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Government launches new mobile loan scheme for low-income citizens

Janaína Camelo
Sep 27, 2021 15:14

Brazilian public bank Caixa announced the creation of a new credit facility for low-income workers, offering small loans which can be applied for via smartphone and repaid in up to 24 installments.

With the flexible nature of these loans, with interest rates of 3.99 percent a month, the government is hoping to reach approximately 100 million clients, a part of which had previously received the administration’s coronavirus emergency aid during the height of the pandemic.

To apply for said loans, workers must go through the same smartphone app used to receive emergency aid payments and update their registration data. According to Caixa, requests will be subject to approval and made available first to those clients who already have digital bank accounts.

“We can increase this credit and reduce interest as soon as we have an idea of these people’s ability to take out loans,” said Caixa chairman Pedro Guimarães, during an event to launch the new credit facility on Monday morning. 

Mr. Guimarães added that the information submitted by low-income workers may be used by other financial institutions to offer similar credit services.

Supreme Court unlikely to intervene in justice confirmation process in the Senate

André Spigariol
Sep 27, 2021 11:38

Supreme Court Justice Ricardo Lewandowski summoned Senator Davi Alcolumbre — head of the Constitution and Justice Committee — to explain the delay in confirming the Supreme Court appointment of André Mendonça, nominated by President Jair Bolsonaro months ago. Regardless, the court is unlikely to directly intervene in the process. 

Senators Alessandro Vieira and Jorge Kajuru requested a Supreme Court injunction to force Mr. Alcolumbre to schedule the confirmation hearing. He was officially notified on Thursday, given 10 days to respond to allegations he is purposely delaying the process. Messrs. Vieira and Kajuru claim the hearing has been postponed for “non-republican reasons.”

Behind the scenes, Mr. Alcolumbre is canvassing support to “defeat André Mendonça,” preferring that Prosecutor General Augusto Aras be given the nomination instead. 

Meanwhile, Mr. Mendonça has met with the broad majority of senators during his 70-day-plus waiting period before his hearing. A former Justice Minister and Presbyterian pastor, he believes he has enough votes to secure his appointment to the country’s top court. Senators in his favor say he has between 55 to 60 votes in the 81-member chamber.

Supreme Court sources tell The Brazilian Report that most justices are not in favor of directly intervening in Mr. Alcolumbre’s decision. However, some justices have spoken with Senate President Rodrigo Pacheco, who is putting public pressure on Mr. Alcolumbre to schedule Mr. Mendonça’s hearing.

What Boris really asked of Bolsonaro in New York

André Spigariol
Sep 24, 2021 17:14

During his weekly Facebook Live broadcast on Thursday, President Jair Bolsonaro claimed that British Prime Minister Boris Johnson asked him for an emergency food agreement with Brazil during a bilateral meeting held Monday in New York City, during his trip to the UN General Assembly.

Downing Street disputes Mr. Bolsonaro’s words, with one spokesperson telling the BBC that the Brazilian president’s account doesn’t correspond to the United Kingdom’s “recollection of the conversation.” The British government offered no further explanation. 

“He wants an emergency agreement with us to import some kind of food that is lacking in England,” said Mr. Bolsonaro. Indeed, the British government is scrambling to avoid meat and poultry shortages for the end-of-year holiday period, raising suspicion that the proposed “deal” could have been in relation to Christmas turkeys. The UK also faces cuts in carbon dioxide supply used in cattle slaughter and dry ice production.

While the details of the alleged “emergency food agreement” remain unclear, it is on record that the British Prime Minister did make demands to his Brazilian counterpart. As we revealed in the September 21 edition of our Brazil Daily newsletter, Mr. Johnson “encouraged President Bolsonaro to increase his 2030 Nationally Determined Contribution” as part of the Paris Agreement. He emphasized that Brazil should play a significant role in climate policy as it is “a major South American economy and home to the Amazon rainforest.”

Feds arrest Bolivian flight safety expert involved in Chapecoense air disaster

Euan Marshall
Sep 24, 2021 15:28

Brazil’s Federal Police arrested Celia Castedo Monasterio on Thursday, who was wanted in connection with the Chapecoense air disaster of 2016, which resulted in the deaths of 71 people including the vast majority of the Chapecoense football team.

Ms. Monasterio signed off on the flight plan of LaMia flight 2933, which crashed near the Colombian city of Medellin while transporting Chapecoense to the final of the Copa Sudamericana tournament. 

The charter flight only had enough fuel to make its proposed trip from Santa Cruz de la Sierra, in Bolivia, to Medellin. Aircraft are required to carry a sufficient amount of fuel to withstand holding patterns, diversions, or emergencies, but the flight plan was approved without these contingencies. Official reports from Colombian civil aviation authorities concluded that the crash was indeed caused by fuel exhaustion.

Ms. Monasterio had been a fugitive from justice before being encountered in the Brazilian city of Corumbá, on the border with Bolivia. The Federal Police announced that she will be held in the city before being handed over to Bolivian authorities.

Brazilian diplomacy keeps mum on Chile’s “virus of populism” remarks

André Spigariol
Sep 24, 2021 14:49

Earlier this week, Chilean President Sebastian Piñera delivered strong remarks at the UN General Assembly to condemn what he called the “virus of populism” and “a new form of threat to democracy” spreading across Latin America. 

“In our region, a new form of threat to democracy has emerged, which is no longer external as before, but comes from within,” said the Chilean president, addressing the assembly. “The main threat comes from democratically elected governments, that is, with original legitimacy, that maneuver to remain in power, overwhelm the independence of the other powers of the state, co-opt the agencies in charge of supervising electoral processes, and, often crush their opponents, incurring in open illegitimacy of their exercise of power.”

Sources told The Brazilian Report that Mr. Piñera’s message was aimed at Nicaragua (where President Daniel Ortega has ordered the arrest of multiple opposition members) and Venezuela (where President Nicolás Maduro clings on to power despite a flat-out socioeconomic collapse, thanks to support from the military). 

Brazilian officials were left reeling, believing Mr. Piñera’s words could have been directed at President Jair Bolsonaro — whose conflicts with the Judiciary and electoral authorities raised fears about the health of Brazil’s democracy.

We asked the Brazilian Foreign Affairs Ministry to comment on Mr. Piñera’s remarks.

“[We] do not comment on speeches made by heads of state of foreign governments, but we are satisfied with the coordination we maintain with the Chilean government and other countries in the region in international and regional multilateral bodies, to defend principles and values such as democracy, the rule of law, political freedoms and human rights,” said the ministry, in a statement.

Seasoned Brazilian diplomats point out that, since former Foreign Minister Ernesto Araújo left office, Brazil has become much more even-handed with regard to Venezuela and other authoritarian regimes in Latin America, such as Cuba and Nicaragua.

Brazil’s real interest rate world’s second-highest after Selic bump

Natália Scalzaretto
Sep 24, 2021 11:37

A survey by Infinity Asset Management shows that Brazil now has the world’s second-highest real interest rate, after the Brazilian Central Bank jacked up benchmark interests by 1 percentage point this week. Since the beginning of the year, the Selic rate has risen from 2 to 6.25 percent.

Discounting inflation, interests reach 3.34 percent, only behind Turkey’s 4.96 percent. The Central Bank’s decision to conduct steep interest hikes is part of a strategy to curb inflation, which has inched closer to the 10-percent mark over the 12-month period. The upper limit of the government’s target band sits at 5.25 percent.

Inflation predictor for September at highest point in 27 years

Ana Ferraz
Sep 24, 2021 9:36 ( Updated: Sep 24, 2021 9:59 )

Pushed up by higher transportation costs, the IPCA-15 consumer price index — a sort of mid-month predictor of the official inflation rate — has risen 1.14 percent this month. It was the highest for a month of September since 1994, when the country had just launched a new currency, the Brazilian Real, to tame hyperinflation.

The IPCA-15 came higher than expected, as markets foresaw a 1.03-percent rise. Since the beginning of the year, the index is up 7.02 percent — and has topped the 10-percent mark over the 12-month period.

One sliver of good news is that many respected analysts expect September to represent a turning point for Brazil’s raging inflation. That is the case of Luciano Sobral, chief economist of investment management firm Neo Investimentos and a columnist for The Brazilian Report. He writes:

“We estimate that more than half of cumulative 2020-2021 inflation will be concentrated in just three groups of items: foodstuffs, electricity tariffs, and vehicular fuel, affected by climate, exchange rate pass-through, and global price. 

In two other strong inflation decelerations of the past 20 years (between 2002 and 2003, and between 2015 and 2016), the “normalization” of those three groups clipped at least 3 percentage points from yearly inflation. This should be the case again in 2022, unless the disastrous combination of extremely dry weather and currency depreciation is repeated.”

Shady businessman tells Covid inquiry he met with Bolsonaro’s son

Janaína Camelo
Sep 23, 2021 15:35

The Senate’s Covid inquiry is currently questioning Danilo Trento, an executive at Precisa Medicamentos. The company is at the center of the Covaxin scandal, having brokered a USD 300 million vaccine deal with the Health Ministry that was laden with illegalities and has since been canceled by the government). Answering senators’ questions, he admitted to having met Senator Flávio Bolsonaro, the president’s eldest son, in public events.

The committee’s deputy chairman, Senator Randolfe Rodrigues, also produced text messages sent by Mr. Trento to his acquaintances in which he claims to know Congressman Eduardo Bolsonaro — the president’s third-eldest son.

Mr. Trento is not Flávio Bolsonaro’s only circumstantial link to Precisa Medicamentos. In October 2020, he introduced the company’s owner to the president of Brazil’s National Development Bank (BDNES). The meeting appears on the public schedule of BDNES head Gustavo Montezano.

Members of the committee believe the Bolsonaro family is involved in the Covaxin scandal by way of the president’s firstborn. Back in July, they began looking into shady activities by two lawyers linked to the senator — but the lead has not paid off as intended.