Bolsonaro gives up on international popularity

had a different tone from his 2019 address. One year ago, the Brazilian leader positioned himself in defiance to what his supporters call the &#8220;globalist order.&#8221; This time around, Mr. Bolsonaro seemed much more defensive and interested in addressing some of the world&#8217;s concerns around Brazil. But once again, his words seemed more targeted at his own supporters rather than an international audience.</p> <p><strong>Why it matters.</strong> In the words of Lucas Leite, a Ph.D. in international relations and a professor at the São Paulo-based Fundação Armando Álvares Penteado, it is as if Mr. Bolsonaro has given up on cultivating a positive image worldwide — instead using major international stages to talk to his own supporters. &#8220;At this point, only a radical shift in the government&#8217;s environmental policy would cast him in a better light — and that is unlikely to happen. The president&#8217;s bad reputation seems beyond repair,&#8221; he says.</p> <p><strong>No blame. </strong>As <strong>The Brazilian Report&#8217;s</strong> Débora Álvares <a href="https://brazilian.report/newsletters/brazil-daily/2020/09/16/what-bolsonaro-plans-to-say-to-the-united-nations-next-week/">revealed last week</a>, Mr. Bolsonaro used the address to try and deflect responsibility for Brazil&#8217;s environmental crisis and the coronavirus pandemic. <a href="https://brazilian.report/power/2020/09/22/jair-bolsonaro-misinformed-speech-to-the-united-nations/">Click here for a breakdown of the key points in Mr. Bolsonaro&#8217;s speech</a>.</p> <p><strong>Trump and the U.S.</strong> Mr. Bolsonaro made one noteworthy comment — once again positioning Brazil as an automatic ally of the U.S. in its continued tensions with China. In what could only be interpreted as a jab at Beijing, he said Brazil is open to the development of flagship technology, including 5G, with “any partner that respects our sovereignty, and cherishes freedom and data protection.”</p> <ul><li>To Mr. Bolsonaro&#8217;s point, there are increasing concerns that Chinese businesses may serve as Trojan horses for the Chinese Communist Party. Especially after a <a href="http://www.gov.cn/zhengce/2020-09/15/content_5543685.htm?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axioschina&amp;stream=china">September 15 memo</a> by the CCP&#8217;s top decision-making body called for closer ties between private Chinese firms and the United Front Work Department — the CCP&#8217;s bureau charged with extending its influence across society.</li><li>Still, there is a time and a place for these comments. Mr. Bolsonaro&#8217;s words sparked a reaction Chinese diplomats in Brazil. &#8220;We hope [Brazil&#8217;s 5G auction] will have objective, transparent, and non-discriminatory rules, respecting basic norms of the world economic system,&#8221; said Qu Yuhui, a counselor at the Chinese Embassy in Brasília.</li></ul> <p><strong>EU.</strong> At no point did Mr. Bolsonaro extend an olive branch to the European Union countries that threatened to block a trade deal with Mercosur, citing environmental concerns. Instead, the president said Brazil is the &#8220;victim of a most brutal disinformation campaign&#8221; orchestrated by &#8220;shady interests coupled with exploitative and unpatriotic Brazilian associations.&#8221;</p> <ul><li>Then, in an act of defiance, Brazil&#8217;s Foreign Affairs Ministry released a statement saying that the non-ratification of the Mercosur-EU deal would &#8220;further aggravate environmental problems in the [Amazon] region.&#8221;</li></ul> <iframe src="https://open.spotify.com/embed-podcast/episode/5ucyaP41yF0vnlnvRfrlTW" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> <hr class="wp-block-separator"/> <h2>Industrial confidence to surpass pre-pandemic levels</h2> <p>Many industrial sectors have recovered their optimism toward the Brazilian economy, according to a preliminary study by the Brazilian Institute of Economics at Fundação Getulio Vargas (IBRE-FGV).&nbsp;</p> <ul><li>Industries were the worst-affected businesses by the pandemic in Brazil, with an overall drop of 12.3 percent in Q2 2020 alone. In June, idleness was at a historic high of over 40 percent.</li></ul> <p><strong>Why it matters.</strong> &#8220;This optimism signals that productive sectors may ramp up production,&#8221; <a href="https://portalibre.fgv.br/sites/default/files/2020-09/sondagem-da-industria-fgv_press-release_previa_set20_1.pdf">writes</a> economist Renata Mello Franco.</p> <p><strong>Expectations.</strong> Since social isolation measures began being lifted, industrialists regained confidence in their short-term future. In 16 out of 19 surveyed sectors, there was a reduction in idleness and an improvement in stock levels.</p> <hr class="wp-block-separator"/> <h2>Supreme Court&#8217;s indecision harms Petrobras</h2> <p>Supreme Court Chief Justice Luiz Fux suspended an online trial about whether or not state-controlled oil giant Petrobras can slice up its assets into multiple subsidiaries with the goal of speeding up their privatization. A verdict shall be reached during an in-person trial instead, which has no date of yet.</p> <ul><li>A 2019 Supreme Court ruling established that the government cannot privatize public parent companies without a green light from Congress. However, it is free to sell off subsidiaries. Senate President Davi Alcolumbre has <a href="https://brazilian.report/newsletters/brazil-daily/2020/07/03/brazil-to-have-first-5g-network-before-delayed-auction/">accused the government</a> of using this decision as a way to circumvent Congress in its intent of privatizing &#8220;Petrobras&#8217; strategic assets.&#8221;</li></ul> <p><strong>Why it matters.</strong> &#8220;A suspension in the sale of Petrobras refineries could delay the company&#8217;s deleveraging plan,&#8221; read a Goldman Sachs report to clients.</p> <p><strong>The trial.</strong> Three of 11 justices have voted not to give Petrobras the right to surreptitiously privatize its assets. Still, brokerage firm XP expects the vote to go in the company&#8217;s favor —&nbsp;forecasting that the court will continue holding a more lenient position toward privatizations.</p> <p><strong>Bidding.</strong> Even with a favorable Supreme Court decision, the company said it could hold onto its assets if offers are not attractive enough. On Monday, Petrobras said it would open another round of bidding for a refinery in the state of Paraná, after considering the presented binding offers were too similar in value.&nbsp;</p> <p><strong>Market.</strong> Over the course of the year, Petrobras shares have lost 32 percent in value.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Environment. </strong>The Justice Ministry will send national troops to help put out wildfires in the Pantanal wetlands. Around <a href="https://brazilian.report/newsletters/brazil-weekly/2020/09/21/rains-reach-brazil-pantanal-wetlands-but-damage-is-done/">19 percent of the biome has been destroyed</a> this year alone, as a result of an increasing number of criminal fires combined with a <a href="https://brazilian.report/environment/2020/07/28/brazil-pantanal-wetland-in-flames-during-harsh-drought/">severe drought</a>. The Paraguay River, one of the largest in South America, is at worrisomely low levels, as rainfall has dropped 40 percent from the average of the past two years.</li><li><strong>Voting. </strong>The Superior Electoral Court will test a vote-by-app system in this year&#8217;s November 15 election. While it will only be a mock vote —&nbsp;with fake candidates and parties —&nbsp;the trial will mark the start of a process to allow voters, in the future, to cast their ballots from home on their smartphones. Trials are set to be held in three municipalities, including São Paulo.&nbsp;</li><li><strong>Cannabidiols.</strong> A group of 29 senators have requested the government include <a href="https://brazilian.report/business/2019/12/04/cannabis-investments-blazing-in-brazil/">cannabis-based medicines</a> in the public healthcare system&#8217;s list of available treatments. Medicinal cannabinoids have been cleared by health regulators but are still very expensive in Brazil — this decision would make them more affordable. On Tuesday, however, President Jair Bolsonaro signalled he would be against such a move: &#8220;In my administration there will be no clearance for drugs. Agribusiness does not include marijuana,&#8221; he told supporters.</li><li><strong>Argentina.</strong> According to Argentina&#8217;s official statistics agency, Indec, the country&#8217;s Q2 2020 GDP showed a 16.2-percent drop from the first quarter. Still, the numbers were slightly better than analysts&#8217; forecasts. Compared to the same period in 2019, the Argentinian economy shrank 19.1 percent —&nbsp;falling deeper than during the <a href="https://brazilian.report/latin-america/2020/05/25/argentinas-long-debt-default-history-imf/">major 2002 crisis</a> —&nbsp;as the country imposed strict lockdown measures in mid-March. While some restrictions have been lifted since, many are still in place.</li><li><strong>Impeachment. </strong>The Rio de Janeiro State Congress votes today on whether to begin an <a href="https://brazilian.report/podcast/2020/09/09/explaining-brazil-podcast-rio-de-janeiros-descent-into-hell/">impeachment trial against Governor Wilson Witzel</a>, accused of embezzling funds originally earmarked for the anti-coronavirus effort. It would take 47 out of 70 votes for the request to pass —&nbsp;which is highly probable, given that all impeachment-related votes have gone unanimously against Mr. Witzel until this point. If impeachment is approved, a committee of five lawmakers and five state judges will have 120 days to determine whether or not the governor is guilty of the accusations.