An anti-globalist to the World Bank?

. Jun 19, 2020
Fired Education Minister given shot at World Bank job Abraham Weintraub landed on his feet and was offered a World Bank job. Photo: Marcelo Camargo/ABr

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We’re covering Jair Bolsonaro’s controversial pick for the World Bank. The accumulation of problems on the president’s plate. And how the pandemic scrapped a decade of growth in just three months.

Fired Education Minister given shot at World Bank job

After 14 turbulent months as head of the Education Ministry, economist Abraham Weintraub

is out of the Brazilian government. He leaves having little or nothing to show for in terms of policymaking, but with a laundry list of controversy —&nbsp;from suggesting Supreme Court justices are &#8220;bums&#8221; who should be &#8220;thrown in jail,&#8221; to accusations of racism, and multiple diplomatic gaffes. Amid a mounting political crisis, Mr. Weintraub became the administration’s latest sacrificial lamb.</p> <ul><li>Despised by the political establishment, Mr. Weintraub became a far-right folk hero of sorts. And to avoid problems within his base, President Jair Bolsonaro awarded the outspoken anti-globalist with a truly incredible &#8220;consolation prize&#8221; –– a role in the World Bank.</li></ul> <p><strong>Puzzling choice. </strong>Among other things, the World Bank promotes initiatives aiming at protecting the environment and minorities, as well as fostering trade and globalization — all of which Mr. Weintraub abhors.</p> <ul><li>It is also a job that requires negotiation skills — decidedly not Mr. Weintraub&#8217;s forte. He once started a Twitter brawl by calling a detractor&#8217;s mother a “<a href="">scabby toothless mare</a>.”&nbsp;</li><li>The former minister also lashed out at French President Emmanuel Macron, calling him an “opportunistic cretin” after Mr. Macron criticized the Brazilian government’s environmental stances.</li><li>Lastly, he published a <a href="">Sinophobic tweet</a> sparking outrage from the Chinese ambassador to Brasília.</li></ul> <p><strong>Why it matters.</strong> Naming a rogue actor to the World Bank will only worsen Brazil&#8217;s already tattered image internationally.</p> <p><strong>Legacy.</strong> Abraham Weintraub leaves the Education Minister without offering any solutions for what has been one of Brazil’s major development hurdles: <a href="">the lack of a skilled workforce</a>. His last act in the job was to revoke racial quotas in post-graduate courses —&nbsp;considered by many experts as an important policy to compensate for the massive income gap between whites and non-whites in Brazil.</p> <p><strong>By the way.</strong> This was Brazil&#8217;s fifth cabinet change since the coronavirus crisis started.</p> <hr class="wp-block-separator"/> <h2>A president under siege</h2> <p>The arrest of Fabrício Queiroz, a former advisor to the Bolsonaro family, worsened an already terrible political crisis. After around two years of investigations, prosecutors say Mr. Queiroz operated a criminal organization from within Flávio Bolsonaro&#8217;s office between 2007 and 2018 —&nbsp;when the president&#8217;s eldest son served as a Rio state lawmaker. The links between Mr. Queiroz and the Bolsonaros are many —&nbsp;editor Euan Marshall explains them in <a href="">more detail here</a>.</p> <p><strong>Why it matters.</strong> The confluence of crises is so big, complex, and unprecedented that it seems impossible to say which of the heads of this hydra is the most dangerous to the government.</p> <p><strong>Remember the crises.</strong> President Jair Bolsonaro faces: (1) a historic pandemic, with Covid-19 infections set to reach the 1-million mark today, (2) looming economic depression, (3) a possible indictment request for allegedly trying to tamper with the Federal Police, (4) two electoral probes which could unseat him <em>and </em>his vice president, (5) a Supreme Court investigation into a fake news ring that could affect his sons or cost him his job.</p> <ul><li>There are also a few dozen impeachment requests sitting on the House Speaker&#8217;s desk.&nbsp;</li></ul> <hr class="wp-block-separator"/> <h2>Brazilian GDP should fall to 2010 levels … at best</h2> <p>Projections for Brazil&#8217;s GDP results this year vary from a 6-percent drop — in the best-case scenario —&nbsp;to a 9.1-percent contraction in the case of a second global wave of the coronavirus spread. Regardless of the outcome, 2020 will see Brazil&#8217;s biggest fall in GDP on record.</p> <p><strong>Why it matters.</strong> Looking at Brazil&#8217;s infection and death curves — the country confirmed over 1,200 deaths on each of the past three days — the best-case scenario is getting less and less probable.</p> <ul><li>Even before the pandemic, GDP per capita was 7.4 percent lower than it was in 2013. It is as if Brazilians’ revenue has stalled since 2009—which inevitably raises inequality.</li><li>The country&#8217;s total income — including salaries, pensions, and other revenue — is expected to drop 11.5 percent.</li><li>Unemployment should reach <em>at least</em> 18 percent&nbsp;—&nbsp;which doesn&#8217;t even take into account the millions of people who will simply stop looking for jobs due to their scarcity.</li></ul> <p><strong>Lost decade.</strong> Even if Brazil grows over the next two years, the country should only recover its 2019 economic activity by the end of 2022.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/2900664" data-url=""><script src=""></script></div> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>2020 election.</strong> Covid-19 has made traditional meet-and-greet campaigns impossible&nbsp;and will accelerate the transition of the political arena <a href="">from town halls to social media</a> —&nbsp;WhatsApp Messenger, in particular. And that will make regulation on electoral ads nearly impossible, leaving voters more exposed to disinformation. We cover that on this week&#8217;s edition of the Explaining Brazil podcast. <a href="">Listen now</a>.</li><li><strong>WhatsApp.</strong> Just days before Facebook launched a <a href="">payment function on WhatsApp Messenger</a>, the Central Bank asked for <a href="">more information</a> about the initiative&#8217;s business model from all companies involved —&nbsp;besides Facebook and WhatsApp, the tool includes payments company Cielo, state-owned bank Banco do Brasil, fintech Nubank, and credit cooperative Sicredi. The Central Bank has said it will be &#8220;vigilant&#8221; with any closed payment system that &#8220;limits [the bank&#8217;s] objective to have a quick, safe, transparent, open, and affordable&#8221; system.</li><li><strong>Oil and gas.</strong> In a note to investors, Brazil&#8217;s state-controlled oil and gas giant Petrobras announced it plans to sell the remainder of its shares in oil distribution company BR Distribuidora. Back in July 2019, <a href="">Petrobras had reduced its stake</a> from 71 to 37 percent, making the company privately-controlled. The deal was considered a success, and Petrobras now wants out of the firm which runs 7,700 gas stations nationwide. This is part of the company&#8217;s divestment program, which aims to raise USD 30 billion by 2024 but was put on hold due to the pandemic.</li><li><strong>Banks.</strong> JPMorgan announced on Thursday evening that Daniel Darahem would be its new head in Brazil. A Brazilian, he has worked for over 20 years in the bank and was serving as head of equity capital management in the Asia-Pacific region since May 2017. He replaces José Berenguer, who left JPMorgan to become the head of the soon-to-be-operational XP Bank, owned by <a href="">brokerage XP Investimentos</a>.

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