Bolsonaro threatens to ‘name names’ of countries buying illegal timber

. Nov 18, 2020
timber deforestation Illegal timber shipment busted by Federal Marshals. Photo: PF

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Today, Bolsonaro’s new tactic on deforestation. Embraer’s new plane deals. The signs of a second wave. And the state of play in runoff elections.

Bolsonaro wants to share blame for Amazon deforestation

After becoming an international pariah his government’s hands-off approach to deforestation in Brazil,

President Jair Bolsonaro used the 2020 BRICS Summit yesterday to share the blame around. He promised that within the next few days, he will reveal which countries are importing illegal timber from the Amazon rainforest. &#8220;Some of these countries are the most severe critics of my administration regarding this <a href="">deforestation issue</a>,&#8221; said the president during his remarks.</p> <ul><li>The president made reference to a method developed by the Brazilian Federal Police to track timber by using stable isotope analysis. While the president has yet to name any country, a 2017 operation seized 120 containers with 2,400 square meters of illegal timber being sent to Belgium, Denmark, Italy, the Netherlands, Portugal, the United Kingdom, Germany, and France. The latter two — France in particular —&nbsp;have been harsh critics of Mr. Bolsonaro&#8217;s environmental policies (or lack thereof).</li><li>The Bolsonaro administration made illegal exports easier by lifting documentation requirements for exporters. Still, data from NGO Imazon shows that only 20 percent of all the illegal timber extracted from the rainforest is shipped overseas.&nbsp;</li></ul> <p><strong>Why it matters.</strong> The stunt may have little to no effect on deflecting international criticism, but it could be highly effective with its true target audience: Brazilian voters. By spreading the blame around, Mr. Bolsonaro hopes to convince the electorate that international pressure on deforestation is a simple game of interests designed to hurt the country.</p> <p><strong>Deforestation trigger.</strong> Mr. Bolsonaro&#8217;s choice to go on attack mode will make relations between Brazil and European countries even tenser. If the president goes ahead and publicly names countries, it would force a response from these governments — which could lead to an unprecedented diplomatic crisis, as two active diplomats told Brasília correspondent Renato Alves.</p> <ul><li>Harvard professor Stephen M. Walt believes that it is only a matter of time until major powers try to stop Amazon deforestation by any means necessary. That could include, in a not-so-distant future, <a href="">economic sanctions or even military operations</a>.</li><li>Timber companies were unhappy with the president&#8217;s remarks — as they believe legal exporters could face a backlash with additional restrictions on their products.</li></ul> <p><strong>Distance. </strong>The episode is yet another sign of the <a href="">fractured relationship</a> between the head of state and Vice President Hamilton Mourão — who wanted Brazil to propose a cooperative effort with other countries.</p> <hr class="wp-block-separator"/> <h2>Embraer inks deal with Hungary</h2> <p>Brazilian planemaker Embraer has closed the sale of two <a href="">KC-390 military planes</a> to the Hungarian government. The deal was estimated at USD 300 million and deliveries will happen in 2023 and 2024. The KC-390 being sold to Hungary will be the first in the world with an option for installing an intensive care unit — which is essential for humanitarian missions.</p> <p><strong>Why it matters.</strong> Hungary is now the second NATO country to purchase military planes from Embraer after Portugal ordered five KC-390 units for EUR 827 million. Having a footprint among NATO members is key to making the aircraft a viable operation.</p> <ul><li>The deal also brings some much-needed cash inflow to the embattled company, which was hit hard by the coronavirus crisis. Commercial aviation deals were halted, a merger with Boeing fell through, and Embraer was forced to cut 12 percent of its workforce.</li></ul> <p><strong>The KC-390.</strong> Priced at around USD 87 million apiece, the KC-390 can transport up to 80 troops, three tanks, or one Black Hawk H-60 helicopter. It has been considered a state-of-the-art aircraft, set to “revolutionize military air transportation,” according to Charles Atkeison, of <a href="">Avgeekery Magazine</a>. It could make Embraer a top-notch competitor in a market dominated by American producers.</p> <p><strong>Talks.</strong> Embraer says two new KC-390 deals are in advanced talks — one in Europe and another in Asia.&nbsp;</p> <hr class="wp-block-separator"/> <h2>Evidence of incoming second wave continue to pile up</h2> <p>A group of infectious disease experts from São Paulo sent a letter to physicians warning about a &#8220;substantial rise in Covid-19 cases across the state.&#8221; Experts warn that now is the time for administrations to enforce new isolation measures to avoid a second wave as acute as what we are witnessing in Europe.</p> <ul><li>As summertime approaches, tourism is expected to go up, as is the number of people using beaches and public spaces. That could accelerate the spread even faster.</li></ul> <p><strong>By the numbers.</strong> According to the Imperial College London, Brazil&#8217;s transmission rate has once again increased, rising to 1.1 —&nbsp;meaning that each 100 infected people would pass the virus to another 110, who would pass it along to 121 more, and so on. Meanwhile, Covid-19 deaths are going up in 16 of Brazil&#8217;s 27 states.</p> <ul><li>The 7-day rolling average of new daily deaths is currently the highest in a month, while the average for new daily cases has risen 71 percent in two weeks.</li></ul> <div class="flourish-embed flourish-map" data-src="visualisation/4387542"><script src=""></script></div> <p><strong>Why it matters.</strong> After a deep economic crisis caused by the halting of the in-person economy in the first half of the year, support for lockdowns has waned. And without a massive popular buy-in, any lockdown is impossible to enforce in a country as expansive as Brazil.</p> <p><strong>Silver lining.</strong> One good piece of news, however, came from an <a href="">article</a> published by scientific magazine The Lancet, stating that the Chinese-made CoronaVac vaccine was effective in 97 percent of trial participants. The CoronaVac is in phase 3 trials in Brazil and the São Paulo government has already procured 46 million doses.</p> <hr class="wp-block-separator"/> <h2>Runoff election: is there space for upsets?</h2> <p>The first polls for the November 28 runoff election in São Paulo and Rio de Janeiro are out —&nbsp;and suggest the races could be over before they even started.&nbsp;</p> <div class="flourish-embed flourish-chart" data-src="visualisation/4387454"><script src=""></script></div> <ul><li>In São Paulo, incumbent Bruno Covas is polling at around 60 percent against left-wing activist Guilherme Boulos, who would need a 10-point swing to draw level.&nbsp;</li><li>In Rio de Janeiro former Mayor Eduardo Paes enjoys an even bigger lead, polling at 71 percent. That allowed him to skip the first debate against incumbent Marcelo Crivella, who is rejected by 57 percent of the city&#8217;s electorate.</li></ul> <p><strong>Bottom line. </strong>The Rio de Janeiro race is a lock, barring a massive unforeseen event. In São Paulo, Mr. Boulos could have a chance, thanks to his highly skilled communication team — though a win remains a longshot.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Power outages.</strong> The northern state of Amapá is dealing with more <a href="">power outages</a> since Tuesday, for the second time this month. Two weeks ago, all but two municipalities in the state were cut off from the national grid after a fire damaged a transmission plant, disrupting water supplies and communication services. The blackout led to protests and the postponement of the election in the state capital Macapá.</li><li><strong>Sanitation.</strong> A new legal framework for sanitation services was advertised by the government as a way to <a href="">kickstart the economy</a>, fostering BRL 700 billion (USD 131 billion) in new investments. The new rules passed in Congress back in June — but President Jair Bolsonaro imposed some vetoes on the legislation to make it more business-friendly, and Congress has yet to analyze them. Companies in the sector are lobbying for a quick resolution to clarify the legal situation — until then, investments will not happen. </li><li><strong>Congress. </strong>A poll among federal lawmakers shows that only 13 percent believe it will be possible for Congress to pass a <a href="">tax reform</a> before the end of the year. A lack of consensus among state governments, the federal administration, and Congress is cited as the main reason for skepticism, followed by a lack of time due to the complexity of the issue. </li><li><strong>Real estate. </strong>Earnings reports by Brazilian construction companies have excited investors. The top 14 companies in the sector have recorded combined profits of BRL 721 million (USD 135 million) in Q3 2020 — 56 percent higher than one year ago. With rising sales and project launches, companies have been bold in their forecasts for 2021-2022.</li><li><strong>Brumadinho.</strong> Minas Gerais Governor Romeu Zema <a href="">declared on Twitter</a> that his administration rejected a settlement proposal from mining giant Vale to close a lawsuit opened in the aftermath of the 2019 Brumadinho dam disaster, which killed 270 people. Mr. Zema said the amount proposed for reparations was not &#8220;fair enough&#8221; to the victims. While a figure is not decided upon, Vale will continue paying monthly aid to those affected by the disaster, at least until December.

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