Can Bolsonaro ‘green-wash’ Brazil’s image?

. Sep 24, 2019
UNGA UN General Assembly

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Good morning! Today, we cover Jair Bolsonaro’s debut in the UN General Assembly. Is the Boeing-Embraer deal in jeopardy? And how Brazilians perceive corruption. (This newsletter is for platinum subscribers only. Become one now!)

UN General Assembly: Can Bolsonaro ‘green-wash’ Brazil’s image?

At 10 am today (Brasília time),

President Jair Bolsonaro is expected to deliver the first speech of the 74th UN General Assembly. It is a tradition, <a href="">dating back to the 1940s</a>, for Brazil to open the debate rounds. This time around, however, Mr. Bolsonaro will face a level of scrutiny none of his predecessors did—following an international crisis sparked by a rise in Amazon fires (and Brazil&#8217;s subsequent aggressive rhetoric).</p> <p><strong>Why it matters.</strong> Mr. Bolsonaro is tasked with the mission of recovering Brazil&#8217;s image as an important agent in the fight against climate change. The president has been advised to propose bold actions to protect the environment and highlight the government&#8217;s ambitious economic reforms. Even the agricultural lobby is expecting an inflection in the recent tone of speeches from the federal administration—as they fear losing markets if their products are associated with environmental destruction.</p> <p><strong>Bannon.</strong> Far-right activist (and former White House advisor) Steve Bannon could have had some input in Jair Bolsonaro&#8217;s speech. A photo of him next to Eduardo Bolsonaro (the president&#8217;s son and possibly Brazil&#8217;s future ambassador to the U.S.) was leaked.</p> <hr class="wp-block-separator"/> <figure class="wp-block-image"><img src="" alt="eduardo bolsonaro steve bannon un" class="wp-image-24771" srcset=" 1024w, 300w, 768w, 610w, 2048w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>UN speech? Eduardo Bolsonaro (first on the left), and Steve Bannon (first on the right)</figcaption></figure> <hr class="wp-block-separator"/> <p><strong>Climate summit.</strong> Brazil chose not to take part in yesterday&#8217;s Climate Summit, in New York. The event was marked by Swedish activist Greta Thunberg&#8217;s speech—she and 15 other people filed a UN complaint against Brazil, Germany, Argentina, France, and Turkey for violating children’s rights by <a href="">failing to take adequate action</a> against climate change.</p> <p>The summit, however, yielded few commitments. The U.S. and China (the world&#8217;s two largest polluters) did not speak. Meanwhile, French President Emmanuel Macron announced that the World Bank, the Inter-American Development Bank, and Conservation International have pledged USD 500 million to fund reforesting actions in the Amazon. Mr. Macron has tried to place himself as a leader on climate change issues, and has conditioned trade deals to environmental actions from countries like Brazil and the U.S.</p> <p>According to the World Meteorological Organization&#8217;s latest report, 2014-2019 was the hottest five-year period on record. The world is getting hotter, faster.</p> <p><strong>Venezuela.</strong> In a 16-1 vote (with one abstention), foreign ministers of the member countries of the Inter-American Treaty of Reciprocal Assistance (Tiar) approved a resolution saying that Nicolás Maduro&#8217;s regime in Venezuela is a &#8220;threat to the <a href="">security</a> and stability&#8221; of the region. It is the first time that the treaty has been activated since the Cold War. In practical terms, it allows countries to sanction persons and entities linked to the Maduro administration. It could ultimately lead to intervention in a country—although any measure needs at least two-thirds of votes from member countries.</p> <hr class="wp-block-separator"/> <h2>EU to probe Embraer-Boeing deal</h2> <p>Boeing is about to be investigated by antitrust authorities in the European Union over its bid for a controlling stake in Brazil&#8217;s jet maker <a href="">Embraer</a>.</p> <p><strong>Why it matters.</strong> The deal, worth USD 4.2 billion, is arguably the biggest in commercial aviation in decades, and would reshape a global passenger jet duopoly and reinforce Western companies against newcomers from China, Russia, and Japan. It was considered crucial for the future of Embraer—but also gives Boeing a foothold in the lower end of the market, enabling the company to compete with Canadian planemaker Bombardier (which recently merged with Airbus).</p> <p><strong>Timetable.</strong> The European Commission set October 4 as the deadline for its preliminary assessment on the deal, after which a large-scale investigation will take place (lasting up to five months). Sources cited by <em>Reuters</em> say that authorities will probe the effects on the market of the reduced number of players in various segments.</p> <p><strong>Stock.</strong> The reports on the investigation pushed Embraer prices down, closing the day at -2.05 percent. Boeing also lost 0.76 percent on the New York Stock Exchange.</p> <hr class="wp-block-separator"/> <h2>Brazilians lose trust in institutions</h2> <p>Transparency International released its <a href="">Global Corruption Barometer</a>, showing that Brazilians have grown more skeptical of their institutions. No less than 57 percent believe that the presidency is a corrupt institution, and 63 percent say the same about Congress. People have also lost confidence in law enforcement, the judiciary system, and CEOs (deemed as corrupt by 50 percent of people heard by Transparency International).</p> <p><strong>Why it matters.</strong> The results are in line with surveys by other institutions, such as the Latinobarómetro, showing that Brazilians don&#8217;t feel represented by their institutions. At a moment when fringe groups calling for a military intervention become more and more mainstream, it is a worrisome finding.</p> <p><strong>Individual role.</strong> For 82 percent of Brazilians, citizens play a vital role in the fight against corruption. And 11 percent admitted to having paid bribes to a public official within the last year.</p> <div class="flourish-embed" data-src="visualisation/701535"></div><script src=""></script> <hr class="wp-block-separator"/> <h2>What else you should know</h2> <p><strong>Congress.</strong> Senate President Davi Alcolumbre called for a joint session of Congress today to analyze recent vetoes issued by President Jair Bolsonaro on laws approved by the Legislative branch. The two houses will also debate on the 2020 budget and on the release of funds for several ministries. The joint session pushed the first-round vote on the pension reform to tomorrow at 4 pm.&nbsp;</p> <p><strong>Police.</strong> Rio de Janeiro Governor Wilson Witzel blamed drug traffickers and users for the death of 8-year-old Agatha Félix during a police operation in a favela, on Friday. &#8220;It is indecent to use a coffin as a political platform,&#8221; he said about critics of his belligerent security policy. Members of his administration say the girl&#8217;s death was an &#8220;isolated event.&#8221; The UN Human Rights Commission denounced Brazil for Agatha&#8217;s death.</p> <p><strong>Prisons.</strong> Brazil&#8217;s penitentiary system has become famous internationally for recent massacres. But the main causes of death among prisoners are actually related to sanitary conditions and lack of medical assistance—responsible for 61 percent of inmate deaths. The chances of contracting tuberculosis, HIV, or sifilis are exponentially higher within a prison than they are outside. In the case of tuberculosis, incidence within prisons is 4,500 percent higher.</p> <p><strong>Steel.</strong> Investment bank Bradesco BBI has lowered its estimates of Ebitda (earnings before interest, tax, depreciation, and amortization) for Brazilian steel companies by 10 percent. It also reduced the target for their stock prices by somewhere between 10 and 20 percent. Analysts justify their decision by an expected excess of steel in international markets next year, the global economic slowdown, and increasing steel production in China.</p> <p><strong>Aviation.</strong> Congress votes today on whether to reinstate free baggage allowances for domestic flights in Brazil. Lawmakers want airlines to drop prices, though. Reinstating the franquia could deter foreign low-cost carriers from coming to Brazil.

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