Brazil’s next Supreme Court Justice?

. Oct 01, 2020
Supreme Court nominee Kássio Nunes Supreme Court nominee Kássio Nunes. Photo: TRF-1

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

Jair Bolsonaro’s Supreme Court dark horse. Brazil’s job market situation is a Rorschach test. And Brazil picking a fight with Joe Biden.

Bolsonaro zeroes in on Supreme Court pick

The government has leaked information that President Jair Bolsonaro intends to choose Federal Judge

Kássio Nunes, from the northeastern state of Piauí, for a spot on the Supreme Court. A seat will become vacant on October 13, when Justice Celso de Mello — the longest-tenured member in the court&#8217;s history — will retire. Mr. Nunes&#8217; name was completely off the radar, with reports suggesting he was not even considering campaigning for the job. Regardless, the potential pick sends some important signals:</p> <ul><li>Mr. Bolsonaro reportedly zeroed in on Kássio Nunes after a meeting with Supreme Court Justices Dias Toffoli and Gilmar Mendes, brokered by Senate President Davi Alcolumbre. By choosing someone who is well regarded in the field of law — and has political connections&nbsp;— the president appears to be extending an olive branch to Congress and the court, which has not pulled many punches in decisions affecting the government.</li></ul> <p><strong>What the president wants.</strong> There are two probes underway in the Supreme Court that could hurt the Bolsonaro family: an investigation into the organization of anti-democratic demonstrations, and the so-called Fake News probe. As Brasília correspondent Débora Álvares reports, the government has tried to negotiate some sort of deal with the court to spare members of the First Family from potential indictment.&nbsp;&nbsp;</p> <ul><li>Figures close to the president have approached Supreme Court justices with a proposal to hand over the people responsible for coordinating the government&#8217;s so-called &#8220;Office of Hate&#8221; — consisting of a group of aides who firehose falsehoods on social media and incite protests against democratic institutions, in an orchestrated effort operating within the president&#8217;s office. In exchange, two of the president&#8217;s sons who may face heat (Eduardo and Carlos Bolsonaro) would be spared. The president is also keen on shielding his eldest son, Senator Flávio Bolsonaro, recently accused of money laundering, embezzlement, and criminal association.</li><li>Mr. Bolsonaro&#8217;s aides were told that there is no deal on the table. And the president is apparently trying a less barefaced move to lower tensions with the Supreme Court.</li></ul> <p><strong>Yes, but … </strong>This administration has flip-flopped on multiple occasions, and senior officials left the door open for a U-turn, if necessary, saying the ink is not yet dry on Mr. Nunes&#8217; nomination.</p> <p><strong>On the outs. </strong>Chief Justice Luiz Fux was not happy about being left out of the meeting with the president, and reportedly said that a Supreme Court nominee should have a &#8220;thicker résumé.&#8221;</p> <p><strong>Legacy.</strong> Kássio Nunes is 47 and thus could stay in the court until 2047, when he would turn 75 and hit the age of mandatory retirement.</p> <hr class="wp-block-separator"/> <h2>Job market remains fragile in Brazil</h2> <p>The Economy Ministry announced on Wednesday that Brazil enjoyed an overall increase of 249,388 new formal jobs in August. This was the second straight month of positive results and the best result for August since 2010. More importantly, it was the first time since the pandemic started that services companies — the backbone of the Brazilian economy, accounting for 70 percent of Brazilian jobs — hired more people than they fired.</p> <p><strong>Yes, but … </strong>On the same day, the Brazilian Institute of Geography and Statistics showed a record-setting unemployment rate: 13.8 million people. As we <a href="">previously reported</a>, unemployment only accounts for those actively seeking work, meaning the rate is likely to rise as Brazilians leave self-confinement and start to look for jobs once more.&nbsp;</p> <ul><li>The number of people of working age outside of the workforce has consistently grown since March — and reached an all-time record of 23-percent growth in July.</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/3891156" data-url="" aria-label=""><script src=""></script></div> <p><strong>Recovery.</strong> Despite the fragility of the job market, the Brazilian economy is recovering faster than expected. S&amp;P revised its GDP growth projection for the country, from -7 to -5.8 percent in the year. The ratings agency cites three main factors for the swift bounceback: strong financial stimuli, relaxed social isolation rules, and a solid demand for basic products from China.</p> <ul><li>A few points deserve monitoring, however. The coronavirus emergency salary is set to end after December (and the government is struggling to come up with a substitute welfare plan), and the Bolsonaro administration has adopted an aggressive stance against China.</li></ul> <hr class="wp-block-separator"/> <h2>&#8220;What a shame, Mr. Biden&#8221;</h2> <p>Polls suggest former U.S. Vice President Joe Biden is favored to win against Donald Trump in the U.S. presidential election. Still, Jair Bolsonaro seems determined not to waste an opportunity to get into a feud with the Democratic nominee. The latest such case came after Tuesday&#8217;s presidential debate, when Mr. Biden said the U.S. should put pressure on Brazil to take action against deforestation —&nbsp;suggesting to offer USD 20 billion as compensation and impose &#8220;severe economic consequences&#8221; if Brazil refused.</p> <ul><li>In response, Mr. Bolsonaro ranted on social media, in a message his team translated into English: &#8220;Today, [Brazil&#8217;s] president no longer takes bribes or baseless threats. OUR SOVEREIGNTY IS NOT NEGOTIABLE (&#8230;) What a shame, Mr. John [<em>sic</em>] Biden! What a shame!&#8221;&nbsp;</li><li>Environment Minister Ricardo Salles issued a sarcastic retort to Mr. Biden&#8217;s idea to offer Brazil USD 20 billion to end deforestation.&nbsp;</li></ul> <p><strong>Why it matters.</strong> Under Mr. Bolsonaro, Brazil has been less of an ally of the U.S., and more strictly speaking an ally of President Donald Trump. If polls are correct and Mr. Trump is unseated, the Brazilian president&#8217;s demeanor could harm Brazil&#8217;s relations with its second-biggest trading partner — and most powerful nation in the world.</p> <p><strong>Remember this.</strong> Last year, our Explaining Brazil podcast interviewed Harvard professor Stephen M. Walt, who believes that it is only a matter of time until major powers try to stop Amazon deforestation &#8220;<a href="">by any means necessary</a>.&#8221; That could include, in a not-so-distant future, economic sanctions or even military operations.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Stock market. </strong>The Ibovespa stock market index slipped nearly 5 percent in September, due to international turmoil and uncertainties around President Jair Bolsonaro&#8217;s commitment to the federal spending cap. Real estate firms, financial institutions, and small caps posted the <a href="">biggest losses</a> during the month. Only two indexes rounded off September in the black: basic materials and real estate funds.</li><li><strong>Coronavirus.</strong> Brazil posted more than 1,000 Covid-19 deaths in a single day for the first time in two weeks — bringing the total death toll up to 144,000. </li><li><strong>Human rights.</strong> According to a <a href="">report</a> by the Indigenous Missionary Council, violence against indigenous groups in Brazil more than doubled since Jair Bolsonaro rose to power. In 2019, there were 276 cases of violence against members of native communities — against 110 in the year before. The report claims &#8220;the violence is based on a government project that aims to <a href="">make indigenous lands available</a> for agriculture, mining, and logging.&#8221;</li><li><strong>Banking.</strong> State-controlled bank Banco do Brasil has reached a deal with Swiss bank UBS to join forces and create a new investment bank and brokerage firm. This novel institution will be controlled by UBS — which will hold 50.01 percent of voting stock — and operate in Brazil, Argentina, Chile, Paraguay, Peru, and Uruguay, according to a <a href="">financial statement</a> issued to Brazil&#8217;s Securities Commission. UBS was one of the banks exposed by the recent <a href="">FinCen Files scandal</a>, a transnational journalistic investigation revealing the role of global banks in industrial-scale money laundering schemes.</li><li><strong>Fintech.</strong> Nubank is launching operations in Colombia, after expanding to Argentina in 2019 and Mexico earlier this year. Initially, Nubank will only offer credit card services — which accounts for over 20 percent of all payments in Colombia — but it will eventually roll out its digital bank. With its no-fee model, Nubank hopes to gain popularity in a market where the top 5 banks control over <a href="">80 percent of total assets</a>.</li><li><strong>Business.</strong> Coca-Cola is moving its Latin American headquarters from Argentina to Brazil. The beverage company is the latest major corporation to leave the southern country, which has been in recession since 2018. According to new data, 11.6 million people in Argentina are <a href="">below the poverty line</a> — that is, 41 percent of the total population.

Read the full story NOW!

Our content is protected by copyright. Want to republish The Brazilian Report? Email us at