Lula has been the main leader of the Brazilian left. Photo: Ricardo Stuckert

In this week’s issue: The most important facts of the week. Electoral Justice system bars Lula from presidential election. Brazil’s lackluster GDP growth rates.


The week in review

  • Exchange rate. The Brazilian Real climbed 1.78% against the U.S. Dollar, which closed Friday at BRL 4.072. Over the week, the BRL gained 0.78% – however, the currency dropped 8.46% over the month of August, the biggest drop since September 2015. Investors fear a return of the left-wing to power. Fernando Haddad – the future Workers’ Party candidate for president – has quietly met with investment firms to tame fears.
  • Online campaigning. Left-wing militants have come forward to accuse the Workers’ Party of paying up to BRL 2,500 for posting favorable tweets – which is not illegal according to electoral regulations. Congressman Leonardo Quintão, from the Brazilian Democratic Movement party in Minas Gerais, had a similar app and paid up to BRL 9,000. Electoral prosecutors have opened an investigation – and candidates that benefited from the illegal strategy can be fined up to BRL 30,000.
  • Pesticides. Federal prosecutors have opened negotiations with sanitary agency Anvisa and the Ministry of 
    Agriculture to reach an agreement regarding the use of glyphosate, a popular pesticide among soybean producers. According to the proposed deal, the restrictions on glyphosate would be lifted for the time being. Anvisa would then decide on the chemical&#8217;s safety in the first quarter of 2019, and the ministry would agree not to appeal.</li> <li><strong>Oil &amp; gas.</strong><strong> </strong>The Brazilian government reached on Friday a deal to sell 14.4m oil cargo barrels to Petrobras and French company Total. The deals will span over 36 months. Total will pay BRL 1 above the market price for each cubic meter of oil sold &#8211; which is calculated by the National Petrol Agency.</li> <li><strong>Tariffs.</strong><strong> </strong>U.S. President Donald Trump has allowed relief from steel and aluminum quotes from Brazil, South Korea, and Argentina. Companies can apply for product exclusions based on insufficient quantity or quality available from U.S. steel or aluminum producers, said the U.S. Department of Commerce in a statement.</li> <li><strong>Minimum wage.</strong><strong> </strong>The government has proposed a BRL 1,006 minimum wage for 2019 (USD 248), a BRL 52 bump that would benefit over 45m workers. Meanwhile, President Michel Temer has given up on raising the wages of civil servants, which would severely impact the budget for the next administration &#8211; to be inaugurated on January 1st.</li> </ul> <hr /> <h2>Brazil&#8217;s lackluster GDP growth rates</h2> <p>The Brazilian economy has produced, between April and June, 0.2% more than it did over the year&#8217;s first quarter. The GDP for the last quarter amounted to BRL 1.7 trillion. While the numbers confirm six quarters without negative results, they also prove that the economic recovery has been much, much slower than expected. The growth rate is half of what the government expected some months ago &#8211; the economy was hit by an 11-day truckers&#8217; strike that all but paralyzed the country.</p> <p><img class="alignnone size-full wp-image-24532" src="https://brazilian.report/wp-content/uploads/2018/09/unnamed-27.png" alt="gdp lula" width="1096" height="610" srcset="https://brazilian.report/wp-content/uploads/2018/09/unnamed-27.png 1096w, https://brazilian.report/wp-content/uploads/2018/09/unnamed-27-300x167.png 300w, https://brazilian.report/wp-content/uploads/2018/09/unnamed-27-768x427.png 768w, https://brazilian.report/wp-content/uploads/2018/09/unnamed-27-1024x570.png 1024w, https://brazilian.report/wp-content/uploads/2018/09/unnamed-27-610x340.png 610w" sizes="(max-width: 1096px) 100vw, 1096px" /></p> <hr /> <p><img class="alignnone size-full wp-image-24530" src="https://brazilian.report/wp-content/uploads/2018/09/unnamed-2.gif" alt="gdp" width="1091" height="915" /></p> <hr /> <h2>Electoral Justice system bars Lula from presidential election</h2> <p>August is always a tumultuous month in modern Brazilian politics. It was in August that two of our most emblematic politicians died, with Getulio Vargas committing suicide in 1954, and Juscelino Kubitschek dying in a suspicious car accident in 1976. On August 31, 2016, the Senate impeached Dilma Rousseff &#8211; and exactly two years later, the Electoral Justice system barred Lula from running for president.</p> <h4>The verdict, explained</h4> <p>The electoral justices considered Lula to be ineligible for public office due to his corruption and money laundering conviction by a court of appeals. The so-called Clean Slate Law (which was actually sanctioned by Lula himself, in 2010) establishes that candidates with multiple convictions can&#8217;t run for office.</p> <p>The court also said that Lula can&#8217;t appear on TV and radio ads as a candidate &#8211; having his exposure limited to 25% of each advertisement (the piece that was scheduled for today has been published on YouTube). The Workers&#8217; Party hoped to stall the decision, in order to have Lula vouching for understudy Fernando Haddad, the former São Paulo mayor who remains unknown to most voters around the country.</p> <hr /> <p style="text-align: center;"><em>&#8220;The Clean Record Law was considered constitutional &#8211; and has massive popular support. We are not discussing Lula&#8217;s guilt (or lack thereof), nor questioning his legacy. There is no reason for the Superior Electoral Court to keep the electoral scenario uncertain as it is now.&#8221;</em></p> <p style="text-align: center;"><em><strong>Justice Luís Roberto Barroso, rapporteur</strong></em></p> <hr /> <h4>The Workers&#8217; Party&#8217;s strategy, from now on</h4> <p>With Lula officially out of the running, the party has no option but to officially name <a href="https://brazilian.report/newsletters/weekly-report/2018/08/18/fernando-haddad-polls-lula-understudy/">Fernando Haddad</a> as its official candidate. From now on, Lula&#8217;s name will no longer be on polls. Just like in 2012, when he first ran for mayor, the party will link the candidate to the incarcerated former president &#8211; who has 39% of voting intentions. Party chairperson Gleisi Hoffman, however, wants to insist on appeals and keep Lula as candidate. That is because Mr. Haddad could easily become the party&#8217;s main star outside of prison and increase his control of party bureaucracy.</p> <h4>How the decision affects other candidates</h4> <p>The election has now become even more uncertain &#8211; and five candidates have a chance of reaching the runoff stage, as Mr. Haddad lowers the Workers&#8217; Party&#8217;s poll numbers to just 4%. Center-right Geraldo Alckmin should no longer direct all of his attacks against far-right candidate Jair Bolsonaro, also attacking Mr. Haddad, in an attempt to prevent his growth thanks to the association with Lula&#8217;s image.</p> <p>As counter-intuitive as it may seem, Mr. Bolsonaro could be the worst-affected out of Workers&#8217; Party&#8217;s adversaries. One of the main points of his campaign is being the &#8220;anti-Lula.&#8221; Without the former president, he loses part of his rhetoric.

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Weekly ReportSep 01, 2018

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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.