1. China offers Brazil USD $100 billion during BRICS summit

The 11th BRICS summit – an association consisting of Brazil, Russia, India, China and South Africa – took place in Brasília and was an opportunity for President Jair Bolsonaro to increase ties with China, despite his strong ties to the U.S. China announced a USD $100 billion investment in the Brazilian government over the next five years for infrastructure partnerships. The amount is higher than the combined total of investments and loans made over the last ten years (USD $90 billion). During the summit, which ended on Thursday, Bolsonaro criticized the low investments offered to Brazil by the BRICS bank, totaling USD $1.1 billion, while other members received USD $2 billion. At the end of the meeting, country leaders avoided discussing the tense situations in Bolivia, Venezuela and Chile and defended improving trade relations between BRICS countries. Bolsonaro has booked a trip to India on January 26th to advance discussions on trade, and cooperation on topics such as biofuels, technology and science.

Folha de S.Paulo: China oferece fundo de US$ 100 bilhões ao Brasil
Valor Econômico: Brics ignora crise em países sul-americanos
Folha de S.Paulo: Guedes fala em livre-comércio com a China, mas recua

2. Bolsonaro leaves PSL and starts his own party

President Jair Bolsonaro has officially announced his departure from PSL (Partido Social Liberal), the party with which he was elected. After a month of internal party conflicts that became public, Bolsonaro has initiated the process to create the party “Aliança pelo Brasil” (Alliance for Brazil). It will be Bolsonaro’s ninth party membership since he became a politician in 1980. Many Bolsonaro supporters from PSL have already joined in and there is a movement to get the R$ 440 million (USD $104.9 million) in party funds transferred from PSL to Aliança pelo Brasil by 2022. During a meeting with PSL members in Congress, Bolsonaro said that they are currently trying to collect 500,000 signatures so the new party can be officially registered. The political organization can only participate in next year’s elections if the registration is complete by April 2020. The first Aliança pelo Brasil convention has been scheduled for November 21st in Brasília. Read the analysis on politics at Brasilia Report.

Valor Econômico: Bolsonaro anuncia saída do PSL e criação de outro partido
O Globo: 26 dos 53 deputados do PSL devem seguir Bolsonaro
O Estado de S. Paulo: Leia o manifesto do partido criado por Bolsonaro
Folha de S.Paulo: Aliados de Bolsonaro buscam o apoio de evangélicos

3. Administration reduces taxes for companies that hire young people

The federal government has created the “Emprego Verde e Amarelo” (Green and Yellow Employment) program, which reduces taxes for companies that hire 18 to 29 year olds. According to the Brazilian Institute of Geography and Statistics (IBGE), which uses a different age grouping – the unemployment rate for people between 18 and 24 years of age stood at 25.8% in the second quarter of 2019, as opposed to 12% for the rest of the country. IBGE has not yet shared data on unemployment by age in the third quarter of this year. The administration also planned to reduce taxes for companies hiring workers over 55 years of age but dismissed the idea. According to the Special Secretary of Social Security and Labor, Rogério Marinho, the administration decided to limit the program to young people due to the country’s fiscal situation. “We had to make a decision and decided to focus on young people, among whom there is a high unemployment rate,” he said.

Folha de S.Paulo: Governo reduz imposto para empresa que empregar jovens

4. Mandatory insurance for victims of traffic accidents ends

The administration has decided to end the mandatory insurance every vehicle owner in Brazil had to pay to cover reparation expenses for victims of traffic accidents, no matter the culprit. DPVAT has existed since 1974 and the mandatory amount vehicle owners had to pay annually was between R$ 16.21 (USD $3.86) and R$ 84.58 (USD $20.15). In a press statement, the administration stated that the decision “will potentially avoid fraud and ease or put a stop to the high costs associated with insurance supervision and regulation.” According to the administration, the decision will not affect victims, who can use the public health system or request Social Security benefits. As this is a measure enforced by preventive measure, the end of DPVAT is already in effect, but must be approved by Congress within 120 days, or it will once again be in force. In the first half of 2019, 155,032 reparations have been paid due to death, disability and hospital expenses. In 2018, the DPVAT collected R$ 4.6 billion (USD $1.1 billion), of which 50% was used to pay reparations, 45% was sent to the public health system and 5% for traffic education programs.

O Estado de S. Paulo: Governo extingue seguro obrigatório de trânsito
O Globo: Para governo sistema era corrupto e ineficiente

5. For the first time – a majority of Brazilian public university students are black

For the first time in history, the majority of public university students in Brazil are black, according to the IBGE. Students who consider themselves to be black or of mixed race represent 50.3% of people enrolled. In 2017, this number was 49%. The increase is still below the demographic data for the country, in which 56% of people are black or of mixed race. According to IBGE, improvements in equality in public higher education are due to the quota system and other programs for increasing access to higher education. However, when looking at data on employment, inequality is still prevalent. According to IBGE, white workers have incomes that are 74% higher on average than the incomes of black workers.

O Estado de S. Paulo: Negros são maioria nas universidades públicas
Folha de S.Paulo: Brancos têm renda 74% superior à dos negros, diz IBGE

Brasilia Report

Click here for the Brasilia Report, a weekly analysis prepared by JeffreyGroup Senior Advisor in Brasilia, Gustavo Krieger.