Good morning! New opinion poll shows Jair Bolsonaro’s popularity ratings stabilizing around 33% (the poll also talks about how people perceive the Car Wash leaks). The government’s plan for after the pension reform. The economic risks of deforestation. Antitrust regulator pushes Petrobras out of a pipeline in Bolivia. 


Poll: Bolsonaro losing ground among the elites

Datafolha, Brazil&#8217;s most prestigious pollster, has published new opinion polls on the Jair Bolsonaro administration. His overall numbers remain stable and show a steep division in the electorate: 33% rate him as &#8220;bad or terrible,&#8221; 31% as &#8220;just ok,&#8221; and 33% as &#8220;good or great.&#8221; Notwithstanding being the least-popular Brazilian president after just 6 months in office, Mr. Bolsonaro has held on to a faithful core of supporters.</span></p> <p><span style="font-weight: 400;">But the poll also shows that wealthier voters are becoming more critical of the president: among those earning between 5 and 10 times the minimum wage, Mr. Bolsonaro&#8217;s approval rating dropped from 43 to 37%. His figures went up among those earning over 10 times the minimum wage (from 41 to 52%), but this is a much less sizeable group.</span></p> <p><span style="font-weight: 400;">The electorate, in general, is growing pessimistic of Mr. Bolsonaro&#8217;s administration. For 61% of voters, he is doing less than what was expected of him. And the sentiment of uneasiness around the future (58% overall) is particularly present among women (71%). The worst-rated area of the government has been the Education Ministry—with only 9% of those who have heard of Minister Abraham Weintraub praising his actions.</span></p> <ul> <li><b>Go deeper:</b> <a href="https://brazilian.report/power/2019/07/03/bolsonaro-congress-relationship/"><span style="font-weight: 400;">Bolsonaro’s on-again, off-again relationship with Congress</span></a></li> </ul> <hr /> <h2>The government&#8217;s post-pension reform plan</h2> <p><span style="font-weight: 400;">After the pension reform was approved by a House committee last week, the Economy Ministry has started to draft its agenda for after the bill&#8217;s approval by the floor. Initiatives include presenting a tax reform bill, increasing the privatizations program, and implementing the already-announced strategy to lower gas prices. </span></p> <p><span style="font-weight: 400;">The government also wants to inject more money into the economy through the release of funds from the FGTS—a severance fund usually only available when a worker is laid off—and pushing the benchmark interest rate even further down. The Economy Ministry also plans to offer better conditions for credit and imports.</span></p> <p><span style="font-weight: 400;">That plan, however, can only be set in motion </span><i><span style="font-weight: 400;">after </span></i><span style="font-weight: 400;">the House approves the reform in a two-round roll call vote, where at least 60% of members of Congress must support it. Speaker Rodrigo Maia has tried to speed up the process, promising that floor debates should start tomorrow—and forecasting approval this week. </span></p> <p><span style="font-weight: 400;">It will be anything but easy, as many organized lobbies want to get better retirement rules. President Bolsonaro himself has been an advocate for law enforcement agents, saying he expects the floor to &#8220;correct the committee&#8217;s mistake&#8221; of not giving cops preferential conditions.</span></p> <hr /> <h2>The economic risks of deforestation</h2> <p><span style="font-weight: 400;">A group of researchers from the Federal University of Rio de Janeiro, the University of Brasília, and the Federal University of Minas Gerais published an article on the </span><a href="https://www.nature.com/nclimate/"><i><span style="font-weight: 400;">Nature Climate Change</span></i></a><span style="font-weight: 400;"> review outlining the &#8220;worst-case scenario&#8221; of deforestation in Brazil—caused by a combination of bad governance and incentives for predatory agricultural practices.</span></p> <p><span style="font-weight: 400;">According to the researchers, if deforestation continues to rise (it increased by 60% in June 2019), Brazil&#8217;s economy risks losing up to USD 5 trillion.</span></p> <p><span style="font-weight: 400;">The current scenario is already worrisome. If deforestation continues at the same pace, the average number of tree species in a given patch of rainforest is set to decline up to 58% by 2050. And human-induced destruction may end up effectively dividing the Amazon into two separate forests, one of which would be “severely fragmented.”</span></p> <p><span style="font-weight: 400;">Researchers believe Brazil is going back to 2005 when it comes to deforestation control. Back then, Brazil suffered from a lack of oversight from the government, coupled with the aggressive advance of timber firms and rural producers. </span></p> <hr /> <h2>Also noteworthy</h2> <p><b>No Super Moro.</b><span style="font-weight: 400;"> Voters who didn&#8217;t choose a candidate in the 2018 runoff presidential election amount to over 40m—or 30% of the electorate. Among these people, 60% consider the conduct of former Justice Minister Sergio Moro as &#8220;inadequate,&#8221; while 62% say that the actions revealed by the Car Wash leaks are serious and that his decisions should be revised. Even among supporters of Jair Bolsonaro that rate is elevated—at 48%, per a poll conducted by Datafolha.</span></p> <p><b>Bureaucracy.</b><span style="font-weight: 400;"> Earlier this year, the government approved a provisional decree cutting the time necessary to open a company in Brazil. The decree, however, will expire on Thursday—as lawmakers have their plates full with the pension reform. The Economy Ministry wants to convert the project with the new rules into a regular bill.</span></p> <p><b>Olive branch?</b><span style="font-weight: 400;"> Unlike his siblings, Senator Flávio Bolsonaro (the eldest brother of the president&#8217;s sons) has adopted a more conciliatory approach to Congress. In an interview, he defended centrist parties, a common target of Bolsonaro supporters. The strategy could have ulterior motives—Flávio is suspected of money laundering, and could face impeachment requests from the opposition. Being disliked by his peers could spell danger for him.</span></p> <p><b>Oil &amp; gas. </b><span style="font-weight: 400;">The board of Brazil&#8217;s antitrust authority Cade will rule today on the deal regulating Petrobras&#8217; divestments in the gas distribution business. The deal forces the company to sell off its remaining shares in two major pipeline networks in Brazil, as well as giving up control over the Brazil-Bolivia pipeline. </span></p> <p><b>Focus Report.</b><span style="font-weight: 400;"> Every Monday, the Central Bank publishes market predictions from top-rated investment firms. Expectations are high for today&#8217;s report—the first after the pension reform was approved in the House Special Committee. For the past 18 weeks, firms have decreased their GDP growth forecasts for 2019: 2.5% in January to 0.85% last Monday.

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BY Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.