Lula’s plan to get the evangelical vote

. Jan 13, 2020
evangelical voters Photo: A.Paes/Shutterstock

Good morning!  This week, how the Workers’ Party tries to lure Evangelical voters to the left. Jair Bolsonaro’s trip to India. Brazil’s lost decade. (This newsletter is for premium and standard subscribers only. Become one now!)


The Workers’ Party bidding for Evangelical voters

In his effort to bring his Workers’ Party back to power

, former President Lula has ordered the party&#8217;s state chapters to create &#8220;Evangelical cores,&#8221; and even plans the launch of a sort of Evangelical summit.</p> <p><strong>Why it matters.</strong> Evangelicals are the fastest-growing religious group in Brazil, accounting for 30 percent of the population, according to some estimates. It is also a populational cluster that is strongly averse to the Workers&#8217; Party.</p> <p><strong>Evangelical growth, explained.</strong> A group of economists at think tank Fundação Getulio Vargas studied the relation between the impact of economic crises on people&#8217;s religious behavior. They crafted a hypothesis according to which areas that suffered the most in recent economic downturns observed the biggest surge in Evangelical churches. For each 1-percent loss in revenue during the 1990s, they identified a 0.8-percent growth in the number of Evangelicals. &#8220;These churches give vulnerable populations a solidarity network the state has failed to,&#8221; Francisco Costa, one of the authors of the study, told <strong>The Brazilian Report</strong>.</p> <p><strong>Importance. </strong>The growth in numbers of Evangelical Christians has been followed by an increased political presence—with the Evangelical caucus being one of the most powerful interest groups in Congress. Their performance is less propositional, instead focused on blocking legislation that goes against their values, such as bills concerning abortion rights or same-sex marriage.</p> <div class="flourish-embed" data-src="visualisation/1225909"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p>This increased influence is natural, but Mr. Costa warns that should Evangelicals&#8217; growth trend continue, this segment of society would be overrepresented—which usually creates distortions in the political system.</p> <p><strong>Lost ground.</strong> According to newspaper <em>Folha de S.Paulo</em>, Lula told his underlings that the party &#8220;has much to learn from preachers,&#8221; who &#8220;speak well and tell people what they want to hear.&#8221; However, seizing the Evangelical vote is easier said than done. This group has been co-opted by conservative groups for some time and massively supported Jair Bolsonaro in the 2018 election. It will be an uphill battle to crack the president&#8217;s stronghold among Pentecostal Christians and Baptists.</p> <hr class="wp-block-separator"/> <h2>Bolsonaro looks to India</h2> <p>After deciding to pass on the World Economic Forum in Switzerland, President Jair Bolsonaro has established India as his first big destination early in 2020—where he will be a guest of honor for the celebrations of India&#8217;s Republic Day, on January 26.</p> <p><strong>Why it matters.</strong> Despite huge potential, Brazil&#8217;s trade relations with India remain underwhelming. The Brazilian government hopes that the visit will result in the signature of trade deals that could boost exports to one of the fastest-growing economies in the world. The International Monetary Fund predicts a 7.1-percent growth for the Indian economy this year—more than the 5.9 percent forecast for China.</p> <p><strong>Ordre du jour.</strong> In December, Agriculture Minister Tereza Cristina said partnerships for ethanol production would be atop the agenda. &#8220;When Prime Minister Narendra Modi visited Brasília for the BRICS Summit, he wanted to discuss biofuels,&#8221; she said. Poultry sales will be another hot topic, as India recently opened its market to Brazilian exporters. In 2019, India consumed 5 million tons of poultry—which is more than Brazil exported to the entire world in 2018 (4 million tons).</p> <p><strong>Trade.</strong> Diesel, insecticides, and polyester are the main products Brazil imports from India—while the South Asian nation mainly buys oil, soybeans, and gold from Brazil. &#8220;India is one of the top 10 strategic markets for our industry. It is the second-biggest market, on its way to becoming the world&#8217;s most-populated country by 2050,&#8221; said Diego Bonomo, executive manager of Brazil&#8217;s National Confederation of Industry.</p> <p><strong>Entourage.</strong> President Bolsonaro will be flanked by five cabinet members: Ernesto Araújo (Foreign Affairs), Tereza Cristina (Agriculture), Paulo Guedes (Economy), Marcos Pontes (Science and Technology), and Bento Albuquerque (Mines and Energy). Marcos Troyjo, the Economy Ministry’s Secretary of Foreign Trade, will also be present.</p> <p><strong>Schedule. </strong>While Jair Bolsonaro&#8217;s four-day schedule in India is still being set up, one thing is certain: he will place flowers at the thumb of pacifist Mahatma Gandhi, the leading hero of India&#8217;s independence movement. Former Brazilian presidents Fernando Henrique Cardoso and Lula also did that, when they represented Brazil in India.</p> <hr class="wp-block-separator"/> <h2>Markets</h2> <p>Banco Inter informed it ended 2019 with 4.1 million clients—180 percent more than in 2018—and a record loan origination of BRL 4.3 billion. The numbers seem to have boosted investors’ optimism, and the bank&#8217;s stock (<a href="https://www.investing.com/equities/banco-inter-sa">BIDI4</a>) rose 4.87 percent to BRL 18.10 on Friday. However, CitiGroup remains concerned about how Inter will monetize their newly-added customers and how it will impact costs.</p> <p style="text-align:center"><strong><em>Natália Scalzaretto</em></strong></p> <hr class="wp-block-separator"/> <h2>The 2010s, Brazil&#8217;s lost decade</h2> <p>During the 2010–2019 span, Brazil&#8217;s economy registered its lowest growth rate since 1900. &#8220;The average annual performance in the decade that just ended was less than half of what we had during the 2000s,&#8221; says Roberto Macedo, an economist at the University of São Paulo. The data gets even bleaker as we compare Brazil to emerging and developing nations, which grew at a rate 3.6 times higher than Latin America&#8217;s top economy.</p> <div class="flourish-embed" data-src="visualisation/1225755"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <hr class="wp-block-separator"/> <h2>Looking ahead</h2> <p><strong>South Pole.</strong> On Tuesday, Brazil will inaugurate the new Comandante Ferraz Antarctic Station—which had been destroyed by fire back in 2012. Since reconstruction began in 2017, the Brazilian government has spent USD 100 million on the project. The new facilities are more modern and occupy an area of 4,500 square meters. Its 17 laboratories and can host up to 64 people at any one time.</p> <p><strong>Construction.</strong> At least five construction companies focused on residential buildings are expected to hold initial public offerings this year. They are expected to raise a combined amount of BRL 5 billion. According to data from consultancy firm Economática, the construction sector yielded the highest returns in 2019: 106 percent—a testament to the sector&#8217;s positive outlook.</p> <p><strong>Pensions.</strong> Governors have until the end of the week to decide whether or not they want to postpone new, stricter rules for the retirement pensions of police officers—which would then only come into effect in 2022. Despite the dreadful financial situation faced by state administrations, governors are willing to postpone the new pension rules out of fear of a reaction from disgruntled cops.</p> <p><strong>Justice.</strong> The Supreme Court Chief Justice is expected to rule this week on three cases in which plaintiffs ask for the court to declare the creation of the so-called “<a href="https://brazilian.report/power/2020/01/11/new-type-judge-splits-opinions-brazil-justice-system/">guarantees judge</a>” as unconstitutional. This new type of judge—similar to existing mechanisms in Portugal, Spain, Chile, Italy, and the U.S.—creates an office that would act in pre-procedural phases of cases, to ensure that law enforcement doesn&#8217;t overstep its bounds. Today, one judge is in charge of investigations and ruling on trials—which many observers say can make judges unconsciously side with prosecutors. Chief Justice Dias Toffoli is a supporter of the “guarantees judge” and should rule against the plaintiffs.</p> <hr class="wp-block-separator"/> <h2>In case you missed it</h2> <p><strong>Corruption.</strong> The Federal Police presented charges against 29 individuals suspected of defrauding state-run pension funds—creating losses of USD 15 billion over the last decade. Among the accused is Esteves Colnago, a special advisor to Economy Minister Paulo Guedes. Mr. Colnago denies any wrongdoing; the Economy Ministry says he is collaborating with the investigations. The probe, entitled Operation Greenfield, is arguably the largest of its kind since Operation Car Wash.</p> <p><strong>Inflation.</strong> Brazil&#8217;s official inflation rate for 2019 was 4.31 percent. It was the first time since 2016 that the rate ended the year above the government&#8217;s target (4.25 percent). The rate was mainly pushed by 32-percent increases in meat prices—a consequence of China&#8217;s intense demand after losing entire domestic hog herds to a swine flu outbreak. With higher inflation, the minimum wage proposed by the Jair Bolsonaro administration for 2020 has lost 0.4 percent of its purchasing power from 2018.</p> <p><strong>Industry.</strong> Data released last week shows that the country’s industry had a terrible month in November, with an output 1.2 percent lower than October. The main lowlight was the food sector, which was down 3.3 percent despite the increased demand for meat. Even sol, economists project better results for 2020, with the sector expecting to grow anywhere between 2 and 3 percent.</p> <p><strong>Fuels.</strong> Since tensions between the U.S. and Iran began escalating, the Brazilian government has begun exploring ways to avoid a massive hike in fuel prices. One of the main risks is another truckers&#8217; strike, in the molds of the one that created massive financial losses in 2018. As it is, truckers are already disgruntled over freight prices and rising fuel costs, and some groups even tried—without success— to stage a strike last month. Mines and Energy Minister Bento Albuquerque is studying the creation of a state-run fund to be used in times of rising international oil prices.</p> <p><strong>Meat.</strong> While Brazilian meat producers are shipping like never before to China, the U.S. market remains closed to the country&#8217;s <em>in natura</em> beef, banned over two years ago by American health authorities. The Bolsonaro administration said it believes the move is retaliation against Brazil&#8217;s import quotas for American ethanol. President Bolsonaro reportedly promised Donald Trump he would slash levies on ethanol from the U.S., but ultimately sided with local producers. While Brazilian beef wouldn’t have a big market in the U.S., being accepted by one of the strictest food regulation agencies in the world would be a major image boost.

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