January 10, 2020


1. Bolsonaro won’t attend Davos due to security issues, opts to send Guedes

President Jair Bolsonaro has cancelled his participation in the World Economic Forum for security reasons. Officially, the administration has not confirmed that the U.S.-Iran crisis is the reason behind the decision. However, Bolsonaro himself said that the escalation of tension between the countries could lead to him cancelling the trip. The U.S. military strike that resulted in the death of Iranian General Qassem Soleimani received Bolsonaro’s support. The president said he supports “any country in the world that fights terrorism.” The statement caused problems in the diplomatic relationship between Iran and Brazil. Economy Minister Paulo Guedes will represent Bolsonaro in Davos, Switzerland, on January 20th. Executives from multinational companies have already requested meetings with the minister, who will also meet the CEOs of Chevron, ArcelorMittal and the Canadian Pension Investment Board. Learn more about the diplomatic issues at Brasília Report.

O Globo: Bolsonaro apoia EUA e cancela viagem por motivo de segurança
Folha de S.Paulo: Bolsonaro apoia ataque dos EUA e cria embate com Irã
O Globo: Paulo Guedes vai representar Brasil em Davos

2. Biggest road auction in Brazil has profit of 7.209%

The biggest auction for road concessions to private companies ended with a bid 7,209% higher than the minimum bid. The São Paulo state government was asking for a minimum of R$ 15 million (USD $3.7 million) for the management of 1,273 kilometers of road for 30 years. A consortium formed by managing company Pátria and GIC Private Limited (Singapore’s sovereign wealth fund) bid R$ 1.1 billion (USD $268.97 million) to win the auction. The second highest bid was R$ 527 million (USD $128.9 million). At the beginning of 2019, the state was hoping to raise R$ 2 billion (USD $489.05 million) with the concession but reduced the minimum bid due to the expectation of large investments by the winning company. According to the contract, the winning consortium will have to invest R$ 14 billion (USD $3.4 billion) in construction works, widening 600 kilometers of road.

Valor Econômico: Consórcio oferece ágio de 7.209% por estradas de SP

3. Former Nissan CEO criticizes lack of help from Brazilian government

Brazilian Carlos Ghosn – former CEO of Nissan and Renault accused of embezzlement and false accounting – criticized the failure of the Brazilian government to offer him support abroad. Ghosn was arrested twice in Japan and released on bail before escaping to Lebanon on December 29th. Known as one of the most successful executives in the auto industry, Ghosn is accused of using R$ 18 million (USD $4.4 million) from a Nissan subsidiary to buy luxury real estate in Rio de Janeiro and Beirut. He said he left Japan “to prove his innocence,” claiming he is “a victim of a company plot.” He says he did not escape justice. “I fled injustice [in Japan] and political persecution,” he says, adding that he expected “a little more help” from the Brazilian government. According to Ghosn’s sister, President Jair Bolsonaro did not discuss the case when he met with Japanese prime minister Shinzo Abe. “Brazil pretended they were not involved. They prefer to abstain and not take risks, unlike Lebanon,” she said.

Folha de S.Paulo: Ghosn foge para o Líbano e critica Brasil
Folha de S.Paulo: Entenda as acusações contra o executivo

4. Brazil is the world’s third largest incubator of unicorn companies

Brazil has the third largest number of unicorn companies in 2019. According to a report by American website Crunchbase, only the United States and China had a larger number of companies valued at USD $1 billion or above. The U.S. is the ranking leader with 78 companies, followed by China, with 22. Brazil is tied with Germany with 5 companies. Internationally, 142 startup companies are classed as unicorns. However, the number is lower than the 2018 all-time high of 158 companies. Total investments also dropped to USD $85.1 billion from USD $139 billion. According to the report, 84% of billion-dollar companies were created by men only, 4% had all female founders and 12% had at least one female co-founder.

O Estado de S. Paulo: Só EUA e China tiveram mais unicórnios que o Brasil

5. Once again, Minister of Education makes spelling mistakes

Brazilian Minister of Education Abraham Weintraub was once again the subject of negative news stories. In a tweet, the minister wrote the word “imprecionante” instead of the correct “impressionante,” meaning “impressive.” The spelling mistake happened on Wednesday, when Weintraub replied to a post by Eduardo Bolsonaro – the president’s son – about investments in research on security. “Dear @BolsonaroSP, thank you for your support. More ‘imprecionante’ (impressive): There was no research being made on public security. Now, Masters, PhD and Post-doctoral researches will receive scholarships to study,” he wrote. The post was deleted minutes later. In August, the minister wrote the word “paralização” instead of the correct “paralisação” (paralyzation) twice in an official document. The mistake was even mentioned by The Guardian, which published a story on the Minister’s public humiliation.

O Estado de S. Paulo: Ministro da Educação escreve “imprecionante”
The Guardian: Ministro da Educação de Bolsonaro é ridicularizado

Brasilia Report

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