October 4, 2019


1. Savings from Pension Reform reduced further

This week, Senators approved the Pension Reform with changes that further reduce the amount of money the administration was hoping to save. Before it was submitted to Congress, the Pension Reform was expected to save around R$ 1.2 trillion over ten years, according to Economy Minister Paulo Guedes. However, the reform approved by the Chamber of Deputies reduced this outlook to R$ 933 million. Now, the Senate has reduced it even further to R$ 800 billion. Soon after the vote, Guedes asked his team to recover “each and every billion” by adjusting federal investments in states and cities. President Jair Bolsonaro admitted that the defeat in the Senate was a disappointment. “I am sorry. The reform had to be approved. There was no other way,” he said. The final vote to ratify the reform should happen before October 16th. Read the analysis of the deadlock between Bolsonaro and Congress at Brasília Report. 

Valor Econômico: Senado aprova reforma desidratada em 1º turno
O Estado de S. Paulo: Guedes manda recuperar ‘cada bilhão’ perdido
Folha de S.Paulo: ‘Eu lamento’, diz presidente após derrota no Senado

2. Federal Supreme Court postpones discussion on annulment of Operation Car Wash convictions

The Federal Supreme Court has decided that Car Wash defendants should have been heard after the accuser’s depositions. However, the court postponed the discussion to define the rules which would allow people who have been convicted to appeal and potentially annul convictions. According to the Justices, trials that did not hear defendants after accusers violated the constitutional right to present a defense and should therefore be annulled and tried again. The ruling is another defeat to Operation Car Wash, once led by former Judge Sergio Moro, now Minister of Justice. The Federal Supreme Court postponed the meeting in which Justices will decide which of the 130 people convicted can appeal to the second half of the month. Former President Luiz Inácio Lula da Silva is one of them. Facing accusations that the Federal Supreme Court is going against Operation Car Wash, the court’s president – Dias Toffoli – grew angry and said that was a “fallacy”. “This Court defends the fight against corruption, but repudiates abuses and excesses,” he said.

Folha de S.Paulo: STF adia definição de erros em julgamentos da Lava Jato

3. Lula might be released, but he demands an apology from prosecutors

Former President Luiz Inácio Lula da Silva is now entitled to day release, a prison regime in which he only sleeps in prison. The request has already been sent to the Federal Prosecutor’s Office. This week, it was announced that Lula could be released from prison on March 22nd. However, what seemed to be reason for celebration soon became a political deadlock. Lula demanded, in writing, that Car Wash prosecutors apologize to the country. According to him, prosecutors must apologize to “the Brazilian people, to the millions of people who are unemployed and to my family for the harm they’ve caused to the democracy, to the justice system and to the country”. However, Lula did not say whether he refuses to pay the R$ 4.9 million fine demanded for using bribe money to renovate an apartment on the coast of São Paulo. If he does not pay, he will not be released. Lula has been sentenced to 8 years and 10 months in prison and has been held at the Federal Police jail in Curitiba since April 7th 2018.

O Estado de S. Paulo: Lula pode ser solto, mas exige retratação

4. Bank is accused of having received privileged information

On Thursday, the Federal Police searched the headquarters of BTG Pactual bank. The bank’s board is accused of having received information from meetings of the Central Bank’s Monetary Policy Committee from 2010 to 2012. The Committee decides, monthly, what the country’s basic interest rate will be and assesses the Brazilian economy which, in turn, affects the financial market. Public agents accused of having shared reports “to obtain mutual illegal benefits” are also under investigation. The investigation began with an accusation by former minister Antonio Palocci as part of a plea deal. He said that banker André Esteves – a partner at BTG Pactual – received privileged information from then Finance Minister Guido Mantega in exchange for bribe money for PT – their party. BTG, Mantega and others who stand accused deny taking part in any illegal activities.

Folha de S.Paulo: PF investiga vazamento de dados para o BTG

5. Automation could put an end to half of the country’s jobs

A study published this week shows that over half of the Brazilian workforce could be replaced by machines within 10 to 20 years. The study by IDados reveals that 58.1% of jobs, employing 52.1 million people, correspond to industries with a high risk of being automated by technologies that are already available. They are jobs that do not require creativity or social-emotional abilities and machines can already replicate the required motor skills for these tasks. The study uses data from the Brazilian Institute of Geography and Statistics and a study by Oxford University. According to the study, jobs including drivers, bus conductors, interviewers for surveys, cashiers in the food industry and even waiters are at risk. On the other hand, jobs that have a lower risk of being automated are hotel managers, psychologists, chemical engineers, jobs in the justice department and veterinarians.

Valor Econômico: Automação pode substituir 58,1% dos trabalhadores

Brasilia Report

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