Bolsonaro cancels anti-Congress protests

. Mar 13, 2020
health minister bolsonaro suspends anti-congress protest Health Minister Luiz Henrique Mandetta, President Bolsonaro, and a sign-language interpreter during the president's live Facebook broadcast

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Today will be another horrible day for investors, as Asian markets have collapsed amid a sell-off spree. In Brazil, President Jair Bolsonaro asks supporters to postpone anti-Congress rallies, and the government announces its latest moves against Covid-19.

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Important

President

Jair Bolsonaro&#8217;s <a href="https://brazilian.report/newsletters/brazil-daily/2020/03/12/covid-19-brazil-presidential-palace-trump-bolsonaro/">Press Secretary Fábio Wajngarten tested positive for Covid-19</a> yesterday after taking part in a presidential visit to the U.S., which included a meeting with President Donald Trump. All members of the Brazilian delegation are being screened—including three members of the first family: the president himself, First Lady Michelle Bolsonaro, and Congressman Eduardo Bolsonaro. The results will be released today.</p> <p>Meanwhile, Mr. Trump said he was &#8220;not concerned&#8221; of having been exposed to the virus.</p> <hr class="wp-block-separator"/> <h2>Following coronavirus scare, Bolsonaro calls off anti-Congress rally</h2> <p>Until early in the week, President Jair Bolsonaro dismissed the dangers of the Covid-19 outbreak and incited supporters to take to the streets and protest against Congress and the Supreme Court on Sunday. But after the World Health Organization declared a global pandemic and his own press secretary tested positive for the virus, Mr. Bolsonaro decided to back down. In a live Facebook broadcast and later a TV and radio address to the nation, the president asked for the demonstrations to be postponed, saying his supporters had already sent &#8220;a tremendous message to lawmakers.&#8221;</p> <p><strong>Why it matters.</strong> The rallies were set to happen precisely as Brazil sees a surge in the number of infections. Gathering thousands of people in the same area would have turned the political event into a massive Covid-19 transmission site.</p> <p><strong>The president&#8217;s speech. </strong>Despite calling the rallies off, the president defended the anti-Congress movement firmly—saying the protests are &#8220;legitimate&#8221; and &#8220;unshakable.&#8221; But Mr. Bolsonaro failed to reassure Brazilians about what is to come, saying &#8220;the public healthcare system has a limit of patients it can treat,&#8221; but not listing the actions his administration is taking to curb the effects—both medical and economic—of the pandemic. The president seemed more worried about keeping his supporters galvanized.</p> <ul><li>Politically, the tone used by the president will keep tensions high—as he said &#8220;the fight goes on&#8221; and suggested protests may be rescheduled to take place &#8220;in a month or so.&#8221; The country is set to face an emergency of unknown dimensions, and having authorities at each others&#8217; throats can do no good.</li></ul> <hr class="wp-block-separator"/> <h2>Brazil&#8217;s fight against Covid-19: Not only the reforms</h2> <p>The Economy Ministry announced five measures to curb the economic effects of the Covid-19 outbreak, mainly directed to lower-income populations:</p> <ul><li>Advance of Christmas bonuses for retired workers and pensioners;</li><li>Cuts to the interest rates in payroll loans;</li><li>Retired workers will not be required to present proof of life for at least 120 days;</li><li>Cuts to import taxes on medical products;</li><li>Priority to medical products at customs.</li></ul> <p><strong>Aid for airlines?</strong> Carriers are hemorrhaging money, as people have been advised to avoid all non-essential air travel. Brazil&#8217;s Infrastructure Ministry is studying an aid package to these firms, possibly through a temporary lift of payroll and fuel taxes.</p> <p><strong>Unimpressed.</strong> House Speaker Rodrigo Maia, once the champion of Economy Minister Paulo Guedes&#8217; agenda in Congress, says the government&#8217;s plan &#8220;has barely anything in it,&#8221; and that he was shocked Mr. Guedes &#8220;could think in such a mediocre way.&#8221;</p> <div class="flourish-embed flourish-chart" data-src="visualisation/1541240"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p>Meanwhile, the number of confirmed cases reached 136 on Thursday night—and health authorities say local transmission has taken the outbreak to a new level. The Health Ministry passed new norms to deal with the spread, including the following:</p> <ul><li>Treatment and tests will be made mandatory for reluctant patients;</li><li>State authorities can impose lockdowns, as long as they are properly reported to the population;</li><li>Assets belonging to people and private companies can be called upon to help with the anti-Covid-19 effort. This rule is intended to reach private hospitals and insurance companies—but the presence of &#8220;people&#8221; in the decree leaves open the possibility of the government demanding the use of individual property in the case of a lack of hospitals.</li></ul> <p><strong>By the numbers.</strong> Since 2007, Brazil&#8217;s public healthcare system lost approximately 50,000 hospital beds.</p> <hr class="wp-block-separator"/> <h2>Brazilian markets continue to meltdown</h2> <p>Financial markets everywhere have entered &#8220;survival mode,&#8221; with investors <em>completely</em> averse to risk. Moments like these put developing economies such as Brazil&#8217;s in a particularly fragile position. Thursday&#8217;s trading session began with the U.S. Dollar hitting the BRL 5.00 threshold, and saw the stock market trigger a circuit breaker not once, but <em>twice</em> before lunch.</p> <p>The São Paulo stock market benchmark index was down by almost 20 percent—nearly triggering a <em>third</em> circuit breaker in a single day, which has never been seen in Brazil.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/1569470"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Close.</strong> The Brazilian Real finished the day down 1.38 percent, with the exchange rate at USD 1 : BRL 4.786 (a new nominal record). Since January 1, the Brazilian currency has lost nearly 20 percent of its value.</p> <p><strong>Change of tone.</strong> Last week, Economy Minister Paulo Guedes said the U.S. Dollar would reach BRL 5.00 if he was to &#8220;make lots of mistakes.&#8221; After the currency did reach that level, Mr. Guedes said he was misquoted—and that he was talking about the entire political establishment making mistakes.</p> <p><strong>Friday the 13th.</strong> Today, Asian markets signal yet another horrible day for investors. <a href="https://www.cnbc.com/2020/03/13/what-are-circuit-breakers-and-how-they-differ-across-asian-markets.html">Circuit breakers were triggered</a> in India, Japan, South Korea, Indonesia, Thailand, and the Philippines.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Cruise.</strong> Silver Shadow, a cruise ship with 609 people on board coming from the Bahamas, has been isolated along the coast of Recife—the capital of Pernambuco state—after a 79-year-old Canadian patient showed Covid-19 symptoms.</li><li><strong>Olympics.</strong> The Brazilian Olympic Committee will announce today the cancellation of its major events before the Tokyo 2020 Olympics. A Brazilian delegation was expected to inspect facilities next week, but the trip to Japan was called off. The Olympics themselves could be called off, or at least postponed. For now, however, International Olympic Committee Chairman Thomas Bach has maintained July 24 as the opening date for the event.</li><li><strong>Anti-Bolsonaro protests.</strong> If Covid-19 was responsible for the postponing of pro-Bolsonaro rallies, it will have the same effects on union protests against the government. Ten major trade unions are pondering shutting down demonstrations scheduled for March 18, fearing transmission among workers.</li><li><strong>Congress.</strong> Lawmakers are mulling over calling a parliamentary recess amid the Covid-19 outbreak—which would essentially bury the possibility of passing any reform in 2020.&nbsp;

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