In this week’s issue: The most important facts of the week. Stalled infrastructure projects in Brazil. Brazilian presidential candidates in 2018 election hunt for VP nominees.


The week in review

  • Truckers’ strike. No sector was spared from the negative effects caused by May’s 11-day truckers’ strike. The services industry, which accounts for over 70% of the wealth produced in Brazil, shrank by 3.8% in May. Industries produced 10.9% less, a drop only comparable to December 2008, during the global economic crisis.
    </li> <li><strong>Congress. </strong>Brazilian lawmakers approved guidelines for next year&#8217;s budget, slashing austerity mechanisms and allowing, among other things, for pay raises to civil servants. The 2019 budget could have additional expenses of BRL 72bn, which would make the first year of the next government virtually inviable. Brazil&#8217;s primary deficit goal is BRL 159bn.</li> <li><strong>Boeing-Embraer. </strong>Unions representing Embraer workers fear that, unless Embraer and Boeing make sure to develop new projects in Brazil (something neither company has guaranteed), Brazilian factories will be in jeopardy.</li> <li><strong>Lula. </strong>Last Sunday, former President Lula was at the center of a judicial battle between a judge who wanted to release him from prison and those who originally sentenced him and intended to keep him behind bars. Superior Courts sided with the latter, and the judge who tried to benefit Lula could face disciplinary proceedings.</li> <li><strong>GDP. </strong>IMF analysts said on Wednesday they were forecasting &#8220;uninspiring&#8221; economic growth for Latin America&#8217;s biggest economy. Brazil&#8217;s GDP could grow by 1.8% this year and 2.5% in 2019, supported by &#8220;domestic consumption and investment.&#8221; Back in May, the <a href="https://www.euronews.com/2019/09/21/at-imf-meeting-ukraines-president-promises-to-safeguard-central-banks-independence">IMF</a> had predicted a 2.3% GDP growth for 2018.</li> </ul> <hr /> <h2>Stalled infrastructure projects in Brazil</h2> <p>Besides investing little on <a href="https://brazilian.report/money/2019/06/27/huawei-controls-telecom-infrastructure-brazil/">infrastructure</a> (roughly 2% of GDP), Brazil is wasting a significant amount of money with the excessive amount of projects that have been interrupted before conclusion. According to the Ministry of Planning, Brazil has 2,796 stalled projects &#8211; 517 of which are in infrastructure, a sector in which the country desperately needs investment.</p> <hr /> <p><img class="alignnone size-full wp-image-24499" src="https://brazilian.report/wp-content/uploads/2018/07/unnamed-18.png" alt="Stalled infrastructure projects in Brazil." width="1096" height="754" srcset="https://brazilian.report/wp-content/uploads/2018/07/unnamed-18.png 1096w, https://brazilian.report/wp-content/uploads/2018/07/unnamed-18-300x206.png 300w, https://brazilian.report/wp-content/uploads/2018/07/unnamed-18-768x528.png 768w, https://brazilian.report/wp-content/uploads/2018/07/unnamed-18-1024x704.png 1024w, https://brazilian.report/wp-content/uploads/2018/07/unnamed-18-610x420.png 610w" sizes="(max-width: 1096px) 100vw, 1096px" /></p> <hr /> <h2>Brazilian presidential candidates in 2018 election hunt for VP nominees</h2> <p>At this stage of the 2018 election campaign, five names have consolidated themselves as the only presidential candidates with any chance of winning: former President Luiz Inácio Lula da Silva (or whoever he chooses to replace him), far-right congressman Jair Bolsonaro, centrists Marina Silva and Ciro Gomes, and center-right Geraldo Alckmin. In order to boost their candidacies, all are trying to lure different parties into coalitions, offering the vice president spot on their ticket in return.</p> <p>Vice presidential candidates don&#8217;t necessarily bring votes, instead their impact is more indirect. In 1994 and 2002, Fernando Henrique Cardoso and Lula chose candidates connected to conservative sectors in order to improve their image with the establishment. The most important impact, however, is increasing a candidate&#8217;s share of free airtime on TV and radio.</p> <p>In Brazil, there are 40 minutes every day of free political broadcasts on television on radio, which is split between the parties according to their number of seats in Congress. The more parties one has in their coalition, the more time they get to talk directly to voters.</p> <h4>Main potential nominees</h4> <p>There is a new vice presidential nominee on the market: right-wing business mogul Flávio Rocha, who entertained running himself until standing down on Friday. While his candidacy never took off, he is a member of the Brazilian Republican Party, a right-wing party connected to the Universal Church of the Kingdom of God, the controversial evangelical church which is linked to corruption scandals but which has huge political potential.</p> <p>Another coveted name is former Finance Minister Henrique Meirelles. While he still dreams of the presidency, his polling numbers show that the electorate doesn&#8217;t share that sentiment and Meirelles receives no more than 1% of votes.</p> <p>Businessman Benjamin Steinbruch, former CEO of steel company CSN, has been linked to Ciro Gomes, the candidate of the centre-left Democratic Labor Party. While Mr. Steinbruch could improve Mr. Gomes&#8217;s standing with the financial markets, this alliance wouldn&#8217;t help with voters. Mr. Steinbruch&#8217;s image has been tainted by failed business ventures and his name was caught up in the Panama Papers scandal.</p> <p><span style="color: #000000; font-family: 'source sans pro', 'helvetica neue', helvetica, arial, sans-serif;">The belle of the ball, however, is Josué Alencar, a businessman and son of José Alencar, who served as Lula&#8217;s vice president for eight years. Like his father, Mr. Alencar would help create the image of a candidate which has the support of the productive sector.

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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.