Today, we take a look at Brazil’s first half of 2020 — as we hit the midpoint of what has been the coronavirus year. Think back to January 1. We were wondering if the Brazilian economy would finally get out of the slump this year. Now, we are bracing ourselves for what post-pandemic Brazil has in store.
Halftime in 2020: a recap of the year so far in Brazil
At the beginning of the year, we were discussing whether 2020 would finally be the year that Brazil enacted several important reforms — such as an overhaul of its tax system, and a public service reform, cutting back on the many perks federal public servants enjoy on the taxpayers’ money. We were even discussing if Economy Minister Paulo Guedes would be able to reshape Brazil’s federation. These conversations seem ludicrous now, after a first-half of 2020 dominated by a single subject: the coronavirus pandemic. Instead of passing landmark reforms, the Brazilian government is just trying to make it to next year with the country in one piece.
Coronavirus in Brazil. Despite being weeks behind other countries in the pandemic spread, Brazil botched its Covid-19 response at every step of the way. President Jair Bolsonaro didn’t take the virus seriously (he still hasn’t), and it took a lot of convincing to get Economy Minister Paulo Guedes to enact expensive counter-cyclical measures. As a result, millions couldn’t afford to stay home in self-isolation, and others didn’t think they had to. This has left Brazil in the worst of two worlds: the economy is tanking, like everywhere else, but the virus is still spreading.
- By the numbers: Brazil has confirmed 1.4 million infections and nearly 60,000 deaths. And the spread is actually accelerating, as most states reopened before reaching a peak.
Markets. The coronavirus made markets risk-averse and Brazil’s stock exchange took a major nosedive. Benchmark index Ibovespa started the year north of 118,000 points — and now sits at 95,000 points. Meanwhile, the Brazilian Real melted in 2020, being at one point the worst-performing currency in the world. A USD 1 : BRL 5 exchange rate seemed unthinkable months ago; now, it is normal, with each dollar being worth USD 5.46 today.
Economy. Prospects couldn’t be grimmer for Latin America’s leading economy, which is starting a job apocalypse in the face. For the first time, less than half of the active population is employed. Even precarious gig economy jobs are not easy to find. In three months, the pandemic scrapped 10 years of GDP per capita growth. The Brazilian economy is set to shrink by at least 6 percent in 2020 — with some forecasts pushing the downfall to around 10 percent.
- An even worse situation was avoided when the government, pressured by Congress, approved a BRL 600 (USD 110) emergency salary for informal workers and vulnerable populations, avoiding the fall of tens of millions of people below the poverty line. About 39 percent of Brazilian households benefited from the aid, jumping to 55 percent in the North and Northeast, the country’s poorest regions.
- But even this relief will not prevent Brazil from having what will essentially be a “lost generation.” That is, millions who will never achieve their full potential because they entered the job market at the wrong time.
Environment. The coronavirus pandemic has driven carbon emissions down around the world. Brazil, however, is an outlier — as 44 percent of the country’s emissions are linked to land deforestation. And the pandemic has not slowed down land-grabbing and the destruction of native forests in the slightest. Data from the National Institute of Space Research (Inpe) and its real-time deforestation detection system show that deforestation alerts in the Amazon increased 34 percent between January and May, compared to last year.
Elections. Brazilians are set to choose new mayors and city councilors in October, but the pandemic has upended the election. Congress is trying to postpone the vote — but rent-seeking parties are playing hardball. Moreover, the virus is forcing every campaign to be entirely web-based, which is likely to make voters more exposed to disinformation.
What to expect from the second half?
Brazil’s fate will depend on the evolution of the pandemic. In that sense, there is little reason for optimism. State governors, who at first acted as a barrier against the federal government’s anti-scientific line of thinking, are now surrendering to political convenience and reopening their economies against expert advice. Brasília Governor Ibaneis Rocha is a perfect example of this dynamic: he closed his constituency’s economy before a single case had been confirmed in the federal capital. Now, despite declaring a state of calamity, he says Covid-19 will be treated like a “regular flu.”
Slow burn. Meanwhile, President Jair Bolsonaro’s flippancy toward the pandemic has united most of the political establishment against his administration. Nevertheless, as no credible alternative has emerged, we should not see a push for a quick solution to the political problem. Instead, we shall witness a war of attrition, as opposing forces slowly wear each other down.
- His campaign will be tried by the Superior Electoral Court for alleged crimes during the 2018 election — which could unseat both him and his vice president, Hamilton Mourão.
- Also, the Supreme Court is turning the screw on Mr. Bolsonaro’s highest-profile supporters, accused of operating an illegal fake news ring. The probe threatens his second-eldest son, Carlos Bolsonaro, who is believed to operate the so-called “Office of Hate,” a coordinated group within the government tasked with destroying opponents on social media.
- Meanwhile, the president’s eldest son, Senator Flávio Bolsonaro, faces a money-laundering investigation.
What else you need to know today (besides the coronavirus)
- Fake news. The Senate approved a fake news bill on Tuesday that is deemed “highly problematic” by freedom of speech advocates. While senators struck down many of the draconian articles inserted by the bill’s rapporteur, Senator Angelo Coronel, some remained in place. Namely, the requirement for social media platforms store so-called ‘forwarding chains,’ a sort of flow chart that would allow law enforcement to trace the exact path of a piece of information shared at least five times. Also, in the case of a complaint against a user, platforms must demand proof of the suspected user’s identity. The bill now goes to the lower house.
- Cabinet. Before even being sworn in as Brazil’s new Education Minister, Carlos Alberto Decotelli resigned. His position became untenable after several entries in his résumé turned out to be false. He never got a Ph.D. in Argentina or conducted postdoctoral research in Germany, nor was he a professor at the prestigious Brazilian think tank Fundação Getulio Vargas — all of which appeared on his CV.
- Borders. The Brazilian government has prohibited the entry of foreign nationals in the country for an extended period of 30 days. There are some exceptions, such as foreign residents in Brazil and those with Brazilian family members. Meanwhile, Brazil was left out of the list of countries whose tourists are allowed to enter the European Union, as the bloc reopens its Schengen Area borders.
- Weather. With winds of up to 120 kilometers per hour, a cyclone caused damage in several cities in Southern Brazil — and killed at least four people. Over 1.4 million people were left without electricity in the country’s three southernmost states. The cyclone, however, is expected to impact São Paulo and Rio de Janeiro later this week. See images here.[/restricted]