After France, Bolsonaro targets Chile

. Sep 05, 2019
Jair Bolsonaro (L) and Chile President Sebastián Piñera Jair Bolsonaro (R) and Chilean President Sebastián Piñera

This newsletter is for PREMIUM subscribers only. Become one now!

Jair Bolsonaro picks a fight with Chile, after defending the gruesome Pinochet regime. Internally, he is also set to fight with Congress, after deciding to veto several parts of a law to curb ‘excesses’ by investigators. The pension reform advances. Today is Amazon Day, but there is little to celebrate. (This newsletter is for platinum subscribers only. Become one now!)

After France, Bolsonaro targets Chile

Less than two weeks removed from his exchange of blows with French President Emmanuel Macron, Jair Bolsonaro created a new controversy

—this time, causing problems with Chile. It started when former Chilean President Michelle Bachelet (the current UN High Commissioner for Human Rights) criticized rising police violence in Brazil. That led Mr. Bolsonaro to praise Augusto Pinochet&#8217;s dictatorship, which killed and/or tortured <a href="">over 40,000 people in 16 years</a>—among which was Ms. Bachelet&#8217;s own father.</p> <p><strong>Why it matters.</strong> Mr. Bolsonaro&#8217;s words continue to cast a negative light on Brazil on the international stage, which could have repercussions come the next UN General Assembly, which will take place later this month. The president managed to unite both Chile&#8217;s left- and right-wing against him—just before a bilateral meeting between foreign ministers around trade and cooperation.</p> <p><strong>Brazil-Chile.</strong> Chile is Brazil&#8217;s second-largest trading partner in South America, only behind Argentina. The country is among the top 10 destinations of Brazilian investments abroad, while Brazil is the top destination for Chilean international investments. The two countries recently signed a trade deal to deepen economic relations. These efforts could be jeopardized by Mr. Bolsonaro&#8217;s explosive rhetoric.</p> <ul><li><strong><em>Go deeper: </em></strong><a href=""><em>Brazil-Chile trade deal, explained</em></a></li></ul> <hr class="wp-block-separator"/> <h2>Bolsonaro wants to expand public expenses—against the advice of his Economy minister&nbsp;</h2> <p>President Jair Bolsonaro said he wants to change the federal spending cap approved in 2016. The measure froze the growth of the federal budget for 10 years (and can be renewed for a further 10 years), meaning spending cannot surpass the previous year&#8217;s inflation. But Mr. Bolsonaro&#8217;s economic team doesn&#8217;t agree with changing the cap—arguing, instead, that Congress should change the rules establishing &#8216;mandatory expenses,&#8217; giving more room for the sitting administration to manage public resources.</p> <p><strong>Why it matters.</strong> After years of economic mismanagement by the Dilma Rousseff administration, the cap was sold as a way to tame Brazil&#8217;s ballooning spending. While most economists believe that the rule should be revised before 2026, they say now is not the time. It would increase mistrust in the Brazilian economy, and could do much more harm than good.</p> <p><strong>How the budget works.</strong> The government’s basic expenses ate up roughly 80 percent of total public spending in 2018. Investments, on the other hand, fell to the bare minimum. Without reform, Brazil&#8217;s expenditure on pensions and benefits will continue to consume a bigger share of the budget. According to the current structuring of public spending, the country would need a 5% annual GDP growth rate in order to return to the black—and that’s not happening any time soon.</p> <hr class="wp-block-separator"/> <h2>Amazon Day: nothing to celebrate</h2> <figure class="wp-block-image"><img src="" alt="amazon day" class="wp-image-23421" srcset=" 1024w, 300w, 768w, 610w, 1086w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Deforestation in Altamira</figcaption></figure> <p>September 5 marks the celebration of &#8220;Amazon Day&#8221; in Brazil. The date is a reference to a decree of September 5, 1850—when then Prince Pedro II issued a decree creating the Province of Amazonas (currently the state of Amazonas).&nbsp;</p> <p><strong>Why it matters.</strong> The Amazon is the heart of a complex system that pumps moisture into the air and transforms carbon into life. It is the largest freshwater basin on the planet, with 12% of all water found on Earth coming from there. But the biome is under threat from increasing deforestation—a trend that started in 2015, but gained steam this year, with the sitting government&#8217;s laissez-faire approach and climate change denialism.</p> <p><strong>Illegal fires.</strong> Most recently, a spike in Amazon fires became cause for international outcry—and the Jair Bolsonaro administration&#8217;s worst crisis so far. Data from the Amazon Environmental Research Institute (Ipam) shows that the recent fire spree happened predominantly within private properties—which are forced to preserve 80% of their natural vegetation, according to the current legislation.</p> <p><strong>Government.</strong> Environmental agencies accuse the government of dismantling environmental enforcement instruments. The president has questioned the legitimacy of data produced by official agencies on deforestation, and called for private contractors to monitor Amazon deforestation.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <p><strong>Reform.</strong> The Senate Constitution and Justice Committee approved the pension reform bill yesterday, and the proposal now moves on to a floor vote. In two rounds of voting, the reform bill needs the support of 60% of senators before it may finally go for presidential sanctioning. The version approved by the House in August remains unaltered—with senators pushing their changes to the bill in a separate piece of legislation, which will process parallel to the main bill.&nbsp;</p> <p><strong>Savings. </strong>In a move to save money, the Economy Ministry has limited its working days to between 8 am and 6 pm. Before and after that, electricity at the department is switched off, along with the building&#8217;s internet connection. The ministry plans to save BRL 366m with these measures this year alone, and intends to set an example to be followed by all other ministries.&nbsp;</p> <p><strong>Federal Police.</strong> The removal of current Federal Police Chief Maurício Valeixo is considered just a matter of time. This week, President Bolsonaro once again expressed his desire to pick a new person for the job—and called marshals&#8217; negative reactions toward his meddling &#8220;nonsense.&#8221; Caught in the crossfire is Justice Minister Sergio Moro. He is, in theory, the boss of the Federal Police, but has been continually (and publicly) undermined by Mr. Bolsonaro.</p> <p><strong>Moro.</strong> The once &#8220;super minister&#8221; might have lost prestige within the administration—but remains a favorite of voters. According to recent polls, his approval ratings remain high at 54% (despite recent leaks showing misconduct during his years ahead of Operation Car Wash), way above the president&#8217;s own numbers, at 29%.</p> <p><strong>Car Wash.</strong> A group of six federal prosecutors working for Operation Car Wash in Brasília has collectively resigned, in protest against Prosecutor General Raquel Dodge. They protest her decision to dismiss an investigation into House Speaker Rodrigo Maia, and another one into the brother of Supreme Court Chief Justice Dias Toffoli. Both were mentioned by a Car Wash collaborator as recipients of kickbacks.</p> <p><strong>Abuse of Office.</strong> Jair Bolsonaro may ease dissatisfaction among law enforcement agents today, as he is set to veto 36 of 44 new rules in the so-called &#8220;Abuse of Office Act,&#8221; a law to curb excesses from investigators—but accused of narrowing the actions of the police and prosecutors. Congress, however, could become disgruntled—and many party leaders are whipping votes to overturn the vetoes and impose a defeat to the president.</p> <p><em><strong>Correction:</strong> an earlier version of this text says that Jair Bolsonaro will veto 36 of 44 articles of the so-called &#8220;Abuse of Office Act.&#8221; It has been changed to &#8220;36 of 44 new rules.&#8221; </em>

Our content is protected by copyright. Want to republish The Brazilian Report? Email us at