Brazil’s Communications Ministry snubbing Huawei in 5G talks?

. Aug 06, 2020
Brazil's Communications Ministry snubbing Huawei in 5G talks? Photo: RafaPress/Shutterstock

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We’re covering talks between Brazil’s government and some (but not all) 5G suppliers. The new benchmark interest rate in the country. And the day Bolsonaro reportedly nearly staged a coup.

Breaking

Operation Car Wash has arrested São Paulo State Transport Secretary Alexandre Baldy. The investigation targets fraudulent schemes in healthcare contracts signed during Mr. Baldy’s tenure as Brazil’s Minister of Cities. Federal Judge Marcelo Bretas, who oversees the anti-corruption probe in Rio de Janeiro, issued a total of six arrest warrants to be carried out in four states.


5G: Brazil meets with Nokia, Ericsson … but not Huawei

Communications Minister Fábio Faria

— who took office in June — began a round of meetings on Wednesday with representatives from the major telecom companies in the race for 5G technology in the country. He met with Finnish firm Nokia and Sweden&#8217;s Ericsson — but did not schedule any talks with Chinese telecom giant Huawei. </p> <p><strong>Why it matters.</strong> Brazil plans to auction 5G frequencies next year — and the technology has become one of the many battlegrounds in the Cold War-style feud between the U.S. and China.</p> <p><strong>Pressure.</strong> Just last week, the U.S. Ambassador in Brasília Todd Chapman said that <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/30/5g-united-states-big-stick-diplomacy-brazil-ban-huawei/">not banning Huawei could lead to &#8220;consequences&#8221; for Brazil</a>.</p> <ul><li>The Donald Trump White House claims Huawei represents a data security liability, as it could install backdoors in the technology that would give the Chinese government access to sensitive government information for undue purposes. The U.S. — and many other governments — have banned Huawei from their 5G grids.</li></ul> <div class="flourish-embed flourish-map" data-src="visualisation/3335585" data-url="https://flo.uri.sh/visualisation/3335585/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>5G threats. </strong>Security experts do view all Chinese-owned tech businesses as vulnerable to interference from Beijing. But it is also fair to point out that, less than a decade ago, it was revealed that the U.S. National Security Agency spied on Brazil&#8217;s state-controlled oil company Petrobras and former President Dilma Rousseff.</p> <ul><li>Plus, as Axios&#8217; Scott Rosenberg <a href="https://www.axios.com/tiktok-crackdown-us-playing-by-chinas-internet-rules-379bf293-fd24-44af-93af-319c850f6500.html">reports</a>, &#8220;U.S. President Donald Trump&#8217;s crackdown on TikTok suggests that the U.S. government is starting to see the internet more like China does — as a network that countries can and should control within their borders.&#8221;</li></ul> <p><strong>Bottom line.</strong> Communications Minister Fábio Faria said that the decision on which players will be allowed to compete for Brazil&#8217;s 5G spectrum will be made by President Jair Bolsonaro — and he alone. Meanwhile, on Monday, Vice President Hamilton Mourão said he does not fear pressure from the U.S.</p> <hr class="wp-block-separator"/> <h2>Could Brazil cut interest rates even further? Experts disagree</h2> <p>The Central Bank&#8217;s Monetary Policy Committee decided on Wednesday to promote the ninth consecutive cut to Brazil&#8217;s Selic benchmark interest rate: from 2.25 to 2 percent a year, in line with markets&#8217; expectations. However, it remains unclear whether or not the cuts will continue, or if the rate will remain at its current level for longer.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/2887304" data-url="https://flo.uri.sh/visualisation/2887304/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Why it matters.</strong> The Selic rate is the Central Bank&#8217;s main instrument of monetary policy, used to boost or discourage consumption. In the pandemic world, the benchmark interest rate has seen more aggressive cuts in a bit to offset the economic effects of the Covid-19 crisis.</p> <p><strong>What they are saying.</strong> The bank did leave an opening for future cuts, though in a much more ambiguous manner. &#8220;The committee believes that the current economic conditions continue to recommend an unusually strong monetary stimulus but it recognizes that, due to prudential and financial stability reasons, the remaining space for monetary policy stimulus, if it exists, should be small,&#8221; read the meeting&#8217;s minutes.</p> <p><strong>Outlook.</strong> The Monetary Policy Committee meets again in September — and should hold the Selic rate at 2 percent. But, depending on how the recovery evolves, another cut could happen in October.</p> <hr class="wp-block-separator"/> <h2>Magazine: Bolsonaro came close to staging a coup</h2> <p>A <a href="https://piaui.folha.uol.com.br/materia/vou-intervir/">report</a> by monthly magazine Piauí created discomfort in Brasília. Entitled &#8220;I will intervene! The day [Jair] Bolsonaro decided to send troops to the Supreme [Court],&#8221; the text describes a May 22 meeting in which the president was enraged by the possibility of the court seizing his cell phone as evidence. At that point, the Federal Prosecution Office had kicked off an investigation on whether Mr. Bolsonaro had tried to illegally interfere with the Federal Police, following accusations of former Justice Minister Sergio Moro.</p> <p><strong>What happened, according to the magazine.</strong> The report says Mr. Bolsonaro warned his closest advisers — all former military men — that he was about to send troops to the Supreme Court and vacate all 11 seats. The Justice Minister and the Solicitor General were consulted to weigh in on how to <a href="https://brazilian.report/power/2020/06/02/brazil-far-right-has-created-a-legal-way-to-stage-a-coup-bolsonaro/">give the coup airs of legality</a>.</p> <ul><li>Mr. Bolsonaro was then talked down, with his chief security officer Augusto Heleno reportedly saying &#8220;it was not the time,&#8221; and proposing instead a threatening open letter, saying that the Supreme Court was pushing towards &#8220;unpredictable consequences.&#8221;</li></ul> <p><strong>What they are saying.</strong> Mr. Heleno told <strong>The Brazilian Report</strong> he wouldn&#8217;t comment on the report &#8220;as it is a piece of fiction.&#8221; The government&#8217;s Secretary General&#8217;s Office called it &#8220;an unreal narrative.&#8221; No Supreme Court justice wanted to comment on the story.</p> <p><strong>What to make of it?</strong> The report casts the government under a bad light, showing them as ill-suited men who might just be waiting for an opportunity to stage a coup d&#8217;état. That, in itself, is not exactly surprising&nbsp;— considering the president&#8217;s track record as a politician.</p> <ul><li>This report comes as the Supreme Court has its <a href="https://brazilian.report/newsletters/brazil-weekly/2020/08/03/high-profile-cases-on-the-brazilian-supreme-court-docket/">docket filled with trials that have the potential to trigger several crises for the government</a>, directly concerning President Jair Bolsonaro, his family, and his allies. &#8220;Now, any backtracking from the court will be seen as a sign of cowardice. Whoever leaked the meeting now left no option to the justices other than to charge at the government,&#8221; says political scientist Carlos Melo.</li></ul> <p><strong>What to expect.</strong> The <a href="https://brazilian.report/power/2020/06/23/jair-bolsonaro-possible-hangman-supreme-court/">constant state of tension and distrust</a> between the three branches of government will continue. Amid a deadly pandemic and a massive economic crisis looming, it is certainly a recipe for disaster.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Vaccine.</strong> This week, five research centers will kick off trials of the CoronaVac, a potential Covid-19 vaccine by Chinese lab Sinovac Biotech. This week&#8217;s Explaining Brazil Podcast explains where Brazil stands in the queue for a vaccine. <a href="https://brazilian.report/podcast/2020/08/05/brazil-place-in-the-race-for-a-covid-19-vaccine-podcast/">Listen now</a>. </li><li><strong>Reopening.</strong> Starting today, the state of São Paulo will allow bars and restaurants to open until 10 pm in cities where the coronavirus situation is less severe. Until now, they were allowed to open until 4 pm, but many establishments remained closed due to these restrictive hours, which made them lose less money than if they had opened.</li><li><strong>Indigenous. </strong>The Supreme Court unanimously confirmed a previous decision that forces the Jair Bolsonaro administration to protect indigenous groups from the Covid-19 pandemic. Justice Luís Roberto Barroso had issued an injunction determining the creation of sanitary barriers around isolated communities and the creation of a plan to remove trespassers. Officially, 623 native Brazilians have died of Covid-19, but <a href="https://brazilian.report/society/2020/06/14/coronavirus-accelerating-genocide-brazil-indigenous-people/">anthropologists say the real numbers are much higher</a>.</li><li><strong>Bolsa Família.</strong> Also unanimously, the Supreme Court ruled that the federal government is not allowed to promote cuts to the cash-transfer program Bolsa Família during the pandemic. The decision comes after governors in the Northeast region complained about the Bolsonaro administration having suspended 158,000 beneficiaries, with 61 percent of them coming from the Northeast, Brazil&#8217;s poorest area.</li><li><strong>Intelligence.</strong> The Brazilian Socialist Party and environmentalist party Rede filed a lawsuit at the Supreme Court to nullify Jair Bolsonaro&#8217;s decree reshaping the Brazilian Intelligence Agency. Signed on Friday — and <a href="https://brazilian.report/power/2020/08/01/is-bolsonaro-launching-his-own-private-intelligence-agency/">broken down on <strong>The Brazilian Report</strong> on Saturday</a>, before the Brazilian media had picked it up — the decree tweaks the agency’s jurisdiction at three points, sufficiently broad enough to be dangerous if wielded by the wrong hands. And the parties claim that allowing President Bolsonaro to have this power is dangerous.</li><li><strong>Elections.</strong> Only a couple of weeks ago, Former Health Minister Luiz Henrique Mandetta started throwing his name in the hat as a <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/23/brazil-central-bank-optimism-recovery-telecom-amazon/">possible presidential candidate in 2022</a>. But he appears to be getting a reality check from his own party — which wants him to run for mayor of his hometown Campo Grande (the capital city of Mato Grosso do Sul) in November of this year. Mr. Mandetta is reportedly weighing up whether running for mayor (and winning) will be more helpful or harmful to his future ambitions.</li><li><strong>Blazes.</strong> A raging fire described as &#8220;<a href="https://twitter.com/LicNutMeri/status/1287606844882587649?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1287606844882587649%7Ctwgr%5E&amp;ref_url=https%3A%2F%2Fwww.theguardian.com%2Fenvironment%2F2020%2Fjul%2F30%2Fargentina-delta-fires-rage-out-of-control-parana-river">completely out of control</a>&#8221; is destroying one of South America&#8217;s biggest wetlands — the Paraná river delta in Argentina. Local press reports that the central city of Rosario was &#8220;almost surrounded by fire and smoke.&#8221; The fires are reportedly intentional, used to clear land for pastures, as is seen regularly in the Brazilian Amazon. According to Greenpeace, &#8220;once a fire reaches that scale, it becomes virtually impossible to stop.&#8221;

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