How politicians silently cripple local newsrooms in Brazil

. Jan 10, 2020
How politicians silently cripple local news organizations in Brazil Image: Stokkete/Shutterstock

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Happy Friday! We’re covering today a new way to cripple local news organizations in Brazil. The official 2019 inflation rate. And the newest move by a massive post-Car Wash graft probe. (This newsletter is for premium subscribers only. Become one now!)


How to smother local news

As Brazil’s economy peaked in the late 2000s,

so did newsrooms across the country. But as the crisis came, the impact on the journalism business was as brutal as could possibly be imagined. And while newsrooms have shrunk—in a process not restricted to Brazil—journalist Murillo Camarotto noted a curious trend in the northeastern state of Pernambuco: reporters of the state&#8217;s two most-influential papers were quitting their jobs to work for the institutions they used to investigate.</p> <p>His findings were published in the research &#8220;<a href="https://reutersinstitute.politics.ox.ac.uk/sites/default/files/2019-10/Journalist_Fellow_paper_MURILLO_CAMAROTTO.pdf">Local Media in Brazil: draining the newsrooms in the country&#8217;s poorest region</a>,&#8221; by the Reuters Institute and the University of Oxford.</p> <p><strong>Bottom line.</strong> Instead of clashing with news organizations, local administrations have coopted top reporters with high salaries, diminishing the checks and balances they are supposed to be subjected to.</p> <p><strong>Why it matters.</strong> Recent studies <a href="https://www.newswise.com/articles/local-newspaper-closures-polarize-voters-choke-political-progress">show</a> that as local newsrooms lose steam, residents become less informed, less engaged in their communities, and less influential with their legislators. In these areas, political polarization tends to grow and voter turnout decreases.</p> <p><strong>Media landscape.</strong> <a href="https://brazilian.report/business/2017/11/01/brazils-media-freedom-speech/">Brazil&#8217;s media landscape is characterized by being concentrated</a> in the hands of just a few families—something Reporters Without Borders describes as &#8220;dangerous for democracy.&#8221; According to RSF, Brazil’s most powerful groups lack transparency and carefully cover their owners’ private interests. Even though broadcasting groups benefit from public concessions, no legal or constitutional mechanisms require them to publicize their information.</p> <p><strong>News deserts.</strong> A total of 37.4 million Brazilians—some 18 percent of the population—live in so-called &#8220;news deserts,&#8221; that is, municipalities with not a single local news organization. Another 27.5 percent live in &#8220;near-news deserts,&#8221; areas with only one or two newsrooms. In the Northeast, 73 percent of municipalities fit the bill as news deserts.</p> <h4 style="text-align:center">Brazil&#8217;s news deserts</h4> <figure class="wp-block-image"><img src="https://brazilian.report/wp-content/uploads/2020/01/news-deserts-brazil-1006x1024.jpg" alt="news deserts brazil" class="wp-image-30057" srcset="https://brazilian.report/wp-content/uploads/2020/01/news-deserts-brazil-1006x1024.jpg 1006w, https://brazilian.report/wp-content/uploads/2020/01/news-deserts-brazil-295x300.jpg 295w, https://brazilian.report/wp-content/uploads/2020/01/news-deserts-brazil-768x782.jpg 768w, https://brazilian.report/wp-content/uploads/2020/01/news-deserts-brazil-610x621.jpg 610w, https://brazilian.report/wp-content/uploads/2020/01/news-deserts-brazil.jpg 1574w" sizes="(max-width: 1006px) 100vw, 1006px" /><figcaption>(Areas in white are the so-called news deserts)</figcaption></figure> <hr class="wp-block-separator"/> <h2>Inflation numbers for 2019 to be released today</h2> <p>Later this morning, the Brazilian Institute of Geography and Statistics (IBGE) will publish the <a href="https://brazilian.report/business/2019/10/17/brazil-changing-calculates-inflation/">official inflation rate</a> for 2019. According to the latest Focus Report—a weekly survey by the Central Bank with top-rated investment firms—markets expect the rate to be at 4.13 percent, which is just below the government&#8217;s target of 4.25 percent.</p> <p><em>Update: According to IBGE, Brazil&#8217;s 2019 inflation was 4.31 percent—above both expectations and the median of the government&#8217;s target band (2.75 to 5.75 percent).</em></p> <div class="flourish-embed" data-src="visualisation/1213713"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p><strong>Why it matters.</strong> Inflation rates have been excessively low in Brazil in the recent past, largely due to sluggish economic activity. However, they have picked up in recent months, indicating the Brazilian economy is gradually recovering.</p> <p><strong>Pricey meat.</strong> At the end of 2019, meat prices pushed overall inflation rates upward. Due to a spike in demand from China—which is battling a swine flu outbreak—meat prices jumped 4.81 percent in December alone.</p> <hr class="wp-block-separator"/> <h2>Feds present indictments in massive graft probe</h2> <p>Federal marshals ahead of Operation Greenfield, a task force investigating corruption within public pension funds, presented charges against 29 people—including a former cabinet minister—suspected of siphoning over BRL 5.5 billion of funds.</p> <p><strong>Context.</strong> Operation Greenfield kicked off with a bang in September 2016, freezing USD 2.4 billion in assets belonging to 78 people under investigation—the largest amount ever in Brazil. The probe is scrutinizing the administration of pension funds for employees of four major state-run companies—Petrobras (oil), Correios (postal services), Caixa, and Banco do Brasil (banks)—as well as mining giant Vale.</p> <p><strong>Why it matters. </strong>These funds are administrated by people appointed by the government, and have lost an estimated amount of USD 15 billion in the last decade. The retirement money belonging to employees of these companies has vanished in businesses considered by prosecutors as “detrimental to the owners of the money” or “fraudulent.”</p> <p>The Federal Police allege evidence of “organized criminal activity” between senior business executives, pension fund managers, asset rating companies, and private equity funds.</p> <p><strong>Compensation.</strong> The feds want the defendants to pay a combined BRL 16 billion in compensation for the losses they caused.</p> <p><strong>Impact.</strong> As pointed out by law firm Kennedys, &#8220;with 353 individuals and institutions implicated, the ripple effects of Operation Greenfield may be felt just as strongly [as those of Operation Car Wash].&#8221;</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <p><strong>Censorship.</strong> Supreme Court Chief Justice Dias Toffoli struck down a ruling by a Rio de Janeiro state court censoring the movie &#8220;The First Temptation of Christ,&#8221; released by comedy troupe Porta dos Fundos on Netflix. The film mocks religious dogmas and portrays Jesus as a gay man. The initial ruling said preventing the movie from being seen was &#8220;more adequate and beneficial not to Christians, but to Brazilian society as a whole,&#8221; but the Chief Justice argued that a comedy special &#8220;doesn&#8217;t have the power to rock 2,000 years of Christian values.&#8221; On Christmas Eve, <a href="https://brazilian.report/power/2020/01/07/history-revival-brazilian-fascism-movements/">Porta dos Fundos&#8217; headquarters was petrol-bombed by a group linked to the Integralist movement</a>, an organization created in the 1930s and inspired by Italian fascism.</p> <p><strong>Banking.</strong> The Central Bank and Brazilian Federation of Banks are set to launch, by June of this year, a platform to provide financial education services to consumers—hoping that will help people reduce their level of indebtment. Regulators want banks to offer discounts to debtors who take the course. Last year, the Central Bank led an effort by banks to renegotiate debts, with cuts on due interest of up to 90 percent.</p> <p><strong>Credit.</strong> A new study shows that 65 percent of Brazilian families are in some sort of <a href="https://economia.estadao.com.br/noticias/geral,numero-de-familias-endividadas-cresce-mas-cnc-acha-positivo,70003151418">debt</a>. The number is not necessarily negative, as leases, mortgages, or any payment in installments count as debt. Economists celebrated as default rates remained stable and the average commitment of income with debt didn&#8217;t grow significantly, signaling toward a recovery of the Brazilian economy through consumption.</p> <p><strong>Bolsa Família.</strong> As we mentioned <a href="https://brazilian.report/newsletters/brazil-daily/2020/01/09/cyberwarfare-risk-has-increased-is-brazil-ready/">yesterday</a>, the Bolsonaro administration wants to reshape the conditional cash transfer program Bolsa Família, which has helped millions living in extreme poverty. A proposal drafted by the Citizenship Ministry wants to increase the program&#8217;s budget by BRL 16 billion, targeting the bottom two-thirds of the 13 million enrolled families. However, members of the economic team want to focus on austerity, and support an increase of only BRL 2 billion. Between 2019 and 2020, however, <a href="https://brazilian.report/power/2018/01/18/brazil-bolsa-familia-2018-election/">Bolsa Família lost</a> BRL 3 billion in funding, with a current budget of BRL 29.5 billion.</p> <p><strong>Religion.</strong> In another effort to pander to Evangelicals, President Jair Bolsonaro wants the government to subsidize churches&#8217; electricity bills. The move goes against Economy Minister Paulo Guedes&#8217; beliefs, but Mr. Bolsonaro wants to secure support from Evangelical segments, which can help him reach the 500,000 signatures he needs in at least nine states to officially launch his <a href="https://brazilian.report/power/2019/11/22/jair-bolsonaro-new-party-reshuffles-brazilian-politics/">new, far-right Alliance for Brazil party</a>.

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