Climate change: Rising ocean levels a threat to Brazilian cities

Good morning! We’re covering the (debunked) links between Jair Bolsonaro and the Marielle Franco case. How the all-time low interest rates impact the economy. And the threat of climate change and rising sea levels to Brazilian cities. (This newsletter is for platinum subscribers only. Become one now!)

prestigious evening newscast published links between President Jair Bolsonaro and the Marielle Franco murder case, Brazil has been engulfed by an insane cycle of information and counter-information about how (and if) Mr. Bolsonaro fits into the case. Here is what happened so far: <ul><li>Report. On Tuesday night, Jornal Nacional published details of a sealed statement saying that, on the day of the murder (March 14, 2018), Mr. Bolsonaro buzzed into his gated community the man who allegedly drove the getaway car during the assassination. The believed trigger man also lives in the same housing complex. On that day, however, Mr. Bolsonaro was in Brasília—as proven by congressional logs.</li><li>Reactions. The president’s supporters relentlessly attacked investigators and the press on social media. Meanwhile, Justice Minister Sergio Moro called for a probe into the mentions of the president’s name—suspecting an alleged malicious attempt to involve Mr. Bolsonaro.</li><li>Debunked. As the day went on, members of Rio’s State Prosecution Office said the statement had been proven false, and that audio records showed the president didn’t buzz the suspect into his gated community. Prosecutor General Augusto Aras said the president was a victim of falsely raised suspicions.</li></ul> Why it matters. Details of the investigation were leaked, contributing to the discredit of Rio’s police and prosecutors. In September, former Prosecutor General Raquel Dodge asked for the Marielle Franco investigation to be transferred to the Federal Police. Many feared this would delay the investigation—but the request is now gaining steam as it becomes clear just how poorly the case has been handled. Also. The episode should further antagonize Mr. Bolsonaro and the press. Right after the report, Mr. Bolsonaro suggested he could deny the renewal of Globo’s state concession to operate TV frequencies, which is set to expire in 2023. However, the president can arbitrate on the matter in the final year of the concession (Mr. Bolsonaro’s term ends in December 2022). Bottom line. In 24 hours or so, we seem to have gotten farther from the truth about Marielle Franco’s murder than we were before. Let’s not forget. A reason for which so many people believed in the connections between Mr. Bolsonaro and the case is his family’s extensive links to members of urban militias—including some of the suspects in the case. <a href="https://brazilian.report/newsletters/daily-briefing/2019/10/04/organized-crime-links-jair-bolsonaro-urban-militias/">We explained them here</a>. <hr class="wp-block-separator"/> <h2>A new all-time low for Brazil’s interest rates</h2> As expected, the Central Bank’s Monetary Policy Committee lowered the Selic benchmark interest rate from 5.5 to 5 percent a year. And, in a rare move, the bank suggested a further 0.5-percentage point cut could happen in December. Just three years ago, the Selic rate was at 14.25 percent. <div class="flourish-embed" data-src="visualisation/556104"></div><script src="https://public.flourish.studio/resources/embed.js"></script> Why it matters. A lower Selic rate means individuals and companies can access cheaper credit—which could stimulate investments. Housing credit, for instance, has gone from around 11-12 percent to 6.75 percent a year in three years. It also reduces the profitability of fixed-income investments, pushing operators into riskier products. Yes, but … Not all financial products are affected equally. <a href="https://brazilian.report/opinion/2019/04/17/interest-rates-chocking-brazil-economy/">Annual interest on credit cards</a>, for instance, has gone up to 307.8 percent in September. Credit cards and installment credit are widespread, with over 77 percent of households exposed to these rates in some way. The Central Bank believes that the solution for these sky-high rates is increasing competition by allowing fintechs to join the market and open banking. Currently, over <a href="https://brazilian.report/money/2018/08/13/brazilian-banks-profits/">80 percent of the Brazilian credit market is controlled by just five large banks</a>. <hr class="wp-block-separator"/> <h2>Rising ocean levels a threat to Brazilian cities</h2> A <a href="https://www.nature.com/articles/d41586-019-02385-y">study</a> published by Nature projects that areas currently home to 1.4 million Brazilians will begin to suffer constantly with flooding, while areas occupied by another 1 million people could be permanently submerged as ocean levels continue to rise. Why it matters. The Brazilian population is mainly concentrated in municipalities close to the coast. Less than 6 percent of cities are home to more than 120 million people.  <figure class="wp-block-image"><img src="https://brazilian.report/wp-content/uploads/2019/10/Screen-Shot-2019-10-31-at-08.03.16.png" alt="" class="wp-image-26728" srcset="https://brazilian.report/wp-content/uploads/2019/10/Screen-Shot-2019-10-31-at-08.03.16.png 881w, https://brazilian.report/wp-content/uploads/2019/10/Screen-Shot-2019-10-31-at-08.03.16-300x251.png 300w, https://brazilian.report/wp-content/uploads/2019/10/Screen-Shot-2019-10-31-at-08.03.16-768x642.png 768w, https://brazilian.report/wp-content/uploads/2019/10/Screen-Shot-2019-10-31-at-08.03.16-610x510.png 610w" sizes="(max-width: 881px) 100vw, 881px" /></figure> Impact. Scott Kulp, a scientist at Climate Central who leads the study, says climate change will reshape cities, economies, coastlines, and entire global regions during our lifetime. “Brazil and other coastal nations will only have enough time to plan and build protection systems if the speed of rising ocean levels goes down.” Present problem. The city of Santos—where Brazil’s busiest port is located—is already adapting to the rising sea levels caused by climate change. Since 2000, there have been more floods and undertows than in the past century. By 2100, without changes, the damages caused will amount to USD 1.5 billion. Climate change. Since 2006, sea levels have risen by 3.6 millimeters each year. At this pace, it will have risen over 1 meter by the end of the century. <figure class="wp-block-embed-youtube wp-block-embed is-type-video is-provider-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper"> <iframe class='youtube-player' type='text/html' width='1200' height='675' src='https://www.youtube.com/embed/TFYbPhuVgoQ?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent' allowfullscreen='true' style='border:0;'></iframe> </div></figure> <hr class="wp-block-separator"/> <h2>What else you should know</h2> Oil spill. Vice President Hamilton Mourão said the government has identified 11 ships as the possible culprits for the massive oil spill along Brazil’s Northeast coast. Mr. Mourão suggested the ship would have thrown oil into the ocean in order to reduce its weight and maintain stability. So far, 2,500 tons of crude has been cleaned from beaches—which represents just 1 percent of what a tanker can carry—and stains have affected 283 locations. Bolsonaro v. the Supreme Court. Filipe Martins, President Jair Bolsonaro’s special advisor on international issues, will be investigated by the Supreme Court for attacking the court on social media. Mr. Martins reposted a video (initially shared by the president’s official Twitter account) depicting the Supreme Court as a threatening hyena charging at Mr. Bolsonaro. The advisor suggested on Twitter that the court would only act properly if Brazil “became a country of lions.” Ford. After 52 years, Ford’s plant in São Bernardo do Campo is officially closed. The shutdown is part of the company’s global restructuring program, launched last year. The plant produced models that became iconic in Brazil, such as the Belina, Maverick, and Corcel. In September, Brazilian automaker Caoa signed a preliminary agreement to buy the plant—but asked for 45 days to carry out due diligence. That period has expired, but neither side provided an explanation for the delay. Chile. Following protests demanding deep economic reforms, Chilean President Sebastián Piñera canceled two international events: COP25, a UN climate change conference (which was supposed to happen in Brazil in December) and the Asia Pacific Economic Cooperation (November). Experts say the move shows the government doesn’t expect protests to end soon, and that Mr. Piñera remains lost about how to respond to demands. Our Explaining Brazil podcast deals with the common thread of protests in Latin America. <a href="https://brazilian.report/podcast/2019/10/30/explaining-brazil-latin-america-veins-wide-open/">Listen here</a>.  🎃Halloween. Brazil doesn’t really celebrate Halloween. We do have a “Day of the Dead,” but it is by no means as festive as Mexico’s. In Brazil, the date is reserved for mourning and introspection. Tradition has it that one must visit the graves of his or her beloved ones in the early hours of the day—which, in some cities, pushes flower sales up by 40 percent just for the day.

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