Good morning! Today, we take a look at how the massive use of antibiotics could create a “superbug” among Brazilian livestock herds. The impasse around Lula’s freedom. The new U.S. ambassador to Brazil. And the most profitable investments in Brazilian markets this year. (This newsletter is for platinum subscribers only. Become one now!)


The threat of a “superbug” to Brazilian herds

The presence of germs and bacteria

highly resistant to antibiotics in livestock has reached worrisome levels in several developing nations—including the South and Southeast regions of Brazil. That is according to the <a href="https://science.sciencemag.org/content/365/6459/eaaw1944">first major survey on the issue</a>.&nbsp;</p> <p>A team of researchers analyzed 901 global studies reporting antimicrobial resistance over the past two decades—which help identify some trends.</p> <p><strong>Why it matters.</strong> The study reveals a silent—but growing—health hazard for herds, as well as for those who consume meat and dairy products. And that affects <em>a lot</em> of people. In 2017 alone, the world consumed 330 million tons of beef.</p> <p><strong>How did we get here?</strong> The problem (which is not exclusive to Brazil) is directly linked to the excessive use of antibiotics by meat producers. As a cost-saving measure, they frequently use antibiotics to not only treat detected infections, but also as a disease-prevention method. That avoids many costs with phytosanitary measures.&nbsp;</p> <p><strong>Risks.</strong> Scientists believe that around 70 percent of bacteria that cause infections are <a href="https://edition.cnn.com/2019/01/24/health/antibiotic-resistance-climate-change-gbr-scli-intl/index.html">already resistant</a> to at least one antibiotic that would otherwise be used to combat it. Some experts have called &#8220;superbugs&#8221; a threat as grave as warfare or climate change.</p> <hr class="wp-block-separator"/> <h2>The new U.S. ambassador to Brasília</h2> <p>The White House has chosen longtime diplomat Todd Chapman to be its new ambassador to Brasília (his last post was as ambassador to Ecuador). For the past 11 months, the position had been filled on an interim basis by Chargé d’Affaires William Popp. Per diplomatic rules, Brazil must first agree to Mr. Chapman&#8217;s appointment—who then must be approved by the U.S. Senate.</p> <p><strong>Why it matters.</strong> <a href="https://brazilian.report/power/2018/07/30/donald-trump-brazil-u-s-relations/">Brazil-U.S. relations</a> are a key point of Jair Bolsonaro&#8217;s foreign policy.&nbsp;</p> <p>The White House&#8217;s selection, experts say, is good news. Mr. Chapman is a career diplomat, fluent in Portuguese, and has experience in Brazil. By choosing him, the U.S. government opts for a technical name, not a political appointee—signaling a focus on long-term relations rather than the current political situation in Brazil.</p> <p><strong>Different criteria.</strong> Mr. Bolsonaro chose his son Eduardo to be his ambassador in Washington (although the pick has not yet been made official), saying he is close to the Trump administration. But Mr. Chapman allows the U.S. government to establish conversation lanes with political currents outside of &#8220;Bolsonarism.&#8221;</p> <p><strong>Disregard?</strong> The post of U.S. ambassador to Brasília had been vacant since November 2018, when Peter Michael McKinley left town. And it remained one of the few embassy posts to which President Donald Trump didn&#8217;t bother assigning anyone. &#8220;That is particularly puzzling considering the importance the Brazilian government gave to the U.S. in international relations,&#8221; wrote researcher Carlos Poggio.&nbsp;</p> <script src="https://www.buzzsprout.com/299876/1078967-52-when-jair-met-donald.js?player=small" type="text/javascript" charset="utf-8"></script> <hr class="wp-block-separator"/> <h2>Free Lula?</h2> <p>In prison since April 2018, former President Lula has already served one-sixth of his eight-year sentence for corruption and money laundering after he was found guilty of accepting a beachfront triplex apartment as a kickback from a construction firm. His current time served means he has become eligible for house arrest. But now, he does not want to leave prison.</p> <p><strong>Why it matters. </strong>Since Lula has been arrested, his Workers&#8217; Party has been stuck in a loop with only one point on its agenda: Free Lula. On one hand, having the former leader on house arrest could demobilize supporters. On the other, it could help the party focus on issues that matter to the whole country. Since Jair Bolsonaro came to power, the Workers&#8217; Party, the only party with any genuine grassroots militancy in Brazil, has fallen into a state of near-futility.</p> <p><strong>Political act.</strong> There is reason to believe that both the prosecutors who asked for Lula&#8217;s house arrest and the former president himself have ulterior motives. Allies of Lula say that, by asking for him to be released from jail, Operation Car Wash prosecutors want to minimize criticism over their methods—and prevent the Supreme Court from analyzing a habeas corpus request by Lula&#8217;s defense.</p> <p>But Lula is also pandering to his base. By refusing to leave prison, he sustains the argument that he is a political prisoner. Moreover, Lula could face other convictions in the near future—which could put him back behind bars in just a few months.</p> <p><strong>Need to oblige.</strong> According to most legal experts, Lula cannot refuse a move to house arrest, but that is not a consensus among scholars. The only way for him would be to break a judge&#8217;s determination <em>after</em> being going on house arrest, so he would have his benefit revoked.</p> <script src="https://www.buzzsprout.com/299876/1078958-55-after-1-year-in-jail-what-will-become-of-lula.js?player=small" type="text/javascript" charset="utf-8"></script> <hr class="wp-block-separator"/> <h2>The most profitable investments in the Brazilian market</h2> <p>According to data from B3, Brazil&#8217;s stock exchange operator, the IBrX-50 (the index of the top 50 most valuable companies publicly traded in Brazil) represented the most profitable investment in September, up by 3.69 percent. It was followed by the Ibovespa, the benchmark stock market index, which rose 3.57 percent. Meanwhile, gold was down—despite traditionally being a safe gamble for risk-averse investors.</p> <p><strong>Why it matters.</strong> Risky investments have stood out in recent months and, with the benchmark interest rate at its lowest level ever, the Brazilian market is becoming less profitable for risk-free investments. The upside is that it could force millionaires into placing their money in more productive ventures than fixed-income funds.</p> <div class="flourish-embed" data-src="visualisation/671542"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <hr class="wp-block-separator"/> <h2>What else you need to know</h2> <p><strong>Pension reform.</strong> The pension reform bill could pass today in the Senate, in the first of two rounds of votes. The plan is to have the upper house&#8217;s Constitution and Justice Committee approve it in the morning, so the floor can pass it in the afternoon. As with any constitutional amendment, the reform needs at least 49 of the Senate&#8217;s 81 votes to pass.</p> <p><strong>Economy 1.</strong> Brazil&#8217;s national debt has risen to a record-high 79.8 percent of GDP, according to Central Bank figures released yesterday. The numbers highlight the government&#8217;s challenge to bring public finances back to health— a prerequisite for attracting investors.&nbsp;</p> <p><strong>Economy 2. </strong>Since 2014, Brazil&#8217;s industrial activity has dropped 15 percent, while it has increased by 10 percent around the world. Structural problems and the 2014–2016 recession severely dropped confidence levels in the country, helping to explain the steep deindustrialization.</p> <p><strong>Labor.</strong> Almost one-third of Brazilian registered workers only earn the minimum wage (BRL 998, or USD 240), according to a survey by consultancy firm IDados. Furthermore, 10.9 percent of workers with a college degree are also only earning the minimum wage. Before the 2014–2016 recession, that rate was 8.4 percent.</p> <p><strong>Peru.</strong> Trying to end a year-long battle with right-wing congressmen over his anti-corruption agenda, Peruvian President Martín Vizcarra dissolved Congress and called for new legislative elections. But lawmakers reacted by suspending him from office, and empowering Vice President Mercedez Araoz to replace him. Mr. Vizcarra&#8217;s allies claim that the move was not valid, as Congress had already been closed. Peru has faced political crisis since many of its top politicians were ensnared in a massive bribery scandal involving Brazilian construction company Odebrecht.

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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.