Numbers of the week: Oct. 26, 2019

. Oct 26, 2019
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This is Brazil by the Numbers, a weekly digest of the most interesting figures tucked inside the latest news about Brazil. Random numbers that help explain what is going on around the country. This week: Brazil’s environmental woes; Country risk is down; Bolsonaro’s illegal campaign funds; How Brazilian investors behave.

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BRL 59 billion in unpaid fines

According to a recent report

by <em>The Intercept</em>, Brazil&#8217;s environmental agency Ibama issued over 603,400 fines since January 1980 (one of them, worth BRL 10,000, was slapped on President Jair Bolsonaro, who in 2012 was caught <a href="">illegally fishing</a> in an environmental reserve). The fines add up to BRL 75 billion when adjusted for inflation, but a total of BRL 59 billion remains unpaid. This much money is equivalent to 21 times the annual budget for the Environment Ministry. Norte Energia, the company responsible for the construction of the <a href="">Belo Monte hydroelectric power plant</a>, accumulates 36 fines alone, worth over BRL 106 million. Companies are able to delay court cases without paying their dues for years—sometimes decades—thanks to a myriad of legal loopholes. According to the World Wide Fund for Nature, an NGO, the data shows an excessive &#8220;administrative delay&#8221; in Brazil&#8217;s justice system when it comes to deciding on environmental matters.</p> <script src="" type="text/javascript" charset="utf-8"></script> <hr class="wp-block-separator"/> <h2>42,000 new millionaires</h2> <p>We at <strong>The Brazilian Report</strong> have revealed how <a href="">Brazilians&#8217; purchasing power has deteriorated</a> over the past decade—with one exception: the super-rich. That finding has been corroborated by a recent study published by Credit Suisse, showing that the country has gained 42,000 new millionaires (that is, people with over USD 1 million in assets). Overall, 319,000 adults in Brazil are in the million-dollar club. Meanwhile, inequality has increased in the country, with the top 1 percent concentrating 49 percent of all family wealth in Brazil. That is more than the global average, as the top 1 percent of the world detains 44 percent of the global wealth.</p> <hr class="wp-block-separator"/> <h2>126-point CDS</h2> <p>At 126 points, <a href="">Brazil’s 5-year Credit Default Swaps</a> (CDS)—commonly called the country’s “risk level”—is at its second-lowest mark since 2013, higher only than levels from September 19. Brazil&#8217;s CDS continues hovering around the region it had when the country had an investment grade from all major rating agencies, and had been decreasing for 13 days straight—a record since 2004. This week, markets got excited by the approval of the pension reform by the Brazilian Senate, allowing the federal government a BRL 800-billion cut in expenses over ten years. That optimism, combined with a favorable international scenario (with easing tensions in the <a href="">U.S.-China trade war</a> and the prospect of a Brexit deal), allowed the Brazilian benchmark stock market index to record three straight <a href="">record-breaking sessions</a>.&nbsp;</p> <hr class="wp-block-separator"/> <h2>6 and a half months</h2> <p>Earlier this year, reporter Natália Scalzaretto investigated <a href="">why Brazil has so few retail investors</a>. She said: &#8220;Brazil’s historically unstable economy leads people to sacrifice possible gains for the comfort of not risking their capital.&#8221; Another piece of data, provided by a study carried out by Cedro Technologies, a company that develops software for finance firms, shows how immature the Brazilian investment scene remains. Brazilian retail investors still seek short-term gains—staying active in the stock market for an average of only 6 and a half months. That time doesn&#8217;t allow for any significant results in investments. Furthermore, a lack of financial education (which <a href="">Brazil will include in school curriculums</a> starting in 2020) makes Brazilians particularly vulnerable to <a href="">get-rich-quick ads</a>.</p> <hr class="wp-block-separator"/> <h2>229 locations, 14 conservation units, 60,000 affected fisherman</h2> <p>The tragic oil spill haunting Brazil&#8217;s Northeastern coast once again makes it into &#8216;Brazil by the Numbers,&#8217; with the <a href="">environmental disaster</a> getting even worse. Now, at least 229 locations have been affected, including 14 conservation units. The latter areas are particularly important for their key role in ensuring marine biodiversity. One of the affected areas is the biggest manatee sanctuary in Brazil, located on the Alagoas coast. These locations also have huge economic importance, as they double up as fishing areas. On Friday, President Jair Bolsonaro <a href="">tweeted</a> that BRL 59.9 million will be used to compensate 60,000 fishermen who have temporarily lost their source of income. The Brazilian government has been criticized for <a href="">not acting fast enough</a> to control the spill and mitigate its effects.</p> <script src="" type="text/javascript" charset="utf-8"></script> <hr class="wp-block-separator"/> <h2>BRL 915,400 in suspected illegal funds</h2> <p>News website <em>Vortex Media</em> published a <a href="">story</a> showing that at least BRL 915,400 from the Social Liberal Party&#8217;s bank accounts were used to illegally pay for expenses of Jair Bolsonaro 2018 presidential campaign. In theory, the case could put both Mr. Bolsonaro and the party in trouble with the electoral justice system—with the ultimate possibility of him having his electoral victory vacated, albeit a highly unlikely scenario. In just 20 years of existence, the president&#8217;s Social Liberal Party has a habit of <a href="">not complying with Brazil’s electoral rules</a>—which is surprising, as authorities are known for being extremely lenient towards political parties. Between 1998 and 2013, nine of its 16 annual accounts were rejected by electoral courts—only two passed Brazil’s low standards, and five were approved “with caveats.”

Gustavo Ribeiro

An award-winning journalist, Gustavo has extensive experience covering Brazilian politics and international affairs. He has been featured across Brazilian and French media outlets and founded The Brazilian Report in 2017. He holds a master’s degree in Political Science and Latin American studies from Panthéon-Sorbonne University in Paris.

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