September 18, 2020


1. Bolsonaro gives up on Renda Brasil, backs down and leaves the matter to Congress

This week, another presidential back and forth affected the administration’s economy team. Less than 24 hours after “forbidding” discussion of Renda Brasil, Jair Bolsonaro backpedaled and authorized Congress to find a solution to increase the offer of Renda Mínima, a benefit program for vulnerable families. Bolsonaro shut down the program after the Ministry of Economy had suggested freezing pensions and cutting benefits for low-income people with disabilities, which would generate an extra R$ 10 billion (USD $1.89 billion) a year for the administration.

Renda Brasil – originally planned to be the Bolsonaro administration’s “social flagship” – is now in the hands of Senator Marcio Bittar, rapporteur of the 2021 budget. Bittar says that he will not yet reveal where the money to increase the payment of benefits to low-income families will come from. He promised to present his proposal for the benefit by Tuesday. However, legislators are worried that they will have to bear the burden of approving harsh measures while the president gets the glory of helping the poor.

UOL: Após veto, Bolsonaro volta a estimular Renda Brasil
Folha de S.Paulo: Governo quer cortar R$ 10 bilhões de idosos e deficientes pobres

2. Administration negotiates with Congress on new proposal to pardon church debts

President Bolsonaro vetoed a proposal to pardon the R$ 1 billion debt that churches owe to the Brazilian tax administration and exempt them from the future social contribution on net profits. However, Jair Bolsonaro encouraged Congress to find an alternative to the proposal. The president said he could not legally approve the exemption, as he would be breaking Brazil’s fiscal responsibility laws, which could lead to an impeachment process. Churches are exempt from paying taxes except for pension contributions and contributions on net profit. The government has discovered frequent illegal maneuvers to avoid payments.

Evangelicals are the most loyal supporters of the Bolsonaro administration and backed his presidential campaign. They tried to dissuade the presidential veto. On Wednesday, during a lunch between the president and representatives of the Evangelical Parliamentary Front, Bolsonaro stated that he would support a congressional veto. Congress has until the end of October to decide on the matter. According to an official estimate, giving full amnesty to churches – as suggested by the proposal – would lead to an annual loss of R$ 2.9 billion (USD $546.6 million) in federal revenue.

O Estado de S. Paulo: Bolsonaro veta anistia para igrejas
O Estado de S. Paulo: Presidente defende derrubada do veto pelo Congresso

3. Petrobras announces it will cut up to USD $24 billion in investments

Petrobras announced that it will cut up to USD $24 billion in investments from 2021 to 2025. The planned investment for the period – between USD $40 billion and USD 54 billion – is much lower than the USD $64 billion proposed in their 2020-2024 plan. The investment plan for oil exploration and production was approved on Monday and plans to increase the resources available from pre-salt activities from 59% to 71%. The state-owned company said that the changes are due to smaller price projections in the market caused by the coronavirus pandemic.

Following the impact of the devalued Brazilian Real, the company will delay or cancel some projects, optimize production and sell assets in order to reduce their gross debt from nearly USD $91 billion to USD $60 billion (estimated amounts from the end of the first half of 2020). This was the second cut in investments made by the current administration, having cut 10% last year. In a press statement, Petrobras reaffirmed its strategic pillars and said that it will continue “with the goal of generating sustainable value to its stakeholders.”

Folha de S.Paulo: Petrobras anuncia corte de investimentos

4. NGOs, banks, agribusiness representatives and scientists create pact against deforestation

Nearly 230 representatives from different sectors of society have created a list of proposals for the government to curb deforestation in the country. Coalizão Brasil Clima, Florestas e Agricultura (Brazilian Coalition for the Climate, Forests and Agriculture) – formed by banks, agribusiness representatives, NGOs and scientists – demands increased surveillance, the cessation of land regularization in areas deforested after July 2008, financing of social-environmental criteria and designating over 24 million acres as protected land and for sustainable production.

The group, which combined a number of initiatives that had been organized separately, involved Vice President Hamilton Mourão – who is responsible for the Legal Amazon in Brazil. The movement was also mentioned in the foreign press, as European countries demand rigorous commitment against deforestation or commercial relations with Brazil could be affected. This will set the tone for President Jair Bolsonaro’s speech in the virtual UN General Assembly on Tuesday. In the past few weeks, forest fires have spread out of control, especially in the Pantanal region.

Folha de S.Paulo: Agronegócio, ONGs, bancos e cientistas pedem redução do desmatamento
O Globo: Europeus cobram medidas firmes contra desmatamento
Valor Econômico: Mourão reage a críticas de países europeus
O Estado de S. Paulo: Cúpula do governo discute pedidos da Coalizão Brasil

5. Presidents of the Federal Supreme Court and the Chamber of Deputies test positive for COVID-19; disease spreads among the wealthy in São Paulo 

At least six members of the government have tested positive for coronavirus following the inauguration of new Federal Supreme Court President Luiz Fux last week. Along with Fux himself, the President of the Chamber of Deputies Rodrigo Maia has also been diagnosed with the virus. Guests including the President of the Superior Labor Court Maria Cristina Peduzzi, two ministers of the Superior Court of Justice – Luis Felipe Salomão and Antonio Saldanha – as well as the Prosecutor General Augusto Aras have also tested positive. Out of the 250 seats available during the inauguration at the Federal Supreme Court, only 50 were used.

The country is still showing signs of a sustained drop in the number of daily cases and deaths from to the coronavirus. In order to confirm that the contamination rate is indeed declining, the number of daily deaths and new cases must continue to drop. In the city of São Paulo, the fifth phase of the serological analysis of people over 18 years of age revealed that 1 in every 10 people living in wealthier areas of the city have or have had the disease. The disease prevalence rate went from 5.2% to 10% in August. The country has registered over 135,000 deaths due to the virus and 4.4 million confirmed cases.

G1: Autoridades confirmam coronavírus após posse no STF
O Estado de S. Paulo: Covid-19 avança em bairros nobres de SP
O Globo: Acompanhe notícias sobre a pandemia
IRRD Covid-19: Veja o mapeamento de casos no Brasil e no mundo