Numbers of the week: Nov. 9, 2019

. Nov 09, 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 in Brazil. This week: The future of small towns, a disappointing pre-salt oil auction, the Supreme Court’s decision of the year, a better expectation for 2020’s GDP, the boom of extreme poverty, Bolsonaro’s link to Marielle’s case. 

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1,217 towns

Is the number of Brazilian towns that may

be made extinct if Congress approves the Federative Pact amendment presented by the Jair Bolsonaro administration this week, <a href="">according to the National Municipalities Confederation</a> (CNM). The bill is one of the three proposes included in the “Mais Brasil” (More Brasil) plan, considered as the most ambitious revamp of the Brazilian state since the 1988 Constitution. The goal is to redefine the financial relations between states, municipalities and the Union, promoting more checks and balances to ensure fiscal responsibility. The extinction of municipalities is one of the most controversial topics, especially on the verge of the 2020 municipal elections. Learn more about the plan <a href="">here.</a></p> <p>The proposal says that towns with less than 5,000 inhabitants that fail to collect at least 10 percent of its revenues through tax shall be integrated into nearby cities with better financial conditions. Per CNM, if these criteria were extended to all of Brazil’s 5,568 municipalities, 82 percent would not meet the tax collection requirements. While there’s no projection of savings from this measure, it is expected to be large, as it would significantly reduce the number of municipal civil servants. However, CNM questions possible negative outcomes of the measure, such as the chance of rural evasion or pushing citizens away from political decisions in towns with a small population but large area, which is common in the North of Brazil.&nbsp;</p> <hr class="wp-block-separator"/> <h2>BRL 69.96 billion</h2> <p>This is how much the Brazilian government raised with its <a href="">pre-salt oil auction</a> on Wednesday, way below the BRL 106.5 billion estimates. Even though it was the biggest oil auction in Brazil’s history,&nbsp; it was considered a flop by analysts due to the lack of foreign interest, as only 7 of the 14 companies that applied showed up to the event, and only two made an offer. Of the four fields put up for sale, only two were sold. Búzios, the most attractive field, was won by a consortium made up of Petrobras (90 percent) and Chinese companies CNOOC and CNODC (5 percent each), while Itapu was fully sold to Petrobras. For both analysts and cabinet members, the high prices demanded by the government—justified by investments already made in the area—the fact that companies would have to negotiate and pay extra compensation for Petrobras due to these investments, and even the production-sharing model adopted in the auction were responsible for pushing foreign investors away. But the auction is set to have political implications as well; the money raised this week will be enough to lift a budget freezing measure established by the federal government, but severely indebted states and municipalities will only receive half of the money they were expecting.</p> <hr class="wp-block-separator"/> <h2>6 v. 5</h2> <p>By a narrow margin, Brazil’s Supreme Court changed its precedents once more and ruled that <a href="">prison sentences in the country may only be enforced after all appeal routes have been exhausted</a>. The decision is being considered by critics as a blow to Operation Car Wash, as the investigation&#8217;s efficiency was boosted by the understanding that convicts could be imprisoned after their sentence was upheld by an appellate court. Now, almost 5,000 convicted felons may be affected by the Supreme Court’s decision. Former president Luiz Inácio Lula da Silva is the most prominent, and he was released from his jail cell in Curitiba late on Friday afternoon. Read more about the political impacts of Lula&#8217;s release in our <a href="">November 8 story.</a>&nbsp;&nbsp;&nbsp;&nbsp;</p> <hr class="wp-block-separator"/> <h2>0.9 percent</h2> <p>Is how much the Brazilian GDP is set to grow in 2019, according to new estimates by the Economy Ministry. The projection represents an advance versus the previous 0.85 percent growth estimate and is the second time the economic team raises its growth expectations for the year after four consecutive cuts. However, the estimate is still way below the 2.5 percent growth foreseen on 2019&#8217;s budget, showing how much trouble the Brazilian economy still faces. For next year, though, the government’s confidence seems much stronger, as it reviewed GDP growth projections upward from 2.17 to 2.32 percent—the biggest since 2013.&nbsp;&nbsp;&nbsp;</p> <hr class="wp-block-separator"/> <h2>4.5 million&nbsp;people</h2> <p>Data from Brazil&#8217;s Geography and Statistics Institute (IBGE) showed that 4.5 million Brazilians feel into extreme poverty during Brazil’s economic recession. That brought the total number of people in Brazil earning less than USD 1.90 per day up to 13.5 million, exceeding the entire population of countries such as Bolivia, Belgium, and Tunisia—being over two times the total number of inhabitants in Denmark. As <a href="">we’ve shown</a>, poverty is also unequally spread in the country, with IBGE showing that over 50 percent of those in extreme poverty live in the country’s Northeast region. Also, there’s a racial bias, as almost three-quarters of those in extreme poverty are either black or <em>pardo</em> (multiracial), disproportionate to their overall share of just above 50 percent of the general Brazilian population. To eradicate extreme poverty in Brazil, it would take only BRL 1 billion per month.</p> <hr class="wp-block-separator"/> <h2>11 months</h2> <p>Inquiry documents show that the Rio de Janeiro Civil Police had records connecting the name of President Jair Bolsonaro to Marielle Franco&#8217;s assassination since November 2018. The investigation found that the Police Homicide Division had had access to the ordinance records since November 2018 as, at the time, Mr. Bolsonaro&#8217;s neighbor Ronnie Lessa was accused of being involved in the left-wing councilor’s murder. Police then had access to the records to investigate the suspect. In October, newscast Jornal Nacional published a report linking President Jair Bolsonaro to the Marielle Franco case. Mr. Bolsonaro denies the accuracy of the report, pointing out he was in Brasília that day—which was reported by Jornal Nacional and backed up by Congress logs. Ronnie Lessa, accused of being the man who pulled the trigger on Ms. Franco&#8217;s execution, lived on the same street as Jair Bolsonaro in Rio de Janeiro. Mr. Lessa&#8217;s daughter even briefly dated Mr. Bolsonaro&#8217;s youngest son. Elcio Queiroz, the man Bolsonaro is alleged to have buzzed into his gated community, was also seen in pictures with the president.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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