Brazil to pay emergency salary to informal workers

. Mar 27, 2020
Brazil to pay emergency salary to informal workers "Do not leave your home," says billboard in Brasília. Jefferson Rudy/AB

This newsletter is for PREMIUM subscribers only. Become one now!

The relief package passed to help informal workers. The rise in Covid-19 infections and deaths. And Donald Trump’s latest move to topple Nicolás Maduro. 

Some relief for Brazil’s informal workers

On Thursday, Brazil’s lower house approved an emergency salary of BRL 600 (USD 120) for informal workers and disabled people. That’s three times the amount the government had proposed a week ago. Lawmakers also passed a BRL 1,200 monthly payment for single-parent households, catering to a demand from the Women’s Caucus in Congress. 

  • The bill, which now heads to the Senate, establishes that a maximum of two people in a single household may receive the benefit. In its current terms, the project should cost the government BRL 43 billion in three months.

Why it matters. This emergency aid is the first broad economic measure to advance since the coronavirus crisis began. It could help over 24 million workers.

  • Brazil has about 42 million informal workers or self-employed people. The former group is, by definition, one formed by precarious employment — and is more prevalent in states with low human development indexes.
  • What remains to be seen is how long it will take for the aid to actually get to families. A survey by economy news agency Broadcast shows that 63 percent of the BRL 309 billion in economic packages announced by the government haven’t yet been put into practice.

Highest bidder. This was a rare case in which power struggles between the government and Congress worked to the benefit of Brazilians. After the government proposed BRL 200 per month, House Speaker Rodrigo Maia defended an increase to BRL 500 (half of the minimum wage), leading President Jair Bolsonaro to raise his proposal even higher in an attempt to regain a leading role in the fight against Covid-19.

Red alert. Despite his regularly flippant remarks — such as claiming yesterday that “Brazilians jump into sewers and don’t get [sick]” — the president is worried about his popularity. His approval ratings have not yet dropped significantly but that could quickly change, once massive layoffs start and people’s living conditions worsen.


The worst 24 hours in a month

Thursday marked one month since the first confirmed Covid-19 infection in Brazil. And it was the day in which the country saw its biggest jump in deaths and confirmed cases. The death count rose by 20 to a total of 77, while infections increased by 482 to reach 2,915.

Assessment. Experts say cases in Brazil are massively underreported, as the country has tested very few patients — only 13.7 per 1 million inhabitants by mid-March. Out of 59 nations who report their total number of tests, Brazil ranked 53rd.

  • Fortaleza, the capital city of Ceará, has passed São Paulo to become the city with the highest number of cases per capita. Health Minister Luiz Henrique Mandetta said the government is still investigating why, but indicated that the state’s well-oiled health system allows for more testing, which may explain the rise in infections.
  • One study by the London School of Hygiene and Tropical Medicine suggests that the actual number of cases might be at least five times higher than those confirmed so far.

Why it matters. While some underreporting is expected, knowing the full extent of the spread is paramount for policy-making — especially in a country where containment measures have been the subject of so much political struggle.

  • According to Raquel Stucchi, a researcher at the University of Campinas, Brazil could allow itself to loosen quarantine measures if it had a better assessment of the virus’ behavior in the country.

Collapse ahead? Last week, Mr. Mandetta said the country’s healthcare system (both public and private) could collapse by the end of April. But official data also shows a sharp increase in the number of acute respiratory distress syndrome cases. The numbers don’t say how many are Covid-19 or the flu, but they show that should the virus continue to spread at its current pace, Brazil will begin running out of hospital beds sometime before the end of next month.

Cases of acute respiratory distress syndrome (ARDS)

severe acute respiratory syndrome cases
Source: InfoGripe

Trump forces hand to topple Venezuela’s Maduro

The U.S. government has officially accused Venezuelan President Nicolás Maduro of narcoterrorism, money laundering, and drug trafficking, placing a USD 15-million bounty for information leading to his capture and conviction. U.S. Attorney General William Barr said Mr. Maduro and former government officials have worked with Colombian guerillas, turning Venezuela into a hub for drug shipments to North America.

Why it matters. Since 2015, the Venezuelan economy has been collapsing. Mr. Trump’s move, coupled with the arrival of Covid-19 to Venezuela — which has only 73 critical care beds for over 28 million people — could seal the end for Mr. Maduro.

Yes, but … Toppling Nicolás Maduro has proven to be easier said than done. Since Mr. Trump became president, the U.S. increased sanctions on the country — and did almost everything short of an invasion. And still, thanks to support from Russia and China and his top military officers, Mr. Maduro has clung on to office.

  • As reporter Lucas Berti wrote on The Brazilian Report, “the only thing we know for sure right now is that Venezuela is not even close to being prepared for the Covid-19 pandemic, with or without Nicolás Maduro.”

What else you need to know today

  • Oil and gas. Petrobras CEO Roberto Castello Branco said the company is adapting itself to “survive in a world where the oil barrel costs USD 25 instead of USD 40.” He called the current crisis unprecedented and said the drop in oil prices affects the company’s divestments program. If prices remain at the current level, Petrobras will not move forward with the sale of its assets, as they will be too undervalued as a result. Nevertheless, he showed optimism by signs of recovery in the Chinese demand for oil — the Asian giant is the main destination of Petrobras’ exports.
  • Aviation. The International Air Transport Association (IATA) — which unites the world’s 300 largest carriers — estimates that Brazil’s air travel market will shrink by 40 percent in 2020. Companies are expected to lose USD 7.7 billion in revenue this year, which will spill over to other sectors of the economy. IATA criticized the lack of government support from Latin American countries, with the exception of Brazil, which postponed fees.
  • Rio. The city of Rio de Janeiro will allow the partial reopening of stores today. According to Mayor Marcelo Crivella, the goal is to allow people to buy basic goods — his decree greenlights food shops, gas stations, warehouses, convenience shops, and construction stores, among others. Mr. Crivella, who is up for re-election in October, has decided to attach his name to President Jair Bolsonaro — thus positioning himself against total isolation measures.
  • From Italy. A study published in the Journal of Travel Medicine suggests that the novel coronavirus didn’t get to Brazil from China — but rather from Italy. The researchers analyzed the spread of Covid-19 in countries with the highest number of cases by March 5, when community spread hadn’t been observed in Brazil, against the number of passengers flying from these countries to Brazil. Their model indicates that 55 percent of the first imported cases came directly from Italy — especially through the Milan-São Paulo route.
  • Stocks. For the third straight session, the São Paulo stock exchange had a positive day. The Ibovespa index closed up by 3.67 percent, increasing weekly gains to almost 16 percent. As reporter Natália Scalzaretto explained in yesterday’s Daily Briefing, there is little reason to believe that we’re seeing anything different than a “bear market rally,” when stocks go up in the short-term, but then resume their downward trend. The USD-BRL exchange rate closed below the BRL 5 mark for the first time since March 13, at BRL 4.996.
Our content is protected by copyright. Want to republish The Brazilian Report? Email us at contact@brazilian.report