November 1, 2019


1. Accusation increases tension between Bolsonaro and the press

A gatekeeper claimed that President Bolsonaro had authorized entry of one of the men accused of killing prominent local legislator Marielle Franco and her driver Anderson Gomes into the gated community in which he lived. The accusation made the relationship between the president and the press – especially Rede Globo, the largest broadcaster in the country – even more tense. Rede Globo’s Jornal Nacional – the most popular news program in the country – were the first to air the story. Even though they broadcast excerpts of the gatekeeper’s statement that should have been kept confidential, the news program also revealed that on that day, Bolsonaro, a federal representative at the time, was in Brasília, not in Rio de Janeiro. However, as soon as the story began to spread, the president issued a rebuttal. Bolsonaro said the story was “mean-spirited” and that TV Globo was pressuring him to renew the channel’s license to broadcast on public television. Hours later, the gatekeeper’s statement was dismissed by one of the president’s sons, the Public Prosecutor’s Office and the Attorney General. Bolsonaro doubled down on his accusations against Rede Globo and accused Rio de Janeiro Governor Wilson Witzel of leaking secret information, who denied it. However, the press has raised questions about the investigation, suggesting there was no specialized analysis of the recordings used to dismiss the gatekeeper’s statement. Read about the standoff between the press and politicians in the Brasília Report.

Jornal Nacional: Bolsonaro é citado em depoimento sobre assassinato
Folha de S. Paulo: Ministério Público diz que porteiro mentiu em depoimento
O Globo: Presidente diz que reportagem da TV Globo é canalhice
Folha de S.Paulo: Promotoria não averiguou se provas foram adulteradas
O Globo: Rede Globo afirma que faz jornalismo com seriedade

2. Foreign investors’ trust in Brazil highest in six years

TThe level of trust foreign investors have in Brazil is at its highest point since May 2013. This week, according to the performance of the Credit Default Swap, Brazil’s Country Risk indicator dropped, suggesting that foreign markets are more confident that Brazil can pay its debts. The rate has been dropping since the beginning of the year, but the drop has been sharper since the Senate approved the pension reform. For markets, the new pension rules are key to balancing public debt. Lower interest rates, which dropped a half a percentage point to 5%, also influenced the country’s assessment. Even though things are looking better for Brazil’s economy, the low country risk indicator has not resulted in new investments. Banks believe that the assessment of Brazil will improve every 6 to 12 months.

Folha de S.Paulo: Risco-país é o menor desde 2013
Valor Econômico: Banco Central corta a taxa de juros cai para 5%

3. Government package could give new loan possibilities to states

Jair Bolsonaro’s economy team has established the principal measures to be included in a package designed to contain public spending. Five measures have already been defined: an administrative reform which would reduce salaries and change job stability for new public servants; a reduction of mandatory expenses to generate new investments; a more flexible budget; better division of pre-salt oil royalties between states and cities; and the offer of loans to state governments willing to cut spending. Economy Minister Paulo Guedes plans to send the proposal to Congress later in November. According to the administration, constitutional amendments aimed at controlling expenses with public servants’ salaries alone could save the government R$ 27 billion (USD $6.8 billion). However, Chamber of Deputies President Rodrigo Maia stated that a vote on the issue will only occur in the first half of 2020. “It has to go through committees first. What can I do? If the administration had sent it to Congress in July, we would vote for it this year,” he said.

O Estado de S. Paulo: Guedes formata pacote para conter gastos

4. Saudi sovereign wealth fund could invest USD $10 billion in Brazil

During his trip to the Middle East, President Jair Bolsonaro managed to convince the Saudi monarchy to unilaterally invest USD $10 billion into Brazil. The announcement was made after Bolsonaro met with Saudi Crown Prince Mohammad bin Salman. In a joint statement, they said there was an “agreement” that the Saudi fund will “explore potential mutually beneficial investment opportunities worth as much as USD $10 billion.” The sectors that will benefit will be defined in a joint agreement, but basic sanitation is a likely candidate to receive the funds. According to Chief of Staff Onyx Lorenzoni, who was present at the meeting, the Saudis are planning to access Latin America through Brazil.

Valor Econômico: Fundo saudita pode investir US$ 10 bilhões no Brasil
O Estado de S. Paulo: Dinheiro árabe vai ajudar saneamento, diz governo

5. 24% of Brazilians get distracted by their cell phone at work

A study conducted by Deloitte during the technology fair Futurecom in São Paulo revealed that 24% of Brazilians admit to being frequently distracted by their cell phones during work. Worst: 80% of Brazilians stop what they are doing at least once every hour to take a look at message apps. The poll interviewed 2,000 people from 18 to 55 years old. The poll also shows that half of the people interviewed use their phones always or frequently while talking to friends and family in person. Although people were interviewed during a fair for technology enthusiasts, it shows a trend among the general population. Additionally, the report details that 66% of respondents use their smartphones to work after working hours and 38% admitted to using the device while they drive.

Folha de S.Paulo: Brasileiro para uma vez por hora para espiar celular

Brasilia Report

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