From Port-au-Prince to Jair Bolsonaro’s cabinet

. Dec 01, 2018

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In this week’s issue: The most important facts of the week. Brazil’s economy recovering steadily (but slowly). From Haiti to Bolsonaro’s cabinet.

The week in review

  • Fraud. As we reported on Oct.10, future economic tsar Paulo Guedes is suspected of having benefited from fraudulent operations in pension funds controlled by executives connected to the Workers’ Party and President Michel Temer’s party, the Brazilian Democratic Movement. The Federal Police has now formally placed him under investigation.
  • G20. During the G20 Summit in Buenos Aires, French President Emmanuel Macron conditioned the EU-Mercosur deal to Brazil’s acceptance of the Paris Accords on climate change. President-elect Jair Bolsonaro, who didn’t attend the summit, lashed back, saying Mr. Macron is using an excuse not to sign a deal that will bring competition to French agro producers.
  •  Reforms. Members of the government’s future economic team are starting to realize that, in order to pass deep reforms, it takes more than will and ideas. And they have started to make compromises. Future Tax and Pensions Secretary Marcos Cintra says he’s willing to give up on the idea of a single tax on goods (which displeases governors who raise money through a multitude of tariffs) in order to pass a much-needed pension reform.
    </li> <li><strong>Corruption.</strong><strong> </strong>Federal marshals arrested Rio de Janeiro Governor Luiz Fernando Pezão on Thursday morning. He is accused of having received monthly kickbacks for over a decade. In a statement to the Feds upon his arrest, Pezão attributed the corrupt practices to former governor Sérgio Cabral (in prison since 2016), under whom Pezão served as lieutenant governor.</li> <li><strong>Credit cards.</strong><strong> </strong>The Central Bank announced that customers of Brazilian banks who make credit card purchases abroad will no longer pay the exchange rate from the date their bills are due, but rather on the date of the purchase. That gives more predictability to customers.</li> <li><strong>Stock exchange.</strong><strong> </strong>On Thursday, the São Paulo Stock Exchange reached its highest nominal peak in history: 89,709.56 points. However, that mark remains 33% lower than May 20, 2008, after discounting inflation. This means the real value of companies listed in São Paulo is now much lower than what it was 10 years ago. While <a href="" target="_blank" rel="noopener noreferrer">Brazil initially dodged the 2008 financial crisis</a>, the country is still struggling to claw its way back from the country’s worst recession on record (more below).<img class="alignnone size-large wp-image-14015" src="" alt="" width="1024" height="576" /></li> </ul> <hr /> <h2>Brazil&#8217;s economy recovering steadily (but slowly)</h2> <p>For the past seven quarters, Brazil&#8217;s GDP has grown. While that&#8217;s obviously positive news, this growth comes after its worst recession on record. And the slow recovery has not been able to even out the losses caused by the crisis. The Brazilian economy is currently 5% smaller than it was in early 2014. The agricultural sector—which exports a lot, and thus depends less on the internal economy—is the only that has grown since 2014.</p> <hr /> <p><img class="aligncenter size-full wp-image-16886" src="" alt="" width="1200" height="800" srcset=" 1200w, 300w, 768w, 1024w, 610w" sizes="(max-width: 1200px) 100vw, 1200px" /></p> <p>&nbsp;</p> <hr /> <h2>The evolution of wealth and life expectancy in Brazil</h2> <p>In case you missed our post on <strong>The Brazilian Report</strong> website, we bring you an animated chart showing how each Brazilian state has evolved in terms of life expectancy and GDP per capita in the 21st century. Each sphere represents a state; each color, a region.</p> <p><img class="aligncenter size-full wp-image-16885" src="" alt="" width="600" height="338" /><img class="alignnone size-full wp-image-14017" src="" alt="" width="600" height="338" /></p> <hr /> <h2>From Port-au-Prince to Jair Bolsonaro&#8217;s cabinet</h2> <p>President-elect Jair Bolsonaro has named, so far, six cabinet members with a military background. Four of them were part of the Brazil-led United Nations Stabilization Mission in Haiti (<a href="">MINUSTAH</a>), which lasted between 2004 and 2017. It was Brazil&#8217;s biggest and most ambitious military action since the country sent its <em>pracinhas</em> officers to fight in Italy during World War II. They are:</p> <ul> <li><img class="alignnone size-full wp-image-14018" src="" alt="" width="640" height="399" />General Augusto Heleno (pictured): Commander between 2004 and 2005, he will be the chief security officer for the president.</li> <li>General Fernando Azevedo e Silva: Chief of Operations for the Brazilian troops, also between 2004 and 2005. Will be Brazil&#8217;s Minister of Defense.</li> <li>General Carlos A. dos Santos Cruz: Commander between 2006 and 2009 in Haiti, and of UN forces in Congo between 2013 and 2015, will be the liaison between the president&#8217;s office and Congress.</li> <li>Captain Tarcísio Gomes de Freitas: Chief of Brazil&#8217;s Engineering Company in Haiti, between 2005 and 2006, will be Brazil&#8217;s Minister of Infrastructure.</li> </ul> <p>According to Ricardo Seitenfus, a Ph.D. in international relations and special representative of the Organization of American States (OAS) in Haiti between 2009 and 2011, the experienced in the ravaged Caribbean country has made these military men more suited for government roles. &#8220;There they had the chance to take part in the political game. But the challenges now will be greater,&#8221; he said in an interview.</p> <h4>Death toll</h4> <p>In Haiti, the Brazilian military generals oversaw actions more connected to policing. General Heleno, in particular, headed the MINUSTAH during a time where missions had a great volume of fire and deaths.</p> <p>In 2005, he led Operation Iron Fist, a raid into the Port-au-Prince slum Cité Soleil, targeting a warlord known as Dread Wilme. After a 7-hour gun battle, the peacekeeping troops fired over 22,000 bullets, with dozens of people killed, including Dread Wilme. General Heleno considered the raid a success. Human rights groups called it a &#8220;massacre.&#8221;</p> <p>Jair Bolsonaro reportedly trusts General Heleno to draw plans to tame Brazil&#8217;s favelas with the methods it used in Haiti. Recently, the general has supported a crime-fighting strategy proposed by Rio de Janeiro governor-elect Wilson Witzel. That plan would put snipers in helicopters to take out criminals.

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