Child with microcephaly is seen in a center that cares for people affected by congenital zika syndrome in Salvador.

Good morning! We’re covering today a groundbreaking way of testing for the Zika virus—which scared the world in 2016 and 2017. Plus, Jair Bolsonaro’s latest strategy to foster economic growth. And the rising tensions around the Supreme Court. (This newsletter is for platinum subscribers only. Become one now!)


Brazilians develop state-of-the-art Zika test

Researchers at the University of São Paulo developed

a test to improve diagnoses of the Zika virus. Until now, the main obstacle for properly diagnosing the mosquito-borne disease is its genetic resemblance with dengue fever. The new test, however, enhances precision from 75 to 92 percent—virtually eliminating false positives or false negatives.</p> <p><strong>Why it matters.</strong> The Zika virus is considered by the World Health Organization as an ongoing threat, after declaring a global emergency in 2016. At the time, the virus had spread to 84 countries—almost every nation in the Western hemisphere, except Canada.</p> <p><strong>Patent.</strong> The researchers have patented their invention and are in the process of obtaining a commercial license. The test has been validated in over 3,000 patients, the majority of them female.</p> <p><strong>Health issues.</strong> Zika infections in pregnant women are linked to birth brain defects. Between 2010 and 2017, Brazil registered a 7-percent rise in such cases. The biggest increase was in the Northeast, where misinformation about how to prevent infections remains a major roadblock to eradicating Zika.</p> <p><strong>Mosquitoes.</strong> The main vector of the Zika virus is the same <a href="https://brazilian.report/society/2019/09/17/aedes-aegypti-dengue-fly-brazil-cant-swat/">mosquito</a> that transmits dengue fever, chikungunya, and yellow fever. The number of probable cases of dengue in Brazil spiked in 2019 after two years of lows. Between January and August, authorities recorded 599 percent more cases than in the same period of last year, leading the government to bring forward its summertime anti-mosquito campaigns.&nbsp;</p> <hr class="wp-block-separator"/> <h2>The government&#8217;s multiple fronts to foster the economy</h2> <p>It is safe to say that Economy Minister Paulo Guedes is at the head of one of the most reformist agendas Brazil has seen in recent years. However, the core points of his agenda depend on constitutional amendments (which are a lengthy and complicated legislative process) and will only bear fruit in the long-term. But in recent days, the government passed a series of decrees aiming to boost the economy in the short-term. They are:</p> <ul><li><strong>Bolsa Família.</strong> Fulfilling a campaign promise, Mr. Bolsonaro approved a 13th monthly payment of the cash transfer program—one of the key instruments in fighting extreme poverty. It could help millions of families&#8217; immediate needs. The bonus will be paid in 2019, it is as of yet unclear whether it will be continued in future years.</li><li><strong>Agro debt.</strong> The Central Bank authorized rural producers with government liabilities of up to BRL 3 million to roll over their debt. Only those who prove that their default is due to problems with harvests or sales will be eligible.</li><li><strong>Debt renegotiation.</strong> Up to 1.9 million taxpayers (among them individuals and companies) will be able to pay back their debt to the government with discounts of up to 70 percent, and in up to 100 installments. The government claims this program is not like the ones passed in previous administrations, which benefited large corporations who failed to pay their taxes—but it is instead focusing on debtors that wouldn&#8217;t be able to afford their payments otherwise.</li></ul> <p><strong>Why it matters.</strong> Brazil&#8217;s main GDP driver is family consumption. But high unemployment rates and a continuous loss of purchasing power have acted as major deterrents to a faster recovery. By injecting more liquidity into the economy, the government hopes to break the vicious cycle.</p> <p><strong>Income.</strong> A recent <a href="https://agenciadenoticias.ibge.gov.br/agencia-noticias/2012-agencia-de-noticias/noticias/25702-renda-do-trabalho-do-1-mais-rico-e-34-vezes-maior-que-da-metade-mais-pobre">study</a> by the Brazilian Institute of Geography and Statistics detected that half of the country&#8217;s workers earn, on average, monthly salaries of BRL 820 (less than USD 200).&nbsp;</p> <div class="flourish-embed" data-src="visualisation/601048"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <hr class="wp-block-separator"/> <h2>Supreme Court kicks off controversial trial amid growing tensions</h2> <p>The Supreme Court will start a trial today to decide if defendants can be arrested after a conviction in a court of appeals—or whether they can only go to prison after exhausting all appeals routes. Here are the three possible outcomes:</p> <ul><li><strong>No change.</strong> The court could maintain its <a href="https://brazilian.report/newsletters/daily-briefing/2019/10/15/big-center-big-losses-brazil-government/">current understanding</a> (established in 2016) that prisons <em>are</em> allowed after one failed appeal.</li><li><strong>U-turn.</strong> Justices could go back to their previous interpretation that prisons can only occur after the exhaustion of all appeals.</li><li><strong>Third way.</strong> The likeliest scenario, however, could be an intermediate solution: allowing for jail sentences to begin after a conviction by the Superior Court of Justice—the second-highest court in the Brazilian Justice system.</li></ul> <p><strong>Why it matters.</strong> The decision could benefit at least 16 people convicted by Operation Car Wash—including former President Lula. The issue has fueled political tensions, which have already been high, with a former Army commander talking about a risk of &#8220;social convulsion,&#8221; should the Supreme Court rule in favor of those defendants.</p> <p><strong>Extremists.</strong> Supporters of President Jair Bolsonaro talked about calling for a new AI-5—a reference to the <a href="https://brazilian.report/power/2018/12/13/ai-5-brazil-torture-repression/">military dictatorship&#8217;s Institutional Act No. 5</a>, of 1968, which shut down courts, Congress, impeached politicians, and suspended the right of habeas corpus for political prisoners. This call for extremism was sparked by Olavo de Carvalho, the Bolsonaro clan&#8217;s political guru—and publicly endorsed by a special advisor to the president. </p> <figure class="wp-block-embed-twitter wp-block-embed is-type-rich is-provider-twitter"><div class="wp-block-embed__wrapper"> <blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="pt" dir="ltr">Só uma coisa pode salvar o Brasil: a união indissolúvel de povo, presidente e Forças Armadas.</p>&mdash; Olavo de Carvalho (@opropriolavo) <a href="https://twitter.com/opropriolavo/status/1184338233322299395?ref_src=twsrc%5Etfw">October 16, 2019</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> </div></figure> <p>Mr. Bolsonaro remained silent.</p> <hr class="wp-block-separator"/> <h2>What else you should know</h2> <p><strong>Agribusiness.</strong> The rise in demand for animal protein has been a good omen for Brazil&#8217;s livestock breeders. This segment of agribusiness should earn BRL 63 billion in 2019, a rise of 13 percent from last year—thanks in part from pork sales, which were positively affected by a swine flu outbreak in China that devastated herds in the Asian country, bumping exports. The overall agribusiness sector should earn BRL 1.47 trillion this year—representing 20 percent of the Brazilian GDP.</p> <p><strong>Haiti.</strong> After 15 years, the UN Security Council has announced the end of a peacekeeping mission in Haiti. The operation will be replaced by a political mission—despite the Caribbean country&#8217;s grave political, economic, and social crisis. Established in 2004, when then-President Jean-Bertrand Aristide was toppled, the United Nations Stabilization Mission in Haiti was primarily made up of Brazilian forces.</p> <p><strong>Energy.</strong> The board of directors at Eletrobras, Brazil&#8217;s state-owned energy firm, will analyze a possible BRL 10-billion capital increase—which would set into motion its privatization process. The move would make Eletrobras more appealing to investors by improving its balances, scrapping a big chunk of the debt the company has to the federal government. In recent years, the administration gave Eletrobras money as an advance of future capital increases. In 2019, the firm&#8217;s stock has risen by almost 50 percent.</p> <p><strong>Cabinet.</strong> The government wants a constitutional amendment lifting the need for Congress to approve changes to its cabinet structure. As it stands, the president must make such changes through provisional decrees—which must be validated by lawmakers. Parties, however, have used their power to block cabinet restructurations as leverage in negotiations with the administration. On the other hand, opponents of the proposal say it would curb checks and balances.</p> <p><strong>Startups. </strong>Ebanx, a Curitiba-based fintech operating payment gateways for clients such as Spotify and Airbnb, is Brazil&#8217;s latest unicorn—the term used for startups valued at over USD 1 billion. There are now nine such companies in the country. Following its latest round of investment, headed by American private equity fund FTV Capital, the company plans to expand to North America, Europe, and Asia. Currently, 15 percent of Ebanx&#8217;s transactions come from outside of Brazil, a rate they hope will be over 50 percent in three years.

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BY Gustavo Ribeiro

Gustavo is the founder of The Brazilian Report, and is an award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.