Evaluating President Bolsonaro’s accomplishments

. Jul 27, 2019
jair bolsonaro accomplished

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Good morning! We bring you today the most important facts of the week in Brazil. Positive employment numbers. And what has President Bolsonaro been able to accomplish so far in his term. Enjoy your read!

The week in review

Jumpstart. The government announced a stimulus package to inject cash into the economy. Starting next month, workers will be able to withdraw money from their FGTS severance fund.

In order for the plan to be taken up by the largest number of people, without compromising the fund (which is also used to finance infrastructure projects), the Economy Ministry has limited withdrawals to only BRL 500. While that may not seem like much, 38% of Brazilians who are in default have debts amounting to less than that.</p> <p><strong>Hackers 1.</strong> The Federal Police arrested four people on Tuesday, accused of being responsible for hacking into the cell phones of around <a href="https://brazilian.report/power/2019/07/25/brazil-handle-cyber-security-issues/">1,000 Brazilian authorities</a>—including the president, the heads of both congressional houses, cabinet members, and Supreme Court justices. One of the suspects claimed to have been the source that fed <em>The Intercept</em> with private messages that had been exchanged by members of Operation Car Wash. The messages revealed a dangerous proximity between judges and prosecutors.</p> <p><strong>Hackers 2.</strong> In Brasília, politicians and Supreme Court justices have privately condemned how Justice Minister Sergio Moro has acted through the whole process. He is, at once, a victim of the hackers, the center of the compromising leaks, and the ultimate head of the Federal Police. The fact that he accessed a sealed investigation motivated severe criticism (not to mention the damning information already in the public domain. OAB, Brazil&#8217;s bar association, called Mr. Moro a &#8220;ringleader.&#8221;</p> <p><strong>Truckers.</strong> Disgruntled truck drivers threatened to call a strike this past week, after the government published a new minimum freight pricing table considered to be unfavorable to them. The Infrastructure Ministry backpedaled, suspending the introduction of the table until a consensus is found between autonomous drivers and transportation firms. Meanwhile, bureaucracy and a lack of competition hamper the development of alternative, waterborne transportation in Brazil.</p> <p><strong>Iranian ships.</strong> For weeks, two Iranian vessels were stuck near Brazil&#8217;s southern coast, with Petrobras refusing to sell them fuel, for fear that, by doing so, it would expose itself to U.S. sanctions against companies dealing with Iran. On Thursday, however, Supreme Court Chief Justice Dias Toffoli ordered Petrobras to supply fuel for both vessels, which are expected to head back to Iran this weekend. Earlier this week, the Middle-Eastern country had threatened to suspend—or even completely halt—imports from Brazil as a retaliation.</p> <p><strong>Pesticides.</strong> Brazil has adopted a new framework for evaluating risks related to pesticides in Brazil, adopting the Globally Harmonized System of Classification and Labelling of Chemicals (GHS), a standard managed by the UN. The change can push products currently labeled as &#8220;extremely toxic&#8221; to milder levels—including to &#8220;unlikely acute health hazard.&#8221;&nbsp; Anvisa has been questioned for continuing to allow the commercialization of glyphosate, a weed-killing chemical that has been linked to cancer cases. This year has seen the highest number of pesticides ever cleared for use: 262.</p> <p><strong>Deportation.</strong> The Justice Ministry issued a new ruling on Friday allowing the Brazilian government to deport foreign nationals on Brazilian soil who are suspected of crimes. Per the text, someone doesn&#8217;t even need to have been formally accused. Legal experts have called the move illegal, as deportation matters are not a jurisdiction exclusive to the ministry.&nbsp;<br></p> <p><strong>Employment data finally turns positive</strong></p> <p>Brazil saw the creation of 408,000 jobs, net, in the first half of this year. In June, there were 48,436 new jobs posted (net)—the best numbers for the month since 2013. While GDP growth projections have been severely cut down since the beginning of the year, hiring projections have seen a softer curve—confirming that the job market currently has a dynamic of its own. While economists celebrated the numbers, the slow pace of the recovery still provokes concern, as roughly 13m people are out of a job.</p> <div class="flourish-embed" data-src="visualisation/537192"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <h2>Markets</h2> <p>Petrobras shares (PETR3, PETR4) were among the worst-performing of Ibovespa this Friday, after the oil company announced slightly lower production guidance for 2019 (from 2.8 mn to 2.7 mn BOED), due to the closing of two platforms. Despite that, the pre-salt share of overall production is still increasing—which is in line with the company’s strategy of betting on deep-water exploration. For BTG Pactual, the operational data leave little room for surprise in the state-owned company’s earnings report, due on August 1st. The bank’s analysts reiterated Petrobras as a top pick, seeing in it “as a solid deleveraging story, underpinned by a still strong production growth potential, focus on its high-return E&amp;P business and further asset divestments.”&nbsp;</p> <p style="text-align:center"><strong><em>Natália Scalzaretto, TBR markets reporter</em></strong></p> <hr class="wp-block-separator"/> <figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/WSwx87CoITygi3D4kd7SI-eBzCRDZfXwzpxpBcgzeZLoV4YTP2hD4N81QRj_1MtV5r3vd_K3XdyAgTPyIYFTokl7GfjmwXzF6xsIDhTD-k5gYXAAQgP7_X1dnAMUOJvHyPUjY5I" alt=""/></figure> <hr class="wp-block-separator"/> <h2>Evaluating President Bolsonaro&#8217;s accomplishments</h2> <p>Since taking office, President Jair Bolsonaro has had an on-again-off-again relationship with Congress—sometimes to the detriment of the agenda he wishes to pursue. As he has recently hit the 200-day mark as Brazilian head of state, we evaluate here what he has accomplished thus far. Rather than a judgment on the bills, this is an assessment of how much of his own agenda the president has been able to implement.</p> <h4>Implemented</h4> <p><strong>More scrutiny on pension frauds</strong>. President Jair Bolsonaro signed a provisional decree enforcing heavy scrutiny of how pension benefits are doled out. The government claims it could generate savings of BRL 9.8bn by cutting off irregular payments. On June 4, the Senate approved the decree, turning it into law.</p> <p><strong>Progress:</strong> 🔳🔳🔳</p> <hr class="wp-block-separator"/> <p><strong>Fostering family agriculture.</strong> The government gave family farmers more time to pay back loans taken as subsidies to farming. The move was sponsored by Agriculture Minister Tereza Cristina, herself a leader of the rural caucus in Congress.</p> <p><strong>Progress:</strong> 🔳</p> <hr class="wp-block-separator"/> <p><strong>Privatization of BR Distribuidora. </strong>Earlier this week, state-controlled oil and gas company Petrobras sold roughly half of its stake in fuel distribution subsidiary BR Distribuidora—retaining a minority share of 37%, thus making it a privately-controlled company. It was one of the few privatizations for which the government did not need Congress&#8217; approval.</p> <p><strong>Progress:</strong> 🔳</p> <hr class="wp-block-separator"/> <h4>Canceled</h4> <p><strong>Gun purchasing rules. </strong>In January, Mr. Bolsonaro signed a decree doubling how long gun permits are valid for (from 5 to 10 years). It also removed the need to prove &#8220;true need&#8221; for gun possession in order to have the permit granted. As Congress was set to repeal the decree, the president decided to revoke it himself in June, sending a regular bill for lawmakers to analyze.</p> <p><strong>Progress:</strong> 🔳🔳 ❌</p> <hr class="wp-block-separator"/> <h4>In progress</h4> <p><strong>Pension reform. </strong>Considered to be the main point of the government&#8217;s economic agenda this year, the pension reform will establish a minimum retirement age and stricter rules for pensions. Despite being a bit watered down by the House, the government projects savings of BRL 933bn for the next ten years. The bill was approved in one of two House votes (the second one is scheduled for early August). After that, the Senate must also approve it, in a two-round roll call vote, with at least 60 percent of seats backing it.&nbsp;</p> <p><strong>Progress:</strong> 🔳🔳🔳🔳 🔲 ⬜⬜</p> <hr class="wp-block-separator"/> <p><strong>Anti-crime bill.</strong> In February, Justice Minister Sergio Moro presented an anti-crime bill, promising to crack down on corruption and organized crime. The project rubbed politicians the wrong way, and it has since been dismembered into three bills. The House has struck down an article allowing defendants to be arrested after a conviction by a court of appeals (Supreme Court precedent follows that direction, but the court is set to probably change it in the near future). Meanwhile, the Senate&#8217;s Constitution and Justice Committee has approved the criminalization of illegal campaign funding—which is currently treated as a minor electoral offense.&nbsp;</p> <p><strong>Progress:</strong> 🔳🔳 🔲 ⬜⬜</p> <hr class="wp-block-separator"/> <p><strong>Gun ownership laws. </strong>After revoking his two decrees on the matter, President Bolsonaro tried to pass looser gun ownership rules through a classic bill. The proposal, however, has yet to be analyzed by House committees, before a two-round roll call vote in each congressional chamber.</p> <p><strong>Progress:</strong> 🔳 🔲 ⬜⬜⬜⬜⬜</p> <hr class="wp-block-separator"/> <p><strong>Changes to the drivers&#8217; code. </strong>During the presidential campaign, Mr. Bolsonaro promised to double the amount of infractions drivers must commit before losing their permits. A bill has been presented, but not yet analyzed by Congress.</p> <p><strong>Progress:</strong> 🔳 🔲 ⬜⬜⬜⬜⬜</p> <hr class="wp-block-separator"/> <p><strong>&#8220;Schools without parties.&#8221; </strong>The Bolsonaro administration wants to fight what it considers to be &#8220;leftist indoctrination&#8221; in schools. Congresswoman Bia Kicis, of Mr. Bolsonaro&#8217;s Social Liberal Party, sponsored a bill allowing students to record their teachers, in order to expose eventual biases. The bill has not yet been analyzed.</p> <p><strong>Progress:</strong> 🔳 🔲 ⬜⬜⬜⬜⬜</p> <hr class="wp-block-separator"/> <p><strong>Tax reform.</strong> Mr. Bolsonaro promised to make Brazil&#8217;s tax system simpler, but it is Congress leading the way on the matter. Without consulting the Economy Minister, Congressman Baleia Rossi presented a bill to unify several taxes. It has been met with reserve by Economy Minister Paulo Guedes, as it would affect taxes at federal, state, and municipal level.</p> <p><strong>Progress:</strong> 🔳🔳 🔲 ⬜⬜⬜⬜⬜</p> <hr class="wp-block-separator"/> <p><strong>Central Bank autonomy.</strong> The government proposes codifying into law the autonomy of the Central Bank in its control of monetary policy, arguing it will make investors trust Brazil more. In the past, presidents have influenced decisions on interest rates more based on their electoral interests, rather than long-term goals.</p> <p><strong>Progress:</strong> 🔳 🔲 ⬜⬜⬜⬜</p> <hr class="wp-block-separator"/> <p><strong>Literacy program.</strong> The president has signed—but not yet published—a decree establishing a set of goals to universalize literacy in Brazil. The text creates incentives for states and municipalities that adopt the program.</p> <p><strong>Progress:</strong> 🔳 🔲&nbsp;</p> <hr class="wp-block-separator"/> <p><strong>Homeschooling. </strong>The evangelical caucus, an important support base for the president, has embraced homeschooling as a goal. To implement it in Brazil, however, it will be necessary to amend the Constitution—a lengthy and difficult legislative process. A bill has been presented, but it has yet to be analyzed by House committees, before being voted on in two rounds by both congressional chambers.</p> <p><strong>Progress:</strong> 🔳 🔲 ⬜⬜⬜⬜</p> <hr class="wp-block-separator"/> <h4>Not advancing</h4> <p><strong>Moving embassy in Israel to Jerusalem. </strong>During the presidential campaign, Jair Bolsonaro announced he would follow in U.S. President Donald Trump&#8217;s <a href="https://www.bbc.com/news/world-middle-east-47442145">footsteps</a> and move the Brazilian embassy from Tel Aviv to Jerusalem. The move sparked a negative reaction from Arab-majority countries, and President Bolsonaro changed his tone, saying that only a business office would be set up in Jerusalem—but no move has been made.</p> <hr class="wp-block-separator"/> <p><strong>13th Bolsa Família payment. </strong>President Jair Bolsonaro promised to create a 13th monthly payment for the cash-transfer program. But it hasn&#8217;t translated into any action as of yet.

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