President Jair Bolsonaro . Photo: José Dias/PR

Good morning! We’re covering the latest attempt against democracy by President Bolsonaro’s family. The government’s plan to tackle youth unemployment. And the long-coming clash between political parties and renewal movements. (This newsletter is for platinum subscribers only. Become one now!)


A major test to President Bolsonaro’s political strength

During an interview with a YouTube channel, Congressman Eduardo Bolsonaro said

that his father&#8217;s administration could pull employ the same strategies as the military dictatorship &#8220;if the left radicalizes&#8221; and &#8220;continues to blame [President Jair] Bolsonaro for everything.&#8221;</p> <p><strong>AI-5. </strong>Eduardo Bolsonaro evoked the infamous Institutional Act No. 5 (AI-5), enacted by the military regime in 1968 to give the president powers to dissolve Congress, impeach politicians, and suspend constitutional rights. It was one of the darkest moments in Brazil&#8217;s political life and led to the institutionalization of state-sponsored torture.&nbsp;</p> <p><strong>Response. </strong>The statement triggered reactions from all sides of the spectrum, with calls for the impeachment of the president&#8217;s son. House Speaker Rodrigo Maia himself evoked the possibility of punishment, stating that &#8220;the Constitution abominates, criminalizes, and has instruments to punish any group or citizen who attempts to threaten its principles.&#8221;</p> <p><strong>Why it matters. </strong>This is not the first time the Bolsonaros have shown their anti-democratic face. It&#8217;s not even the first time <em>this week</em>. While the president pushes supporters to charge against the Republic&#8217;s institutions (such as the Supreme Court), the sons make explicit threats to the democratic order. At this point, can we consider it just bravado?</p> <p><strong>Trial.</strong> The episode will be a test of President Jair Bolsonaro&#8217;s political strength. If the political establishment decides to go after the president&#8217;s son, we could head into an unprecedented crisis.</p> <p><strong>Apologies. </strong>After the backlash, President Bolsonaro said he told his son to &#8220;remove AI-5 from his vocabulary.&#8221; Eduardo, in turn, made an empty apology, saying believing he defended the use of a new AI-5—when he clearly said his father should consider using a new AI-5—was a &#8220;twisted interpretation&#8221; of his words.&nbsp;</p> <p><strong><em>Et tu, Exercitus?</em> </strong>Top Army commanders have talked to the press in anonymity, criticizing Eduardo Bolsonaro. Part of the Armed Forces has tried to detach its image from the government&#8217;s. However, a military wing with top government positions (spearheaded by security chief officer General Augusto Heleno) has become totally aligned with the views defended by the president.</p> <hr class="wp-block-separator"/> <h2>Government hopes fewer payroll taxes will drive hires</h2> <p>The Economy Ministry launched a program to stimulate companies to hire people between the ages of 18 and 29, mainly through tax breaks of up to 30 percent. The government hopes to insert up to 3 million young professionals into the workforce over the next two years. Hires of people over 55 will also lead to tax reductions.</p> <p><strong>Why it matters.</strong> Youth unemployment in Brazil reached 26 percent at the end of October, more than double the overall rate. At the current pace, it will take 20 years for the rates of young people out of work to descend back to pre-recession levels.&nbsp;</p> <p><strong>Worrisome. </strong>Today, a significant portion of people aged between 15 and 25 may reach their 45th birthday without ever having a formal job, with labor protections, higher salaries, and benefits.</p> <p><strong>Unemployment. </strong>Brazil&#8217;s rate of people out of work remained stable at 11.8 percent. The result was above the median expectation from analysts—and just 0.1 percentage point below the rate a year ago. Brazil&#8217;s unemployment curve has been going downwards recently, but at an extremely slow pace—which hasn&#8217;t been enough to help the economy kickstart in a country where family consumption is the main GDP driver.</p> <p><strong>Red flags. </strong>But the persistence of such high rates also exposes a deeper problem: the <a href="https://brazilian.report/tech/2019/08/16/future-job-market-automation-brazil-amazon/">lack of qualified labor</a> in Brazil. In sectors such as tech, for instance, there are more jobs available than there are capable workers.</p> <hr class="wp-block-separator"/> <h2>Political parties v. renewal movements: a long-coming battle</h2> <p>Libertarian party Novo has forbidden its members from being a part of cross-party political renewal movements or &#8220;any institution with political action.&#8221;</p> <p><strong>Why it matters. </strong>Since 2013, when Brazilians took to the streets against the political establishment, several of these movements have sprouted, electing a total of 29 congresspeople and four senators in 2018. Traditional parties have called these organizations &#8220;clandestine parties&#8221; aimed at pushing forward hidden agendas. Now, Novo becomes the first to formally boycott them—and it could be followed by other parties.</p> <p><strong>Beef. </strong>Rookie Congresswoman Tabata Amaral is a classic example of the questions raised around the allegiances of members of renewal movements. Ms. Amaral, of the Democratic Labor Party (PDT), supported the pension reform against her party&#8217;s orientation and could be expelled.</p> <div class="flourish-embed" data-src="visualisation/479509"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p><strong>What are these political renewal movements?</strong> As <a href="https://brazilian.report/power/2019/07/26/political-renewal-movements-threat-brazilian-parties/">Alex Hochuli wrote on </a><strong><a href="https://brazilian.report/power/2019/07/26/political-renewal-movements-threat-brazilian-parties/">The Brazilian Report</a></strong>: &#8220;They appear to follow the logic of the new social movements, of broad currents based on adherence to a set hopes and ideals, [but] in most cases they have no social roots. They are organizations for the formation of individual political leaders.&#8221; Many are funded by billionaires, which raises questions about their true agendas and purposes.</p> <p><strong>Hypocrisy. </strong>While claiming that such organizations are clandestine parties, traditional politicians conveniently forget that, by associating with them during the 2018 election, they managed to recuperate their image—tarnished by recent scandals that have hit all major parties.</p> <p><strong>Why not found a party?</strong> Creating a new party in Brazil is easier said than done. A group must get millions of signatures across the country, in what can be a lengthy and expensive endeavor.</p> <hr class="wp-block-separator"/> <h2>What else you should know</h2> <p><strong>Politics.</strong> Environment Minister Ricardo Salles has been temporarily suspended by his Novo party—and could be expelled. In a statement, the party mentioned an article in its statute allowing members to be suspended when there is &#8220;grave risk to the image and reputation of [the party].&#8221; Mr. Salles has been heavily criticized for his handling of recent environmental crises and ill-advised statements.</p> <p><strong>Wildfires.</strong> According to the National Institute for Space Research, there have been 8,479 wildfires registered in the Pantanal biome since January. The figures show a 462-percent jump from the same period in 2018. Fires are considered to be atypical for this time of year, when the weather is usually more humid. In 2019, though, temperatures are up and air humidity is down.</p> <p><strong>Aviation.</strong> Gol, Brazil&#8217;s largest domestic airline, registered losses of BRL 242 million in Q3 2019, due to problems with 18 of its planes. The company was affected by the international grounding of <a href="https://brazilian.report/newsletters/weekly-report/2019/03/30/737-max-brazil-only-country-demand-specific-training/">Boeing&#8217;s 737 MAX planes</a> (which crashed twice due to system malfunctions), and cracks on the fuselage of another 11 planes. Yesterday, Gol shares lost 5.3 percent.</p> <p><strong>Stocks.</strong> Retail behemoth Magazine Luiza will make a share offering in the hopes of raising BRL 5 billion. The move comes during the company&#8217;s best moment since its IPO in 2011. Since going public, share price (<a href="https://www.investing.com/equities/magaz-luiza-on-nm">MAGLU3</a>) gained 174 percent, reaching yesterday an all-time high of BRL 44.64.</p> <p><strong>Monarchy? </strong>Dom Bertrand of Orléans and Braganza, great-grandson of Emperor Pedro II (who ruled Brazil until the <a href="https://brazilian.report/podcast/2018/11/14/brazil-coups-revolutions-history/">Proclamation of the Republic</a> in 1889) was called &#8220;his Imperial and Royal Highness&#8221; by the <a href="https://twitter.com/BrazilinUSA/status/1189666235203629056">official Twitter account</a> of Brazil&#8217;s embassy in Washington D.C Even 130 years after the end of the Brazilian monarchy, the Orléans-Braganza house continues to raise new generations <em>comme il faut</em>—that is, giving their children the proper education to become a future ruler and marrying their family members to royals. They also keep alive the hope of reclaiming the crown and have found support on the far-right. But in a <a href="https://brazilian.report/society/2017/12/01/royal-affair-brazilian-style/">referendum in 1993</a>, only 10 percent of Brazilians got behind the monarchic cause.

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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.