strategy, involving political and media education — something a simple WhatsApp bot cannot handle. 

Regulation. Previously heralded as one of the pinnacles of Congress’s reaction to misinformation, the controversial “fake news bill” remains far from approval.

Digital campaigns. Official campaigns began on September 26, but mayoral candidates launched their online strategies on Facebook, Twitter, and WhatsApp weeks or months ago. 

  • After Jair Bolsonaro won the presidency in 2018 with a campaign almost entirely conducted on social media and WhatsApp group chats, politicians have become obsessed with their online presence. But followers do not strictly translate into votes — and the most engaging candidates on social media are not the ones who are polling the best.
  • “That’s because engagement doesn’t only come from supporters, but also from people who want to confront candidates.”

Brazilian e-commerce losing steam? 

After breaking records earlier in the year, Brazilian e-commerce shrank 9 percent in August, according to data from the Brazilian Chamber for E-Commerce. While sales raised 75 percent more money than in August 2019, year-on-year growth was at 136 percent back in May.

Why it matters. Big retailers have poured millions into improving their online sales channels, but e-commerce sales are decreasing as brick-and-mortar shops reopen.

Capital markets. All of Brazil’s top 4 retailers saw share prices drop by as much as 21 percent in September.

  • Stocks analyst Eduardo Guimarães, of Levante Investimentos, points out that the sector has seen expressive gains over the year. As Nasdaq and Ibovespa lost steam in September, investors saw an opportunity for profit-taking.
  • In Brazil, retail companies such as Via Varejo became favorites among retail investors, which may have caused trading volumes to boom temporarily. “The frenzy has died down a bit,” says Mr. Guimarães. 
  • Institutional investors are betting on e-commerce. BTG Pactual bank replaced traditional retailer Lojas Americanas with Magazine Luiza on its monthly recommended portfolio, saying the latter is “well-positioned to continue growing above the market.”

Challenges. As retailers prepare for Black Friday, Amazon Inc will host its first Prime Day in Brazil on October 13 and 14. Besides being a proxy for the biggest shopping sprees in the year, it could also spell trouble for competition.

Yes, but… It’s not the first time the market has jumped the gun in response to Amazon’s moves. When the American giant announced it was expanding to Brazil, domestic retailers’ stock melted, but Amazon has since taken a very cautious approach to the Brazilian market.

Holiday season. Q4 is traditionally the best time of the year for retailers. “However, sales could be hurt by weak brick-and-mortar sales,” Mr. Guimarães tells The Brazilian Report.

Brazilian companies targeted by cybercriminals

A new report by cybersecurity firm Kaspersky shows that Brazil is home to 56 percent of all cyberattacks in Latin America. From January to September, Kaspersky noted 37.2 million attacks on companies in the continent and another 20.5 million to home users. 

Remote work. The Remote Desktop Protocol (RDP), which allows users to connect to other computers, suffered 517 million attacks in the region. The peak happened in April, coinciding with the beginning of several quarantines in Latin America.

  • “The adoption of remote work made it easier for cybercriminals to attack systems that were not available on the internet,” said Dmitry Bestuzhev, head of Kaspersky’s GReAT team in Latin America.

Vulnerability. Though it is the most targeted, Brazil isn’t the most insecure place. According to the report, Argentina has the highest “coefficient of attack” — the proportion of attacks per capita — for both companies and home users. 

  • However, Brazilians are the most vulnerable to attacks on mobile devices. The country recorded 63 percent of the 1.2 million attacks of this kind reported during the period. 

Take note

  • LGPD. Homebuilder Cyrela was the first company fined on the grounds of the General Data Protection Law in Brazil. The company was found guilty after a customer sued it for being spammed with emails from Cyrela’s partners, evidence that the homebuilder shared his data without consent. Cyrela now has to pay BRL 10,000 in compensation and an extra BRL 300 for every undue attempt to contact the customer.
  • SMB. A new report by consultancy Neotrust/Compre&Confie shows that online sales by small- and medium-sized businesses in Brazil nearly doubled between February and August, bumping revenue by 118 percent. The leading segment was home appliances, with a near 400-percent growth, followed by furniture (+241%), decor (+217%), health (+212%), and cameras and drones (+205%).
  • Acquisition. Bitz, the digital wallet launched by Bradesco a few weeks ago, has already made its first acquisition: buying fintech DinDin for an undisclosed amount. The deal comes as Bitz tries to obtain knowhow to achieve its goal of grabbing a  25-percent market share in digital wallets in Brazil over the next three years. 
  • Startups. Google launched its Growth Academy initiative in Brazil. The ten-week program offers mentorship and teaches growth techniques to startup leaders that already have some market traction. The first edition will be fully digital due to Covid-19 and will include companies such as health food startup LivUp, cosmetics brand Sallve, and pet store Zee Dog. 
  • Digital Ecosystem. Data from think-thank Distrito obtained by newspaper O Estado de S.Paulo shows that large companies purchased 100 startups in Brazil between January and September — the largest number on record. The trend is propelled by digital transformation needs, the urge to launch new business fronts, and the availability of capital due to an environment of low interest rates. 
  • Unicorn. Fintech dLocal became Uruguay’s first unicorn in September, with a USD 1.2 billion valuation. It reached the milestone after a new USD 200 million funding round led by General Atlantic. The company offers payment solutions in Asia, Latin America, and Africa, with high-profile customers such as and Nike. 
  • Crowdfunding. The Brazilian Securities Commission canceled the operating permit of crowdfunding platform Finco Invest after several irregularities, including fraud, acting as qualified investors without having the due certification, and lack of due diligence processes. 
  • Agritech. Sugar and bioethanol group São Martinho teamed up with Ericsson to launch a 5G pilot in one of the group’s sugarcane plantations in São Paulo state. The new network will allow them to connect trucks and machines and speed up the harvesting process from 2021 on. If it works, the partnership will be expanded to other plantations of the group and new products and services both companies aim to offer in the market. 
  • Drones. Food delivery app iFood will test drones to deliver meals in the city of Campinas, in the state of São Paulo. The restaurants will take the food to hubs where the drones are stored. Then, the machines will fly to delivery centers and, from there, couriers will drive it to consumers. iFood believes that, in some routes, the process may shorten delivery times from 10 to 2 minutes. The tests are expected to last for 12 months and, if they succeed, the model may be adopted in another 200 cities.[/restricted]

Curitiba mayor admitted to hospital with Covid-19

Rafael Greca, the mayor of the southern city of Curitiba, was admitted to a hospital along with his wife after the couple showed severe Covid-19 symptoms. According to the mayor’s press office, the pair suffered from pneumonia days after testing positive for the coronavirus. Aged 64 and overweight, Mr. Greca is considered an at-risk patient.

The city of Curitiba has confirmed over 43,000 Covid-19 infections and over 1,200 deaths so far.

Mr. Greca is running for re-election this year and was taken to the hospital on his second day of campaigning. His administration enjoys an approval rate of 71 percent, and he is heavily favored to win come November. A recent poll shows him polling over 40 percent — almost 30 percentage points ahead of any other candidate.

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Coronavirus Power

Brazil Senate goes back work after high-profile Covid party

After a six-month coronavirus hiatus, the Brazilian Senate is once again holding in-person sittings. And the upper house hasn’t beaten around the bush, approving a request to summon Foreign Minister Ernesto Araújo to provide clarifications about the visit of the U.S. Secretary of State Mike Pompeo to the Brazil-Venezuela border.

But while a return is necessary — Congress has conducted its debates and votes remotely, but the pandemic has halted all activity in issue-based committees — it seems ill-timed. Senators are returning to meet in person just 12 days after a massive dinner party held at the official residence of House Speaker Rodrigo Maia, who has since tested positive for the coronavirus.[restricted]

The Covid party

The September 9 event — gathering everyone who’s anyone in Brasília politics — was in celebration of the inauguration of Luiz Fux as the new Supreme Court Chief Justice. Members of Congress were in attendance, as well as members of high courts, and prominent business owners.

While no-one is keen to owe up to the fact, The Brazilian Report was able to confirm that — beyond Mr. Maia and the guest of honor, Chief Justice Fux — among those in attendance were next-door neighbor Senate President Davi Alcolumbre, senators Nelsinho Trad and Chico Rodrigues, and lower house members Baleia Rossi, Carlos Sampaio, Efraim Filho, Fábio Trad, Marcos Pereira, Aguinaldo Ribeiro, and Arthur Lira. 

On the day after Luiz Fux was sworn in as Chief Justice, at least six authorities confirmed they had contracted Covid-19. Besides Mr. Maia and Chief Justice Fux, Attorney General Augusto Aras, head of the Superior Labor Court Maria Cristina Peduzzi, and Superior Court of Justice members Luís Felipe Salomão and Antonio Saldanha Palheiro. 

In the Senate, 38 of the 81 members are aged over 60, and several suffer from pre-existing conditions that pose Covid-19 risks, such as obesity and high blood pressure. The chamber’s press office did not respond to The Brazilian Report‘s inquiry about how many senators have been infected by the coronavirus, saying it “habitually does not divulge Covid-19 case numbers among its employees and members.”

According to Agência Senado, six senators had contracted Covid-19 until June, including Senate President Alcolumbre.

The Senate’s return to work is regulated by a normative act issued last week, which sees the installation of hand sanitizer dispensers at strategic locations in the chamber, increased distancing between senators on the floor, and ‘drive-thru’ voting stations allowing at-risk politicians to stay out of the main chamber.[/restricted]


2020 Election: What is at stake in São Paulo and Rio

Brazil’s mid-term municipal elections are often seen by parties as a dress rehearsal for national races. History suggests that local disputes often anticipate trends that we will observe two years later, when presidential and gubernatorial candidates square off. In 2020, the municipal election will be as national as ever, with all the main presidential hopefuls using the November 15 vote to set up alliances that could carry them over the finish line in 2022.

In this game, São Paulo and Rio de Janeiro are disproportionately important, as the country’s two most-populated and wealthiest cities — with a combined GDP of nearly BRL 1 trillion (USD 190 billion), or 10 percent of the Brazilian economy. These two cities alone, account for over 9 percent of the Brazilian electorate.

Both races, however, are up in the air, less than two months before Election Day. We explain what is at stake in each of them.[restricted]

Key points in the 2020 election

  • While reelection rates are extremely high in state and national races, the same doesn’t happen for municipal disputes. The percentage of mayors who were granted a second term has continually decreased since 2008 to an all-time low of 21 percent in 2016.
  • The Brazilian Social Democracy Party (PSDB) will try to preserve its dominance in major urban centers. Of Brazil’s biggest 96 cities, the PSDB is the ruling party in 30 of them. That is thanks to its continuous shift towards a “hard right” after leaving power in 2002 (especially on crime-related issues) and consolidating itself as the main opposition force against the Workers’ Party until Jair Bolsonaro emerged on the national scene. It remains to be seen how the rise of  Mr. Bolsonaro will disrupt PSDB’s prestige among conservative voters.
  • Meanwhile, the Workers’ Party is toothless and its power resides in smaller, poorer cities. Back in 2008, when then-President Luiz Inácio Lula da Silva had 80-percentish approval ratings, the party snatched up 25 of the country’s 96 biggest cities — more than any other political group. But in the 2020 election it held none of these cities. Both in São Paulo and Rio de Janeiro, however, the party has picked veteran candidates who lack the capacity to galvanize its own militants, let alone disillusioned voters in two cities where the Workers’ Party has become a bogeyman for large parts of the electorate.
  • We also must keep an eye on what role President Jair Bolsonaro will play in the election. As we anticipated in September 15 Daily Briefing, the president has refrained itself from publicly endorsing any candidate before the runoff stage, but is engaged in backstage negotiations with the goal to hurt his political enemies — i.e. the Workers’ Party and former Health Minister Luiz Henrique Mandetta. However, as a Bolsonaro aid told The Brazilian Report, “the president is unpredictable, and could decide to do a photo op with a candidate of his choice out of the blue.”

São Paulo’s mayoral race

The São Paulo mayoral race still has no clear-cut favorite, according to consultancy Atlas Político. The first major poll of this electoral cycle shows incumbent Mayor Bruno Covas polling at 16 percent — with left candidate Guilherme Boulos and Congressman Celso Russomano tied in second place, with 12 percent each. Meanwhile, 13 percent of voters in Brazil’s largest city still don’t know who they will vote for in November. 

Mr. Covas apparently has the inside lane, but it remains too early to slap him with the favorite tag. With the pandemic, the election has remained as a background subject — and early polls usually reflect more name recognition rather than popularity. He is backed by Governor João Doria — who has been quite open about his own presidential ambitions. A display of strength in São Paulo could help enhance his profile with voters outside of his home state.

Meanwhile, Mr. Russomano has tried all sorts of alliances over the past few weeks, but has come out still empty-handed. Still, he enjoys Mr. Bolsonaro’s sympathy — and could have his support should he reach the runoff stage, which is far from a certain thing. “Celso Russomano usually has strong polling numbers at the start of the mayoral race, but then his candidacy loses steam,” says Cristiano Noronha, a political scientist at consultancy Arko Advice. 

“However, support from Jair Bolsonaro could change his fortunes.” In 2018, the president won 60 percent of São Paulo votes in the runoff election.

The race in Rio de Janeiro

It is no overstatement to say that Rio de Janeiro is facing a municipal election while it descends further and further into a true political hell. Mayor Marcelo Crivella has just escaped his fifth impeachment, amid investigations that he ran a mafia-like scheme within City Hall to embezzle public funds — and launder money through evangelical churches.

But corruption allegations are not even the biggest obstacle in Mr. Crivella’s way. His administration has been rated as “disastrous” by most observers, and only 14 percent of voters approved of his job, according to a March 2020 poll. The city is nearly bankrupt, and most basic services are subpar at best. For 68 percent of voters, the municipal healthcare system is the city’s biggest problem — topping by far concerns about urban violence. 

Don’t expect any push for renewal in Rio, as the race’s head-and-shoulders favorite is Eduardo Paes, Mr. Crivella’s predecessor, who is vying for a third term as mayor. However, he has been recently accused by state prosecutors of pocketing BRL 10.8 million from construction group Odebrecht during his 2012 re-election campaign. He dismissed the probe as an attempt to interfere with the upcoming municipal elections.

But even Mr. Paes has not been able to excite voters. His leading 19-percent polling is below the 22 percent of voters who intend to spoil their ballots on November 15.[/restricted]

Brazil Daily

Food insecurity hit 10.2 million Brazilians before the pandemic

Today, we talk about the food insecurity problem in Brazil — which inflicts a major human and economic toll on the country. The issues with vacancies in regulatory agencies. And the multiple impeachment cases across Brazil. 

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Brazil back on the Hunger Map

Brazil has made its unwelcome return to the [restricted]world’s Hunger Map — the list of countries in which over 5 percent of the population is food insecure. New data from the Brazilian Institute of Geography and Statistics shows that, in 2018, 4.6 percent of households face severe food insecurity. In just five years, over 3 million Brazilians moved into the category of those who have nothing to eat on a regular basis, the total number in the country in this category stands at 10.2 million.

Why it matters. The data refers to 2018 — meaning that the post-pandemic situation might be even worse. “In 2020, people who were already in informal, precarious jobs have now lost their income,” says economist Marcos Andrade, a professor at São Paulo’s Mackenzie University.

  • Due to budgetary constraints, the government has halved the coronavirus emergency salary to vulnerable populations, now valued at BRL 300 (USD 57). For the country’s poorest 10 percent, the cut resulted in an immediate 44-percent loss in purchasing power.
  • Moreover, access to food products has been reduced due to recent price hikes. Back in February, BRL 100 (USD 19) could buy 21 kilos of brown beans; now, it is only enough for 14 kilos. The same amount bought 35 kilos of rice in February–– buys only 26 kilos now.

Inequality. Food security data offers a clear picture of Brazil’s deep-rooted inequalities. Hunger is more prevalent in rural areas, among blacks and multiracial people, and in single-parent homes. 

Compromised future. Half of Brazil’s children under five years old live in food-insecure households. Besides the immense human impact, Brazil’s inability to protect its population from malnutrition will have major effects. According to the Global Panel on Agriculture and Food Systems for Nutrition, nutrition problems incur costs through impaired learning, poor school performance, compromised adult labour productivity, and increased health care costs.

  • Adult earnings are reduced by 2.4 percent for every 1-percent loss in potential height. 

The problem with Brazil’s regulatory agencies

The General Data Protection Law comes into effect today, but without a regulatory body to monitor how to implement the new rules on how to handle customers’ personal information. Despite an August 26 decree detailing the structure and responsibilities of the National Data Protection Agency (ANPD), the government has yet to appoint any of its five board members. Who in turn will need to be confirmed by the Senate.

  • A total of 43 business associations urged the government to take swift action, warning that the lack of a regulatory body would incur unnecessary litigation and insecurity about how the new law will be interpreted.

Big picture. The ongoing woes with the ANPD are part of a bigger issue: it has been 14 months since the government last appointed anyone to the country’s 11 regulatory agencies. Currently, interim members occupy 40 percent of board seats.

Who’s to blame. While the government’s incompetence is certainly to blame, the Senate also bears some responsibility for this situation. Senate President Davi Alcolumbre has held off confirmation hearings when the names put forward by the administration did not suit his interests. The same scenario happened with antitrust watchdog Cade and the National Civil Aviation Agency (Anac) as well.

Why it matters. Seen as the “fourth level” of governance in Brazil, the decisions of regulatory agencies can have a huge impact on the daily lives of the population, establishing rules and standards in a number of key sectors

How impeachment day went

Thursday was an eventful and unusual day — even by the standards of Brazilian politics. A total of three impeachment cases were heard before local legislatures, concerning two state governors and the mayor of Brazil’s most famous city. Here is what happened:

  • Rio de Janeiro (state). In a whopping 24-0 vote, a special committee authorized the State Congress to hold an impeachment trial against suspended Governor Wilson Witzel. He is accused of embezzling funds earmarked for the fight against Covid-19. The unprecedented unanimous vote suggests that Mr. Witzel’s case is beyond salvation.
  • Rio de Janeiro (city). Meanwhile, the state capital’s City Council decided — in a 24-20 vote — not to open impeachment proceedings against Mayor Marcelo Crivella. He is under criminal investigation for allegedly siphoning public money and laundering it through evangelical churches. This marked the fifth time Mr. Crivella escaped impeachment proceedings.
  • Santa Catarina. Governor Carlos Moisés is accused of fiscal irresponsibility, for granting wage bumps to state prosecutors without authorization from lawmakers. In a 33-6 vote, lawmakers decided to move forward with the impeachment process. Now, a committee formed by five lawmakers, five state judges, and the president of the Santa Catarina Court of Justice will have five days to weigh on the accusations and issue a recommendation to the State Congress floor — who will then vote on whether or not to impeach Mr. Moisés.

What else you need to know today

  • Business. The services sector is the backbone of the Brazilian economy. But a recent study by think tank Fundação Getulio Vargas shows that, once government aid programs to businesses finish, 25 percent of companies in the services sector will layoff employees or permanently close. Among businesses which plan to fire staff members, 10 percent say layoffs could affect up to 20 percent of their employees.
  • Diplomacy. U.S. Secretary of State Mike Pompeo arrives today in Boa Vista, in Brazil’s northernmost state of Roraima, to discuss the migration of Venezuelan citizens. Mr. Pompeo will meet with Foreign Minister Ernesto Araújo before heading to Colombia for a meeting with President Ivan Duque.
  • Environment. Next week, the Supreme Court will hold a public hearing to discuss how the government is managing a fund to promote environmental protection programs. In the days leading up to the hearing, the Environment Ministrytried to unfreeze funds which have been left untouched for the past year and a half — approving BRL 530 million (USD 101 million) for actions meant to combat climate change.
  • Justice. Supreme Court Justice Marco Aurélio Mello has suspended a deposition President Jair Bolsonaro was set to give next week — as part of an investigation into whether or not he illegally interfered with the Federal Police. Another justice had ordered Mr. Bolsonaro to give an in-person testimony (instead of a written one), but Justice Mello delayed the process until the full Supreme Court bench weighs in on the issue. A trial date must be set by Supreme Court Chief Justice Luiz Fux.
  • Reforms. The government’s whip in the House, Congressman Ricardo Barros, said on Thursday that the administration believes it is possible to approve two major reforms — an overhaul of the federative pact, which sets new responsibilities for states, municipalities and the federal government, and the civil service reform —  before the end of 2020. However, as we showed earlier this week, the median time frame for lawmakers to pass constitutional amendments is no less than 246 days. It takes even longer during election years such as 2020–– 327 days.[/restricted]

It’s impeachment season in Brazil

It has become a cliché to say that the pandemic has precipitated processes that already existed. For Richard N. Haass, president of the Council of Foreign Relations, “Covid-19 will not so much change the basic direction of world history as accelerate it.” In the case of Brazilian politics, this accelerated history means a faster process of political degradation. On September 17, a grand total of three separate impeachment proceedings will be voted on by legislators — which could result in the ousting of two state governors and one mayor.

To borrow from Tolstoi, every administration close to impeachment is crumbling in its own way. So we break down what is at stake here.[restricted]

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From left to right: Wilson Witzel, Carlos Moisés, Marcelo Crivella

Suspended Rio Governor Wilson Witzel

Of all high-profile politicians facing impeachment, none looks more doomed than Rio de Janeiro’s suspended Governor Wilson Witzel. He is accused of siphoning funds from the state’s Covid-19 emergency budget and launder kickbacks through his wife’s law firm.

Back in June, lawmakers opened impeachment proceedings in an unprecedented 69-0 vote against Mr. Witzel, showing how politically weak the Governor has become. His suspension also deprives him of his ability to distribute patronage which can be so persuasive in such situations.

At this point, a committee of 25 state lawmakers will decide whether or not to start an impeachment trial against Mr. Witzel — and anything other than a green light would be a shocker.

UPDATE: The committee unanimously voted for the impeachment process to continue, in yet another sign of Mr. Witzel’s lack of political support.

Mr. Witzel’s downfall is set to be as meteoric as his rise. In Rio’s 2018 gubernatorial race, he went from unknown candidate to winner in a matter of days, riding the conservative wave headed by Jair Bolsonaro. But after presenting himself as a possible challenger in the 2022 presidential election, relations between the two soured.

Rio de Janeiro Mayor Marcelo Crivella

Marcello Crivella has proven to have many political lives. Despite overseeing an administration deemed as “catastrophic” by almost everyone, he has escaped four impeachment requests — the last of which was voted down just two weeks ago.

This time around, Mr. Crivella is accused of running a corruption ring inside City Hall, using evangelical churches (he is a preacher ) to launder the embezzled money. 

City councilors will vote on whether or not to kick-off an impeachment process, but despite the ongoing criminal investigation against the mayor, he is set to dodge impeachment yet again. Mr. Crivella is likely to limp his way into the November election, when he will ask for a new four-year term.

UPDATE: In a 24-20 vote, city councilors rejected the impeachment request, with six abstentions.

Santa Catarina Governor Carlos Moisés

Conservative Governor Carlos Moisés is accused of fiscal irresponsibility, for granting wage bumps to state prosecutors without authorization from lawmakers.

The impeachment process against him, as a matter of fact, is at a later stage than those of Messrs. Witzel and Crivella. A report recommending his ousting has been approved by a special committee, and now a roll call vote will seal his fate.

It will take 27 of the State Congress’ 40 members to remove Mr. Moisés.

UPDATE: Santa Catarina lawmakers voted in favor of opening impeachment proceedings against Carlos Moisés. Now, a committee formed by five lawmakers, five state judges, and the president of the Santa Catarina Court of Justice will have five days to analyze the accusations against the governor.


Latin America

Coronavirus in Latin America: a tale of failed leadership and inequality

The first confirmed Covid-19 infection in Latin America occurred precisely six months ago when a 61-year-old man tested positive for the disease in São Paulo. Despite having weeks to prepare for the arrival of a virus that was already disrupting societies in Asia and Europe, most Latin American nations have decidedly lost the battle against Covid-19. In the past six months, the region quickly became the world’s epicenter for the coronavirus pandemic.

Many have succumbed to the temptation of placing the blame solely on national governments. After all, it is hard to dispute that Brazil’s Jair Bolsonaro or Venezuela’s Nicolás Maduro have actively made the crisis worse than it should be. The former did everything in his power to undermine social distancing efforts implemented by Brazilian state governors, while the latter went as far as calling patients infected with Covid-19 “bioterrorists.” Meanwhile, both have touted unproven treatments against the coronavirus, acting as disinformation agents.

But the reality is far more complex. Even in countries where the pandemic was taken seriously from the start — namely Argentina and Peru — infection and death curves have now spiraled out of control. And that is because of a deeply-rooted problem in the region: inequality.

For tens of millions of Latin Americans living in poor housing conditions, social distancing is not an option. Moreover, the region’s economy is extremely informal, being highly concentrated in sectors that depend on the functioning of the in-person economy — meaning that it is impossible for governments to keep their populations at home indefinitely. Quarantines can only work for so long before economic needs begin to throttle the population.

In an August 17 report, the Inter-American Development Bank (IDB) said that at least 23.9 million jobs were lost in Latin America, affecting 12.5 percent of the total workforce in the region. Meanwhile, the Economic Commission for Latin America and the Caribbean (ECLAC) estimates that trade in the region will fall 23 percent in 2020, a bigger skid than in the 2008-2009 financial crisis.

Besides the boom of informal jobs, the political impact of the coronavirus pandemic is already a reality. 

In Bolivia, self-appointed interim President Jeanine Áñez is using the pandemic as an excuse to prolong her time in office — despite promising to act as a stopgap president between the coup that ousted Evo Morales last year and democratic presidential elections.

In Brazil, the pandemic forced the government into creating an emergency salary for informal and unemployed workers, which has become the only source of income for 14 million people — and drove President Jair Bolsonaro’s approval ratings to their highest levels ever.

In other countries, leaders fear the coronavirus crisis could lead to their demise. That is the case with embattled Chilean President Sebastián Piñera, as well as Nicaragua’s authoritarian leader Daniel Ortega.

It remains too early to predict what post-pandemic Latin America will look like. However, it is safe to say that the economic depression — coupled with the sheer human toll of the coronavirus — will leave many scars on what was already the world’s most unequal region.

Here is how the pandemic has affected some of the region’s key economies:

Brazil (3.7 million cases, 116,580 deaths)

Key dates:

  • February 26. A 61-year-old man in São Paulo becomes the first confirmed Covid-19 patient in the region.
  • March 12. Fábio Wajngarten, the president’s press secretary, tests positive for Covid-19 after a presidential trip to Florida. Over 20 people in the president’s entourage were infected shortly after — many of the cases were traced back to that trip.
  • April 16. Health Minister Luiz Henrique Mandetta is fired by President Jair Bolsonaro after disagreements over the use of antimalarial drug hydroxychloroquine against Covid-19. The president supports the unproven treatment, against all scientific evidence. Oncologist Nelson Teich is named as his replacement.
  • May 15. Mr. Teich resigns, for the same reasons as his predecessor: disagreements over social isolation guidelines and the recommendation of chloroquine as a “possible cure” for the coronavirus. Since then, the Health Ministry has been run on an interim basis by Army General Eduardo Pazuello.
  • June 19. Brazil surpasses 1 million cases.
  • July 7. Jair Bolsonaro tests positive for Covid-19
  • August 8. Brazil surpasses 100,000 deaths and 3 million cases 

Expected GDP growth in 2020: -9.1 percent (IMF)

Even before the coronavirus arrived in Brazil, the government showed signs that it would take the risks of a massive spread seriously, with the Health Ministry proposing a bill to give the government legal support to carry out emergency measures. After that, however, Brazil’s public response has been a disaster. The federal government collided with state administrations over quarantine measures and President Jair Bolsonaro has been a focal point of misinformation and denialism.

As in other countries, inequality plays a huge role in how the pandemic has progressed in Brazil. Poor housing conditions mean that millions of people live cramped in densely-populated areas, where social isolation is near-impossible. Many more have no access to clean water, making regular hand-washing — a key tool to prevent infections — more challenging.

An informal labor market and an already sluggish economy meant that millions of people preferred the risk of a Covid-19 infection to the certainty of not having any source of income whatsoever. The government created a coronavirus emergency salary program — and in 25 of 27 states, beneficiaries already outnumber people who are formally employed.

Argentina (359,625 cases, 7,563 deaths)

Key dates:

  • March 20. Government announces compulsory quarantine;
  • June 20. Protests against the expropriation of grain exporter Vicentín erupt in several cities;
  • July 9. Demonstrations in several cities demand President Fernández ease quarantine measures;
  • August 17. Protests against a judicial reform also mix with disgruntlement over quarantine measures. 

Expected GDP growth in 2020: -9.9 percent (IMF)

The health crisis began soon after President Alberto Fernández took office, but the country was already battling a deep economic crisis — reaching the point of default earlier in the year. 

Mr. Fernández, however, managed to strike a deal with Argentina’s private creditors to restructure a USD-65 billion-debt. The agreement was a relief to a government that was growing unpopular, as Argentinians began protesting quarantine measures, among other reasons for disgruntlement.

Bolivia (110,999 cases, 4,664 deaths)

Key dates:

  • July 9. Interim President Jeanine Áñez tests positive for the coronavirus;
  • July 21. The Bolivian press reports that, between July 15-20, over 420 bodies were removed from the streets across five regions;
  • August 16. Esther Morales, sister of deposed President Evo Morales, dies of Covid-19 in Oruro.

Expected GDP growth in 2020: -2.9 percent (IMF)

The pandemic postponed long-awaited elections in Bolivia. While Ms. Áñez argues that holding a national election while the pandemic rages on is a bad move, it also raises questions about her willingness to leave power. Especially since courts in Bolivia are cracking down on former President Evo Morales’ Movement to Socialism (MAS) party.

Chile (400,985 cases, 10,958 deaths)

Key dates:

  • March 16. Chile closes its borders;
  • March 24. The government enforces a curfew;
  • May 15. Capital Santiago goes under full lockdown, along with six other communes in the city’s metropolitan area.
  • June 16. Health Minister Jaime Mañalich resigns, accused of being slow to react to the spread of the virus and tampering with official data.

Expected GDP growth in 2020: -4.5 percent (IMF)

At first, Chile seemed to be managing the crisis well. However, a precocious reopening in May led to an uptick in infections and deaths, with a 60-percent bump in new cases. Things got worse when Health Minister Jaime Mañalich resigned due to a data tampering-scandal. An independent report accused the government of concealing more than 5,000 coronavirus-related deaths.

Moreover, Chile was already a society in turmoil — in 2019, President Sebastián Piñera faced a massive wave of street protests, in a crisis that threatened to bring down his administration. To ease popular discontent, Mr. Piñera promised a constitutional referendum for October.

Colombia (562,128 cases, 17,889 deaths)

Key dates:

  • March 25. President Iván Duque enacts a mandatory quarantine;
  • July 15. Human Rights Watch denounces abuses by armed groups against civilians between March and June, in an effort to enforce their own measures to prevent the spread of Covid-19.

Expected GDP growth in 2020: -2.4 percent (IMF)

Violence in Colombia increased during the pandemic, as many armed groups have been using their unofficial authority to impose isolation measures. A report by Human Rights Watch denounced massacres, especially in border regions. 

Almost 65 percent of Colombians approve of President Iván Duque’s coronavirus response, according to a recent survey. However, the country reported a new record for daily Covid-19 deaths on August 22, with 385 lethal cases. Fears of new peaks pushed the government to suspend tax-free days on retail stores to avoid big shopping crowds.

Ecuador (109,030 cases, 6,368 deaths)

Key dates:

  • March 17. The country begins enforcing restrictions on movement;
  • March 30. Local press organizations report that families in Guayaquil had burned the belongings of Covid-19 victims;
  • March 31. Newspaper El Universo says 450-plus dead bodies featured on a waiting list to be removed from homes. At this point, many families were simply abandoning corpses on the streets;
  • June 6. Capital Quito starts its reopening process.

Expected GDP growth in 2020: -2.4 percent (IMF)

In April, one month before the WHO declared South America the coronavirus epicenter, the city of Guayaquil went viral around the globe due to being the site of the first Covid-19 collapse in South America. The nightmare included more than 100 bodies being collected on the streets during the first chaotic days, according to Interior Minister Maria Paula Romo. Four months after the disaster, the province of Guayas (of which Guayaquil is the capital) now shows a downward trend in cases and deaths, already targeting the final phase of control. 

Mexico (568,621 cases, 61,450 deaths)

Key dates:

  • March 15. President Andrés Manuel López Obrador publishes a video on Twitter hugging and kissing supporters;
  • March 31. Mexico suspends all non-essential activities.

Expected GDP growth in 2020: -10.5 percent (IMF)

At the early stages of the pandemic, President Andrés Manuel “AMLO” López Obrador dismissed the severity of the virus — drawing comparisons to Brazil’s Jair Bolsonaro and U.S. President Donald Trump. The left-wing leader even showed a Jesus medallion as his “protection” against the virus and urged Mexicans to go on with their lives as usual. 

While AMLO has since changed his stance, Mexico quickly became the third country with most deaths and cases in the Americas — trailing only the U.S. and Brazil.

Peru (607,382 cases, 28,001 deaths)

Key dates:

  • March 15. President Martín Vizcarra passes a nationwide quarantine;
  • July 22. The government adds a total of 3,688 unreported deaths between March and June;
  • August 23. At least 13 people suffocate after police raid a party in Lima. The police were deployed to avoid public gatherings.

Expected GDP growth in 2020: 14 percent (IMF)

Peru is a textbook example of how social inequality may offset any government action against the coronavirus. The government imposed strict lockdowns before the United Kingdom and many other European countries. Still, it has become home to the world’s second-highest rate of Covid-19 deaths per 1 million people — behind only Belgium.

Experts say that a lack of information — coupled with limited access to healthcare and poor housing conditions — turned poorer regions in the Andes into breeding grounds for the virus.[/restricted]


Explaining Brazil #122: Six months of the coronavirus in Latin America

This week’s episode, Six months of the coronavirus in Latin America, was supported by AMEC, the Brazilian Association of Investors in Capital Markets. AMEC brings together around 60 institutional investors from Brazil and abroad — which have a combined portfolio of over USD 130 billion.

It was also supported by, a platform that offers a SEO Mastery course which will make your company’s website the top-ranked in your field, in no time at all. 

We don’t know exactly when the coronavirus began infecting people in Latin America. 

Some researchers say that Sars-CoV-2 might have been circulating in Brazil as early as January, while one preliminary study suggested the virus may even have been present in the country back in November 2019. But the first confirmed Covid-19 infection happened exactly six months ago, when a 61-year-old man tested positive in São Paulo.

Half a year later, Latin America is the global epicenter of the pandemic — with five of the region’s countries among the top 10 worst-hit nations in the world. So far, 6.7 million cases have been confirmed south of the Rio Grande, along with over 260,000 deaths.

How things have gotten so out of control? 

Listen and subscribe to our podcast from your mobile device:

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On this episode:

  • Lucas Berti covers international affairs — specialized in Latin American politics and markets.
  • Aline Gatto Boueri is a data journalist based in Buenos Aires, Argentina.

Background reading:

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Left wing has no response to Bolsonaro’s popularity surge in poor areas

Though his administration was plagued with multiple corruption scandals, former President Luiz Inácio Lula da Silva remains one of Brazil’s most popular politicians. His detractors claimed his support was a byproduct of wealth transfer policies, which they dismiss as ‘cash-for-votes’ schemes. Lula’s followers, on the other hand, claim this evaluation is classist and argue his popularity is down to an ensemble of progressive policies, particularly in Brazil’s poor Northeast — the only region of the country where Jair Bolsonaro lost in the 2018 election.

Now, however, Mr. Bolsonaro’s popularity is on the rise in the Northeast, according to several opinion polls, leaving Lula’s supporters dumbstruck. This rise in approval coincides with the creation of the coronavirus emergency salary in March, which paid a BRL 600 (USD 110) monthly stipend to unemployed and informal workers, preventing tens of millions from falling below the extreme poverty line.[restricted]

According to pollster Datafolha, opposition to Mr. Bolsonaro in the Northeast declined significantly, from 52 to 33 percent. Another poll, by DataPoder360, suggests that his supporters in the region now outnumber his detractors — something unthinkable just a few months ago.

On Twitter, supporters of the Workers’ Party appear flabbergasted that voters would rather back Mr. Bolsonaro’s government in exchange for monthly cash transfers, despite his open bigotry against vulnerable groups and the government’s attacks against public institutions.

In light of these polling numbers, the Workers’ Party central committee had to tell governors in the Northeast to “find a way to counter” Mr. Bolsonaro’s advances in the region.

“The first mistake on the left was believing that Lula’s popularity came from his charisma, popular roots, and progressive agenda. But voters in Brazil do not act based on ideology, but rather based on their most immediate needs. And in a country as unequal as Brazil, can you blame them?,” argues sociologist Carlos Melo, a professor at the São Paulo-based Insper Business School.

Interestingly, the government was initially against the coronavirus aid program — having proposed just one-third of what is being paid to informal and unemployed workers, single mothers, and vulnerable populations. But the administration has excelled in reaping the benefits of the initiative, even though Congress arguably had a bigger hand in ensuring it was approved.

Lula and the left still have no strategy to fight Bolsonaro

The Workers’ Party — which is still the largest political organization on Brazil’s left — lacks coordinated action to counter Mr. Bolsonaro’s government. The opposition has been toothless since he took office, and the Workers’ Party has so refused to join or create any effort into building a broader opposition front.

“Their calculation, according to a top adviser within the party, is that they retain at least 30 percent of the electorate. That would be enough to take the party to the runoff stage in 2022, and anti-Bolsonaro sentiment would take care of winning the race for them,” Mr. Melo tells The Brazilian Report. “It is the same mistake they made in 2018,” he adds.

But the effects of the emergency salary shows that money can, in fact, buy you love. Meanwhile, Workers’ Party supporters are left to place their hope in the perverse calculation that its prohibitive BRL 50-billion-a-month price tag will make the aid impossible to sustain, and that a whiplash effect to Mr. Bolsonaro’s popularity will occur when payments are cut or halted.

“This surge in popularity has a lot to do with the government’s intense propaganda to take ownership of a policy it didn’t create,” says Senator Humberto Costa, the opposition whip in the Senate. “The aid program will soon end. The economic crisis will worsen, unemployment rates will spike.”

Senator Rogério Carvalho, who, like Mr. Costa, belongs to the Workers’ Party, says the same. “That [rise] has a limit. This narrative will be deconstructed and he will face an even bigger crisis,” he told The Brazilian Report.

Curiously, that is the same strategy the center-right adopted 15 years ago, when the Lula administration was against the ropes, facing numerous corruption scandals and even talks of impeachment. The Brazilian Social Democracy Party (PSDB) — the main opposition group at the time — decided to “let Lula bleed” until the 2006 campaign, when the PSDB hoped to retake the presidency.

But cash-transfer policies had a huge effect on voters’ wellbeing and Lula managed a landslide runoff-stage win, cementing himself as the defining political force in Brazil. Of course, he was helped by an unprecedented commodities boom — which fueled economic growth and brought about historically low unemployment rates. Mr. Bolsonaro, on the other hand, will have to face the worst economic crisis since the Great Depression.

Since day one of the Bolsonaro government, his detractors have predicted its imminent downfall. His administration, however, has proven to be surprisingly resilient — considering the sheer amount of controversy it has generated.

Still, even if Mr. Bolsonaro limps to the 2022 election, alive but broken, the Workers’ Party might not find itself in the position to claim the mantle of his main rival. 

To the right, figures such as São Paulo Governor João Doria are so far winning the battle to become Mr. Bolsonaro’s official opposition. And to the left, former presidential candidate Ciro Gomes and Maranhão state governor Flávio Dino are seeking to win over the progressive camp.[/restricted]


The role of religion in Brazilian politics

In Brazilian electoral politics, there are rules to try and even the playing field, punishing candidates who win their races thanks to the unfair use of money — labeled an “abuse of economic power” — with impeachment. This week, the country’s Superior Electoral Court tried a case which would decide the level of scrutiny religious leaders would face when running for office. They would decide whether or not to create the crime of “abuse of religious power,” and if it should be an impeachable offense. The case was brought up by Supreme Court Justice Edson Fachin, who believes that religious leaders are overstepping their roles and using faith as a vote-whipping tool.

Justice Fachin, however, lost in a 6-1 vote. 

His peers say that the current rules, as they are, already regulate such transgressions. Moreover, Justice Alexandre de Moraes, who voted with the majority, said “one cannot transform religion in absolutely neutral movements without political participation and legitimate political interests.” His words echo those of South African Archbishop Desmond Tutu, who once said he was confused about which Bible people were reading when they said that religion and politics do not mix.[restricted]

But the discussion has become a hot-button issue in Brazil, especially since the rise of Evangelical churches as major power brokers in Congress and — with the ascension of Jair Bolsonaro to the presidency — in the federal government.

In fairness, religion has always been a part of politics in Brazil, from slave revolts led by Muslims in 19th-century Bahia, to the role of liberation theology in the resistance to the military dictatorship. According to a recent Pew Research Center survey, 84 percent of Brazilians believe that faith in God is necessary in order to have moral values, meaning that religion and religious values play a key role in how Brazilians make political decisions.

It is necessary to go beyond the surface level in analyzing the current role of religion in Brazilians politics. The Brazilian Report dug into the research and spoke to leading experts in the field to break down the role of religion in politics.

Religion in Congress: the “Bible caucus”

For decades, Brazil held the title of being the “world’s largest Catholic country.” Being Brazilian was almost synonymous with being Catholic, even for those who did not attend mass. There was even a name for these non-practicing not-so-devotees: Census-only Catholics.

Since the 1950s, however, Brazil has been experiencing a rapid demographic change. The country’s urbanization process was followed by another phenomenon: the surge of Evangelical Christianity. Brazil’s Evangelical population exploded from just four percent 40 years ago to nearly one-quarter of the population. It would not be surprising if next year’s census shows Evangelical Christians as comprising over 30 percent of Brazilians.

And while Mr. Bolsonaro is a Catholic, he often professes his faith in evangelical churches. In 2016, he was baptized into the Assembly of God Church by a preacher who is also the leader of the Social Christian Party. His electoral win placed religious activists in the cabinet in a way never seen before in Brazil. Damares Alves, a former secretary within the congressional evangelical caucus, is now Family, Women, and Human Rights Minister — the ‘Family’ element was shoehorned in as a concession to the evangelical community. But religious leaders were also placed in key positions related to policies targeting indigenous groups, populations which many churches seek to convert. 

Earlier this year, Ricardo Lopes Dias, another Evangelical Christian pastor, was appointed as head of Brazil’s indigenous affairs agency Funai — and missionaries were granted special permission to enter indigenous territories, despite there being a raging pandemic that is killing an average of over 1,000 Brazilians every day.

In Congress, Evangelical Christian candidates went from winning 12 of the House’s 513 seats in 1982 to snatching up 82 seats in 2018. Alongside the rural caucus and the so-called “bullet caucus” — made up of pro-gun and public security lawmakers — the Evangelical bench is one of the top three most powerful interest groups represented in Congress. 

And while that growing influence is linked to the growth of their religion, it is also true that Evangelicals were also empowered by the dictatorship — which saw them as a useful buffer against communists and left-wing elements within the Catholic Church.

The Evangelical caucus not only has its own distinct social agenda — anti-abortion, anti-LGBTQ rights, anti-secular education — but is also a well-organized group with a strong political strategy. And they know how to pick a winner. 

As sociologist Liz McKenna told The Brazilian Report, “the majoritarian evangelical bloc has never been on the losing side of a presidential campaign in Brazil since the end of the dictatorship. From Fernando Collor, in 1989, to Jair Bolsonaro, they always chose the candidate who ended up winning.” In 2018, big-name televangelists began endorsing Mr. Bolsonaro late in September, helping push his poll numbers from 33 to 48 percent.

It is wrong, however, to assume Evangelicals are a homogeneous group, either in terms of demographics or politics. 

While it might seem like Evangelicals would be natural allies of Brazil’s right-wing political parties, they served for over a decade as some of the left-wing Workers’ Party’s most reliable allies. In 2002, Evangelical leaders held a campaign barbecue in Rio de Janeiro to show support for Luiz Inácio Lula da Silva, who heads a party associated with more progressive politics, such as LGBTQ- and abortion rights.

There is no such thing as a free barbecue, however, and the support of the Evangelical caucus came at a price. The Workers’ Party gave their churches freedom to expand without having to worry about the taxman. As The Brazilian Report showed last week, the Workers’ Party government also promoted the expansion of Brazilian churches in Africa.

More importantly, churches were granted the opportunity to take responsibility for distributing welfare on behalf of the government in poor communities. “At least in the city of São Paulo, public health and social assistance policies created during the Lula administration were being managed by social organizations controlled by Evangelical churches,” Ruy Braga, a sociologist at the University of São Paulo, tells The Brazilian Report. “For the recipients of these public policies, Evangelical churches were more often associated with the Bolsa Família program or even with the role of community health agents than with the distant federal government.”

That arrangement was more of a benefit to Evangelical churches than the state vis-à-vis public opinion. Religious groups became seen as their benefactors, rather than the federal government. 

Now, the Evangelical caucus is trying to leverage its political power into taking over institutions such as public education and welfare distribution, along with getting tax breaks and support for their media ventures. 

The politics of the base

Low-income areas were once seen as the domain of groups belonging to Catholic Liberation Theology. Radical priests would deliver the social gospel to the poor and build a base for social change. This strategy operated in conjunction with trade unions and other civic organizations. Social gospel and the organizing work of Liberation Theology were key to the formation of the Workers’ Party. 

Now, however, Evangelical churches in these same communities push forward their own version of the prosperity gospel — according to which wealth is a sign of God’s favor. Moreover, preachers say donations to the church and the community result in wealth coming back to people.

One of the ways to understand the rise of the Evangelical churches, particularly on the periphery of Brazil’s major cities, is to see them as rising in response to declines in other forms of civic association and organizations — in particular trade unions.

Brazil’s trade unions are a pale shadow of their former selves, they no longer strike fear into the hearts of governments and big business. Though the union-founded Workers’ Party won four successive elections, Brazil’s trade unions were already in a state of demobilization and steady decline. And, after the 2017 labor reform, compulsory union dues were done away with, robbing these groups from their main revenue source.

The country’s largest trade union federation — the Central Union of Workers (CUT) — went from collecting BRL 60 million per year from its members to just BRL 3 million. 

Meanwhile, Brazil’s Evangelical churches rake in an estimated BRL 88 million per day. Moreover, the congregants are loyal and dedicated to their beliefs. As Liz McKenna points out, 89 percent of Evangelical Christians contribute regularly to their church through tithes.

Part of this shift can be explained by the social trends during the boom years of the 2000s while Lula was in office. The millions that gained access to higher education for the first time or could finally afford a television or fridge saw this as a result of their own individual success and godliness, rather than government policy. The Workers’ Party increasingly promoted the idea of a rising middle class rather than building workers’ power. Prosperity gospel, which preaches that material success is connected to spiritual virtue, found appeal among many of those who believed they had finally moved into the middle class.

Formerly with Lula, now with Bolsonaro

Once organized communities loyal to the Workers’ Party with an active trade union presence, were no longer the focus of base building or political organization. That left a civic vacuum that evangelical churches increasingly filled. The labor market in Brazil has increasingly shifted to forms of informal employment: the typical worker in 2020 risks their lives riding their motorbike for a delivery app or works in a call center, and they are not unionized. 

As Ruy Braga tells The Brazilian Report, “Evangelical churches are social hubs, where people make friends and take part in cultural activities, at least as much as they are places of worship. This is especially the case for poor black and multiracial women who are generally deprived of such spaces, many of whom are the mothers of young men victimized by gang and police violence.”

Religious spaces in Brazil are syncretic, members are not particularly loyal to the social agenda of the Bible bloc and move between different denominations and spiritual beliefs. They are also the sites of welfare distribution and social services. As a result, these social spaces and those that occupy them often join radical leftist social movements rather than right-wing middle-class social movements. Evangelicals, for instance, form a key part of the base of the two largest movements in Brazil: the Homeless Workers Movement (MTST) and the Landless Workers Movement (MST). 

Guilherme Boulos, the MTST leader and the radical leftist candidate in the 2018 elections, points out that ‘the largest part of our base, of the MTST, is by far, [made up of] Pentecostal Evangelicals. It’s wrong to think that all Pentecostals are conservative. (…) The phenomenon underneath is much more complex.” The average member of this radical social movement is a black woman in her 70s who regularly attends a Pentecostal church.

Religion in Brazil is a complex phenomenon. It is a mistake to generalize or reduce it either to its most radical or venal exponents. Religion can never be divorced from politics, in the sense that its idioms and expression are key not only to how people view and interact with the world, but how people organize to change it both for the better and the worse.

While the Electoral Court may have struck down the move to render the abuse of religious power during elections a crime, Brazilians and Brazil-watchers should pay close attention to the political maneuvering of Evangelicals. Mr. Bolsonaro is currently enjoying his best polling yet since he took office and Evangelicals form perhaps the strongest and most organized section of his base. 

People turn to religion during times of uncertainty, suffering, and crisis, like the terrible pandemic we are living through currently. As The Brazilian Report has shown, the state has abandoned poor Brazilians who are both those most likely to die from Covid-19 and are bearing the worst of its economic consequences. As a result, these people are turning to religion for solace. 

It seems highly likely given that churches provide not only community and social services, and that the Evangelical churches are the ones that predominate in much of the periphery, that their reach and power will almost certainly increase as a result.[/restricted]


Bannon arrest doesn’t change a thing for Brazil’s far-right

Steve Bannon, the former top adviser to U.S. President Donald Trump, was arrested on fraud charges this week. Strangely, that piece of news appears to have generated more buzz in Brazil than in the U.S., where Mr. Bannon is no longer seen as a major political player. But in Brazil, his connections to the Bolsonaro clan have turned him into a bogeyman for the Brazilian left — which lost no time in foretelling the backslide of the far-right in the country.

Many in Brazil sincerely believe that Jair Bolsonaro’s rise to power was orchestrated by Mr. Bannon, after they were pictured alongside one another on multiple social media posts. [restricted]That is why, from former President Luiz Inácio Lula da Silva to former presidential candidate Ciro Gomes, everyone on the left seemed to celebrate Mr. Bannon’s disgrace as a blow against the Bolsonaro administration. Political columnist Matheus Leitão, of weekly magazine Veja, went as far as saying that “[Mr.] Bannon’s arrest is worse for Bolsonarism than it is for Trumpism.” 

For Lula, the arrest was “an important victory for democracy” because Mr. Bannon “represents evil” and wished the same for [Mr.] Bolsonaro’s Virginia-based far-right guru Olavo de Carvalho, who The Brazilian Report profiled in 2018. Indeed, many Brazilian commentators have referred to Mr. Bannon as Donald Trump’s answer to Olavo de Carvalho.

What is the real connection between Bannon and the Bolsonaros, if any?

Mr. Bannon supposedly served as an “informal advisor” to the Bolsonaro campaign in 2018. And the president’s son Eduardo, a congressman, was once named the Latin American representative for Mr. Bannon’s botched attempt to construct a reactionary international simply known as “The Movement.” The entire Bolsonaro clan has used every chance it gets to grab a photo op with Mr. Bannon on their infrequent trips to the U.S., despite the fact that he is more or less a political non-entity after being evicted from the Trump White House. 

Eduardo allegedly even offered Mr. Bannon a say in Brazilian policymaking during a dinner in the U.S., The Guardian reported.

Mr. Bannon has infrequently commented on Brazilian affairs before — labeling Vice President Hamilton Mourão as “useless and unpleasant,” and claiming that the investigation into Mr. Bolsonaro’s oldest son, Senator Flávio Bolsonaro, is part of “the cultural Marxism movement’s war against the family.”

But the truth is much less juicy. Mr. Bannon’s influence anywhere has been greatly overstated. While he might have strategically been important during the final three months of the 2016 U.S. presidential election, he’s hardly the visionary who single-handedly revived the far-right, pulling the strings that made things such as Brexit or Mr. Bolsonaro’s victory possible.

A lot of ink has been spilled on Mr. Bannon’s influence, but short of actual details of what he supposedly has done.

There is an element of simplistic conspiratorialist thinking that negates the actual reasons for the rise of these extremist forces — reducing it all to the Machiavellian genius of Mr. Bannon, who is more of a grifter than a visionary. Mr. Bannon, if anything, is closer to Jair Bolsonaro in that he has spent much of his career operating small- to medium-sized scams, and has a gift for capturing the popular mood. 

However, he lacks any real sort of political or strategic coherence. 

Mr. Bannon hardly knows anything about Brazil and doesn’t speak Portuguese. Quite frankly, too many people who should know better have mistaken Eduardo Bolsonaro’s fanboy love for Mr. Bannon for actual political influence. The scam that Mr. Bannon went down for involved defrauding a fundraising campaign to build a wall along the U.S.-Mexico border. 

If anything, this represents the reality of Mr. Bannon as a petty grifter who enriched himself off bigotry at the expense of democracy.

The (real) significance of Bannon’s fall

Mr. Bannon’s tenure as a White House strategist combined gross bigotry and incompetence as part of a populist crusade against “globalism” and “the party of Davos.” But this was short-lived because in the end, Mr. Trump didn’t need Steve Bannon — nor did he genuinely trust his judgment. The forces propping up Mr. Trump’s administration are in the Republican establishment — which proved far more influential than the rogue populists that supposedly brought him to power.

While not all the dark and mysterious forces behind Mr. Bolsonaro’s victory and the sophisticated disinformation campaign behind it were Brazilian, the real evil genius was not some washed-up red-faced bloated huckster, but cynical tech companies looking for a quick buck from far-right forces who sold them the technology used for disinformation campaigns

Mr. Bolsonaro’s “office of hate” disinformation network is funded by Brazilian businessmen. The messaging was designed by Brazilians. But the microtargeting tech was foreign made. 

The Supreme Court’s inquiry into their underground fake news operation has revealed as much, raising no reason to believe that Mr. Bannon and his “Movement” actually accomplished anything in Brazil.

To watch the downfall of a character such as Steve Bannon might be cathartic to many, but believing the bogeyman hype can distract attention away from the dangerous forces effectively undermining Brazilian democracy — such as members of Congress, big business, and the military who enabled a leader that has, in less than two years in office, mulled over sending troops to shut down Congress several times, as Débora Álvares reported earlier this week.

The sad reality facing Brazil is that the political opposition to Mr. Bolsonaro remains weak and the president is enjoying record polling numbers despite his mismanagement of the pandemic, thanks to the biggest cash-transfer program in Brazilian history — which prevented tens of millions from falling below the extreme poverty line.

Mr. Bannon’s fall won’t change this political reality in the slightest.[/restricted]

Brazil Daily

China turns to Brazilian states for diplomatic ties

We’re covering efforts between governors to establish healthy relations with China. The new (old) controversy involving the Economy Minister. And the blazes devastating Brazil’s wetlands.

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China extends an olive branch … to Brazilian governors

During an online event with governors from the Northeast region of Brazil,[restricted] Chinese Ambassador Yang Wanming praised “friendship” as the “main asset” of Brazil-China relations, adding that “mutual political confidence” has allowed for a fruitful relationship and increasing exchange between the two nations over the years.

Investments. “The Chinese part is on hand for all sectors in the Northeast to plan regional exchange and diplomatic cooperation after the sanitary crisis, in order to recover the economy and improve people’s quality of life,” said Mr. Yang.

  • The acquiescence between China and Brazilian states is a counterpoint to the tepid relations the Asian giant has with the federal government. Back in March, tensions peaked after Congressman Eduardo Bolsonaro said the Chinese Communist Party is fully to blame for the Covid-19 pandemic. At the time, the ambassador demanded a formal apology for what he called “flagrant provocation.”

Why it matters. China has many interests in Brazil — while states, with depleted finances, desperately need foreign investment. Without the federal government coordinating diplomatic and trading efforts, states are negotiating directly with China. 

  • Political scientist Mauricio Santoro, an international relations professor at the State University of Rio de Janeiro, said that dynamic could be catastrophic, as “states have little to no structure to stand tall at the negotiation table, creating an immense risk of draconian deals.”

Relations. There is no evidence that the Bolsonaro government’s verbal attacks on China have resulted in any significant retaliation as of yet. However, observers point out that some donations from Chinese companies have never made it to Brazil. 

  • The Amazon Consortium — a body representing Brazil’s nine Amazonian states — requested support from potential Chinese partners to receive medical supplies to combat the Covid-19 spread. Eduardo Tavares, Planning Secretary of the state of Amapá, said “nothing concrete” has come from the request.

Trade. According to the latest data available, China gobbled up 34 percent of Brazil’s exports (in USD) and was responsible for 22 percent of imports.

Will Guedes stay or will he go?

Markets were in for a bumpy day on Monday, after rumors that Economy Minister Paulo Guedes was “no longer seen as indispensable” by President Jair Bolsonaro. Brazil’s benchmark stock exchange index Ibovespa fell below the 100,000-point mark, while the Brazilian Real lost ground to the U.S. Dollar, which topped the BRL 5.50 threshold for the first time since late in May. 

What to make of it. Mr. Guedes supports austerity measures as being the only way out of the crisis, opposing himself to the government’s military wing — which wants the president to ramp up public spending on infrastructure projects to recover economic activity. Analysts fear that his recent surge in approval rates might push the president into listening to the latter group.

  • Fears of Mr. Guedes jumping ship are nothing new, and arise every few months. This is because markets know that President Bolsonaro has never championed austerity throughout his time in politics, and see the Economy Minister as the sole guarantor of a pro-market agenda.
  • Mr. Bolsonaro has given mixed signals — publicly backing Mr. Guedes, but also floating the idea of a BRL 5-billion infrastructure project for 2021.
  • Per newspaper Folha de S.Paulo, markets fear Mr. Bolsonaro will turn into a right-wing version of ex-President Dilma Rousseff, “spending a lot and spending poorly.” The newspaper talked to three bankers, two economists from top investment banks, and managers of two major private equity firms — all of whom remained anonymous. 

Rocky relationship. Jair Bolsonaro and Paulo Guedes have always been odd bedfellows. But the truth is that the Economy Minister doesn’t seem to be planning to leave his position as Brazil’s economic tsar — even if only in name.

Pantanal: Brazil’s burning wetlands

Since late in July, Brazil’s Pantanal — the world’s largest floodplain and a Unesco World Heritage site — has lost over 200,000 hectares of vegetation to massive wildfires. This is Pantanal’s worst fire outbreak since 2006, but its origins remain unknown and there is no sign that the blazes can be tamed in the short term.

Why it matters. The fires are ravaging the São Francisco do Perigara farm — a sanctuary that is home to 15 percent of the world’s population of blue macaws, an endangered bird species. Over 70 percent of the reserve has been destroyed, which could erase decades of environmental efforts.

Why the fire has been so potent. Pantanal is suffering after months of severe droughts. The dry season arrived in May after a rainy season that saw 50 percent less precipitation than expected. To make matters worse, the region has seen strong winds — which help to spread flames.

  • The Environment Secretary of Mato Grosso do Sul state, Jaime Verruck, told Brasília correspondent Renato Alves that the majority of these fires were caused by humans. “We are in the middle of the worst situation in terms of drought, so the fires are likely to continue and the big problem we have is that most of the fires are caused by human action,” said Mr. Verruck.

What else you need to know today

  • Coronavirus. According to pollster Datafolha, 79 percent of Brazilians believe that school reopenings will aggravate the coronavirus crisis. The same percentage believe schools should remain closed until the pandemic is tamed. To help low-income students with limited access to the internet during this period, the government launched a procurement process worth BRL 24 million (USD 4.3 billion) to bring internet cell-phone SIM cards to 400,000 students in public universities and professional certificate courses. 
  • Strike. Employees of Correios, Brazil’s federally-owned postal service company, went on strike Monday night. They are protesting the government’s plan to privatize the company — which has posted losses in the billions over recent years — and accuse management of “neglecting workers’ health” during the pandemic. According to union leaders, servants lost several benefits, such as premiums for risky activities or extra hours, and aid for those with children with disabilities.
  • Politics. Antonio Rueda, deputy chairman of the Social Liberal Party, met with leaders of the so-called “Big Center,” a group of traditional conservative forces in Congress — and Jair Bolsonaro’s new allies. Mr. Rueda is heading negotiations for the president’s return to the party, after a bitter break up last year. 
  • Cybersecurity. Insurance premiums against cyberattacks have more than doubled since last year. In H1 2019, direct premiums amounted to BRL 8.3 million — figures have jumped to BRL 17.8 million in the first half of 2020. Insurance claims, which cover damages to third parties caused by leaks, were also up from BRL 145,000 between January and June 2019 to BRL 12.9 million in the same period this year. Per cybersecurity company Fortinet, Brazil registered over 1.6 billion cyberattacks over Q1 2020 alone. That number is directly related to remote work — as home networks are much less secure than corporate ones.[/restricted]

After acrimonious split, Bolsonaro could get back in bed with old political party

When no major parties agreed to take him on as a presidential candidate in 2018, Jair Bolsonaro found a home in the tiny Social Liberal Party (PSL). To the disbelief of the political establishment, Mr. Bolsonaro won the presidency by a wide margin — and became 2018’s biggest kingmaker, paving the way for several of his little-known party colleagues to win their races for governor and Congress. The PSL went from being a small group with eight seats to the second-largest bench in the lower house.

His stellar electoral performance gave Mr. Bolsonaro the impression that the PSL needed him much more than the other way around. After unsuccessfully trying to sequester control over the party, the president unceremoniously abandoned the group, in a bitter separation that included mutual accusations of malfeasance between him and party founder and chairman Luciano Bivar. 

Upon leaving, Mr. Bolsonaro announced that he would found his own political family, the Alliance for Brazil party. Despite the bold plan of being “not just a new party, but the greatest party in Brazilian history,” the Alliance was an utter flop.

And in a bizarre twist, a reconciliation between Mr. Bolsonaro and the PSL might now be on the table. He admitted the possibility during a live broadcast on social media, and PSL lawmakers confirmed the idea to The Brazilian Report as something that could be confirmed as early as next week. “It is hard to form a [new] party, but not impossible. The pandemic delayed it […] I can’t be 100-percent invested in the Alliance [for Brazil], I’ve got to look at other parties,” Mr. Bolsonaro told his followers.

It has indeed been a Herculean task for the president’s entourage. The arduous bureaucratic process of finalizing a party’s creation includes gathering the physical signatures of 500,000 voters from at least nine different states. The Alliance for Brazil has only managed to rustle up around 3 percent of the required total. 

Conditions for reconciliation

Brazilian electoral law forbids independent candidates from running, but it’s not as if Mr. Bolsonaro has no options. He mentioned proposals from three parties — naming one of them, the right-wing Brazilian Labor Party (PTB), which is led by the notoriously corrupt former Congressman Roberto Jefferson.

That gives the president some leverage to negotiate the conditions for his return. The Brazilian Report confirmed that the list includes revoking the suspension of 12 lawmakers who sided with the Bolsonaro family during the acrimonious split last year, ending litigation within the party, and sharing power of executive positions among the PSL’s branches around the country. In return, the president would give up on creating its own party.

PSL founder Luciano Bivar told The Brazilian Report that he only agrees with one condition: pardoning the pro-Bolsonaro lawmakers. “We’re in talks,” he said, citing a return of the head of state to the PSL ranks only as a “possibility.” Mr. Bivar is set to meet with Mr. Bolsonaro next week.

The PSL is split between two fringes of the far-right — one more aligned with the Bolsonaros and another closer to São Paulo Governor João Doria, who belongs to the Brazilian Social Democracy Party (PSDB). “Mr. Bolsonaro once told a supporter to ‘forget the PSL.’ Now he comes back begging for forgiveness. Do you realize who is the repentant traitor?” said Júnior Bozzella, head of the PSL in São Paulo.

Another major figure within the PSL who is looking to keep a safe distance from Mr. Bolsonaro is Senator Major Olímpio — a friend-turned-foe of the presidential clan. “I said it once and I’ll say it again: anyone with a shred of self-respect won’t take this guy back!” he told The Brazilian Report.

As we know, however, politicians easily leave self-respect aside under the right circumstances. With Mr. Bolsonaro posting the highest approval ratings he has ever had, it is difficult to imagine many political parties turning him down.[/restricted]