Congress wants to place Bolsonaro in “political quarantine”

leaders in Brasília see President Jair Bolsonaro not as a leader who will steer the country away from a looming crisis, but rather as an obstacle to public health policies. They have decided to manage the Covid-19 crisis without Mr. Bolsonaro, as they don&#8217;t trust his honesty nor decision-making skills. Sources in Brasília say the president&#8217;s decision to <a href="https://brazilian.report/newsletters/brazil-weekly/2020/03/16/jair-bolsonaro-attack-public-health-coronavirus-markets/">join anti-Congress protests on Sunday amid a pandemic</a> has pushed his relationship with lawmakers to a point beyond repair.</p> <p><strong>Why it matters.</strong> Heads of Congress hope that Mr. Bolsonaro will at least sanction the bills passed by lawmakers to cushion the effects of the novel coronavirus outbreak. But the president has shown signs that he wants confrontation.</p> <p><strong>Quarantine.</strong> By politically inoculating the president, establishment leaders want to suppress talk about impeachment to avoid even more political turmoil. As we mentioned last week, the I-word is no longer taboo in Brasília.&nbsp;</p> <ul><li>Congressman Alexandre Frota—a former ally of the Bolsonaro family—<a href="https://twitter.com/alefrota77/status/1239534556556021760">promised to file an impeachment request</a> against the president.</li><li>Even the authors of the impeachment request against Dilma Rousseff have called out Mr. Bolsonaro. <a href="https://brazilian.report/power/2020/02/28/janaina-paschoal-author-dilma-impeachment-oust-bolsonaro/">State lawmaker Janaína Paschoal</a> asked him to step down and &#8220;let [VP Hamilton] Mourão do the job,&#8221; while former Justice Minister Miguel Reale, Jr. asked for the president&#8217;s mental capacity to be examined by a physician.</li></ul> <p><strong>Guedes.</strong> Even <a href="https://brazilian.report/power/2020/03/14/covid-19-crisis-chips-away-paulo-guedes-image/">Economy Minister Paulo Guedes is seen as a liability</a>, due to his reluctance to pass stimulus measures. On Monday, he announced a BRL 147-billion package—but there is little &#8220;new money&#8221; in it. Most of it comes from advances of benefits, a greenlight to access a mandatory severance fund (FGTS), or postponing taxes and renegotiating debts. The plan is to <a href="https://brazilian.report/tourism/2020/03/16/brazil-intervenes-in-the-credit-market-tourism-airlines-events/">foster credit to help companies</a> in distress—while <em>not</em> using public money in the process.</p> <ul><li>There are glaring differences between what the Brazilian government is doing when compared to other countries. At no point did Mr. Guedes address the issue of how the outbreak will affect the gig economy—which is the biggest source of new jobs in the Brazilian market. Meanwhile, French President Emmanuel Macron <a href="https://www.nytimes.com/2020/03/16/world/europe/coronavirus-france-macron-travel-ban.html">announced</a> severe lockdown measures on Monday—and promised to suspend utility bills and rent for small businesses, as well as creating a fund to support them.</li></ul> <hr class="wp-block-separator"/> <h2>Two &#8216;Bloody Mondays&#8217; in a row</h2> <p>As expected since Sunday evening, markets across the globe collapsed once again on Monday. The Ibovespa index in São Paulo tumbled almost 14 percent throughout the day, triggering a circuit breaker only 30 minutes into trading—the fifth such stoppage in the last seven days. The Brazilian currency continued to lose ground against the U.S. Dollar, and the foreign exchange rate closed the day at BRL 5.0612—above the BRL 5 psychological threshold for the very first time.</p> <p><strong>Why it matters.</strong> The Brazilian currency is the worst-performing among countries of the G20. A weaker currency can push inflation up and diminish consumers&#8217; confidence in the economy.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/1599052"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Stop trading?</strong> The year 2020—and the past week in particular—has been dreadful for investment funds, with some enduring losses of over 40 percent. Many traders have publicly called for the suspension of the São Paulo stock market while the coronavirus panic lasts, but the possibility is not being officially considered. Today, the Philippines became the first country to <a href="https://www.thestar.com.my/news/regional/2020/03/17/philippines-the-first-to-suspend-stock-market-trade-over-virus-fears">suspend its stock exchange</a> &#8220;until further notice.&#8221;</p> <p><strong>Interest rates.</strong> After the Fed slashed benchmark interests in the U.S., there is some expectation that Brazil&#8217;s Central Bank will follow suit. The bank&#8217;s Monetary Policy Committee meets today and tomorrow—unless a surprise announcement comes earlier—and analysts expect the current 4.25-percent rate to be cut by 0.25 to 1 percentage point.</p> <hr class="wp-block-separator"/> <h2>Brazil could be underestimating the spread of Covid-19</h2> <p>“We have a simple message to all countries—test, test, test,” said World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus during a press conference in Geneva, calling the pandemic “the defining global health crisis of our time.” Still, the Brazilian government will not change its protocol: in places with local transmissions such as Rio de Janeiro and São Paulo, only severe patients will be tested.</p> <p><strong>Why it matters.</strong> Most infected patients show mild symptoms—and many undetected people could be circulating now, spreading the virus.</p> <ul><li>&#8220;It is strange that the WHO would make such a recommendation, as there are not enough inputs to test everyone,&#8221; said Brazil&#8217;s Health Surveillance Secretary Wanderson Kleber de Oliveira.</li></ul> <p><strong>Rough weeks ahead.</strong> The curve of the Covid-19 progression in Brazil is worrisomely similar to that of European countries. Meaning that, within three to four weeks, Brazil could become the next Italy unless authorities take swift action.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/1592842"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Underreporting.</strong> The chart above suggests that the U.S. has been less affected by Covid-19 than other regions. However, the country ran fewer than 4,000 tests from mid-January to February 28, suggesting that the low numbers are linked to underreporting.</p> <hr class="wp-block-separator"/> <h2>A Brazilian-made Covid-19 vaccine?</h2> <p>Researchers at the immunology Lab at the University of São Paulo&#8217;s Heart Hospital (Incor) are developing a vaccine against Covid-19—and expect to come up with an inoculation that can be tested on animals within just a few months.</p> <p><strong>What will it be like?</strong> The Brazilian team is focusing on producing a vaccine based on VLPs (virus-like particles). These are noninfectious multi-protein structures engineered to self-assemble from viral structural proteins. VLPs were used in the development of vaccines against the chikungunya virus.</p> <p><strong>Other studies.</strong> The U.S. has begun <a href="https://www.livescience.com/first-person-coronavirus-vaccine-clinical-trial.html">trials of an experimental vaccine</a> in Seattle. Over the next six weeks, scientists plan to enroll 45 participants. The U.S. National Institute of Allergy and Infectious Diseases allowed the research to be fast-tracked into clinical trials without thorough testing in animals, though it would still take 12 to 18 months for any vaccine to be ready for public use.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>State of emergency.</strong> São Paulo Mayor Bruno Covas has declared a state of emergency in the city. The move allows City Hall to fast-track public bidding processes for supplies and to commandeer private property and assets from companies and individuals, in return for compensation. The city&#8217;s administration will also be able to suspend some public services, and the move regulates home-office rules for civil servants.</li><li><strong>Prison riot.</strong> Inmates staged riots in at least four penitentiaries in the state of São Paulo on Monday, with over 1,000 prisoners fleeing. Tensions were already high after visitations had been suspended due to behavior problems—but the straw that broke the camel&#8217;s back was when the state government suspended furloughs scheduled for the next few days, a move linked to the fight against Covid-19.</li><li><strong>Immigrants.</strong> The Federal Police has restricted individual appointments for issuing passports and visa processes for foreigners. According to authorities, all migratory deadlines will be extended until the public health emergency is over.</li><li><strong>Meat.</strong> Marfrig, one of Brazil&#8217;s leading meat companies, is promoting an overhaul of its board. The company is letting go of chief operating officer Eduardo Miron, chief financial officer Marco Spada, and Operations and Controls VP Fábio Vasconcelos. Miguel Gularte, who headed South American operations of the group, will take over as CEO.