September 6, 2019


1. Senate to vote on pension reform bill next week

The Senate Constitution and Justice Committee has approved the main text for the pension reform. However, the amendment will only save R$ 870 billion (USD $213.7 million) over ten years instead of the R$ 933.5 billion (USD $229.2 billion) stated in the text that was previously approved by the Chamber of Deputies. This occurred as a result of the committee accepting nine amendments out of the 486 presented by the senators. One of the main changes is the decision that no pension can earn less than the minimum wage (R$ 998 per month, USD $245.22). The previous version of the text only gave this benefit to people with an income below the wage floor. According to Senate President Davi Alcolumbre, there are ongoing negotiations to bring the first vote on the proposal forward to next week, instead of on the 24th. The Senate is also discussing a constitutional amendment on rules for the retirement of municipal and state public servants. If approved, this amendment will have to be approved by representatives as well.

Valor Econômico: Comissão aprova menos economia com Previdência
O Estado de S. Paulo: Senado quer antecipar votação da Reforma da Previdência

2. August sees record outflow of foreign capital from the Brazilian stock market

In August, the São Paulo Stock Exchange registered a record outflow of foreign capital in the past 23 years: R$ 10.8 billion (USD $2.65 billion). Analysts see the results as a global movement to avoid risks. During the month of August, stock purchases amounted to R$ 190 billion (USD $46.7 billion), while sales reached R$ 200.8 billion (USD $49.3 billion). From January to August, the Brazilian Stock Exchange registered a net outflow of R$ 21.2 billion (USD $5.2 billion). According to market analysts, the movement observed last month is atypical but, due to the global recession caused by the trade war between the U.S. and China, expectations for the inflow of foreign capital into the Brazilian market in the short-term are not positive. Specialists say that local investors might bear the brunt of the responsibility for keeping Ibovespa high due to the Brazilian basic interest rate – which has reached its lowest point in history.

Valor Econômico: Saída mensal de capital externo na bolsa é recorde

3. Sergio Moro approval higher than Bolsonaro

Former judge in Operation Car Wash and current Minister of Justice and Public Security Sergio Moro has a higher approval rate than President Jair Bolsonaro. A poll by Datafolha shows that Moro has the support of 54% of the population, who see his work as good or great. Another 24% of people believe he is an average minister and 20% think he is bad or terrible. Even though they have different positions in the administration, the same polling institute revealed that Bolsonaro has the approval of just 29% of the people, while 30% view him neutrally and 38% disapprove of his government. During his involvement in a number of disputes with the President, Moro had his impartiality as a judge questioned by a series of journalistic reports. He is accused of bias in his sentencing of politicians and executives involved in Operation Car Wash. The former judge denies the accusations. The president also directly criticized Moro and said that he is not “politically savvy” – sending a message to those who say the minister has the potential to be a presidential candidate. Bolsonaro also said that Moro is unlikely to be approved by the Senate for a position on the Federal Supreme Court, which will have an opening next year.

Folha de S.Paulo: Moro supera aprovação a Bolsonaro em 25 pontos

4. President criticizes ministers and sees no chance for Doria in 2022

his week, an interview with President Jair Bolsonaro in Folha de S. Paulo caused a stir in national politics. When questioned about a possible presidential candidacy by Sergio Moro, Bolsonaro called the Minister of Justice “naïve” when it comes to politics. He then described Economy Minister Paulo Guedes as lacking any political abilities. The President also announced that he will run for re-election. When questioned about the prospect of a race against São Paulo Governor João Doria, Bolsonaro said that the politician has no chance in a presidential election because he is “a premature ejaculation.” During the interview, the president mentioned some of the things that he will say in his speech at the UN’s General Assembly, which will take place in New York on the 24th. According to Bolsonaro, his speech will be assertive about Brazilian sovereignty and patriotism. “And I’ll talk about the Amazon,” he said. Read the analysis on the political situation for 2022 at Brasília Report. 

Folha de S.Paulo: Bolsonaro diz que candidatura de Doria é ‘ejaculação precoce’

5. Bolsonaro chose prosecutor to move on with important construction works

On Thursday, without much ado, President Jair Bolsonaro chose the new Prosecutor General of the Republic. Augusto Aras was not on the list of names nominated by prosecutors. He will be questioned by the Senate and will have to be approved by Congress before taking over the job. The President’s nomination annoyed prosecutors. Traditionally, the head of state selects the Prosecutor General from a list of three names sent by the sector. Bolsonaro’s choice already seems to have his plans laid out. According to interviews and people close to Aras, the prosecutor plans to de-bureaucratize large infrastructure projects during his mandate. Prosecutors are permitted to rule on matters related to big construction works, usually due to environmental issues. Aras also thinks that it is his job, as head of the Federal Prosecution Office, to build alliances and change the opinion of the department when it comes to strategic projects. Amid criticism from his supporters on social media, Bolsonaro asked for patience. “I chose someone I can believe in. Give the man some time to get in the game and show what he can do,” he said.

O Estado de S. Paulo: Bolsonaro ignora lista e escolhe novo PGR sob críticas
Valor Econômico: Novo PGR promete destravar obras de infraestrutura no país

Brasilia Report

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