🇨🇳 Belt and Road time

Good morning! This week, Brazil to join China’s Belt and Road Initiative. A map of the country’s criminal trends. And how costly is Brazil’s trash bill?

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Brazil to join China’s Belt and Road Initiative, officials say

Brazilian Vice President Geraldo Alckmin and Chief of Staff Rui Costa will be in China this week to “finalize the inclusion of Brazil in [China’s] Belt and Road Initiative,” as Congressman José Guimarães, the government’s House whip, announced on social media. 

• The move should happen in the upcoming meeting of the Sino-Brazilian High-Level Commission for Consultation and Cooperation, and will be a key milestone in bilateral relations — which reach their 50th anniversary this year. 

Mum’s the word. The federal government, however, did not make any mention of the Belt and Road Initiative in its communiqué about Messrs. Alckmin and Costa’s trip.

 Why it matters. The Belt and Road Initiative is a massive infrastructure project that aims to stretch around the globe. The Council on Foreign Relations highlights that some analysts see it as a disturbing expansion of Chinese power, with the U.S. having struggled to offer a competing vision.

State of play. According to the Green Finance and Development Center, 22 Latin American countries are formal participants of the initiative. 

• A study by Boston University’s Global Development Policy Center shows that, from 2008 to 2021, China’s development finance institutions supplied about USD 130 billion in loans to Latin American countries.

• The same study says “Chinese finance has contributed to economic growth” and “played a crucial role in filling infrastructure and industrial investment gaps.” 

• On the other hand, it has “also been associated with social, environmental, and economic risks.”

Brazil and China. Brazil had so far refrained from formally joining the initiative, despite being the recipient of massive Chinese investment. According to Mr. Guimarães, Brazil’s Belt and Road membership will focus on technology transfers and initiatives to fight hunger.

Diplomacy. If confirmed, Brazil’s Belt and Road membership would be another step in bringing Brasília closer to Beijing. As we have explained, President Luiz Inácio Lula da Silva bets that the world will grow increasingly multipolar, and he wants to foster good relations with rivals of traditional Western allies.

Brazil’s crime hotspots

The Justice Ministry launched Brazil’s Security Map including 2023 crime data for the entire country. Surveys such as these are fundamental in the formulation of public policy and other actions aimed at reducing crime, which depend on reliable and robust evidence.

Yes, but … While several key indicators improved from 2022, the number of unsolved deaths has ballooned, up by over 41 percent from 2022 — a testament to police shortcomings.

 Why it matters. Security issues are arguably the biggest stain on Brazil’s international image, hindering tourism and investment.

Leaders. Rio de Janeiro, Brazil’s most famous city, leads in the absolute number of murders, attempted murders, and femicides. It is second in murder during robberies and deaths in traffic, trailing only the much larger São Paulo in both categories.

The geography of violence. When we consider crime rates according to a state’s population, we see that the problem is more acute in the North and Northeast — the two poorest regions in Brazil. 

• Brazil’s biggest organized crime factions have occupied towns in the interior of the North and Northeast, where the police presence is low, and they are more able to establish territorial dominance without confronting security forces.

Markets

Brazil dropped from third to seventh place in a list of the most complicated jurisdictions in which to do business, according to consultancy firm TMF Group. However, TMF says the improvement is more down to increased complexity in other jurisdictions than to major changes in Brazil. 

• “The main complexity factors in the Brazilian economy include tax legislation, characterized by local variations, and the diversity of laws at different administrative levels,” TMF said.

Chart of the week: Trash talk

Brazil generates roughly 80 million tons of solid waste each year, enough to fill Rio de Janeiro’s iconic Maracanã stadium 2,000 times over. However, only 3 percent of the country’s urban waste is recycled. The costs of all failures in waste management, combined with the environmental and climate costs of pollution and the respective damage to biodiversity and human health, reached BRL 97 billion (USD 18.49 billion) in 2020.

Stories we’re following

Brazil will announce its Q1 GDP growth numbers tomorrow. Itaú BBA expects the economy to have grown by 2.3 percent annually (0.7 percent from Q4 2023).

The Senate is expected to approve Mover, the government’s program to produce safer and less polluting cars. The bill includes a rider creating a 20 percent import tax on small-value international purchases, as local retailers complain of unfair competition from Asian e-commerce platforms.

Supreme Court Justice Cármen Lúcia takes office as Brazil’s new chief electoral justice this evening, replacing Justice Alexandre de Moraes — whose actions against disinformation turned him into a lightning rod for far-right vitriol and sparked accusations of abuse of power.

The Guaíba River, which runs through Porto Alegre, is down to its lowest level in a month. Multiple areas of Brazil’s southernmost state Rio Grande do Sul should see rain this week, but at low volumes. Officials updated the death tally of the floods to 172. 

In case you missed it

Lawmakers delivered more congressional defeats to the Lula administration by striking down the president’s veto of provisions that included elements of the far-right’s culture war in the Budgetary Directives Law. 

 Brazil’s public debt reached rose to 76 percent of GDP and reached a nominal high of BRL 1.04 trillion. Part of the reason for the rise is the fact that Brazil has endured sky-high interest rates for years — the benchmark rate currently sits at 10.5 percent.

Anac, Brazil’s civil aviation agency, is expected to publish this week its call for proposals around the construction of vertiports, which are designed for the vertical take-off and landing of aircraft such as eVTOLs (electric vertical take-off and landing).

In a securities filing, Gol Airlines informed that its parent company, Abra, “has begun discussions with Azul to explore business opportunities.” The move comes amid rumors that Azul is trying to take over Gol after the latter entered a Chapter 11 bankruptcy protection process in the U.S.

Brazil named Frederico Meyer to the UN Disarmament Commission, leaving the post of ambassador to Israel vacant. Brazil and Israel have been at odds for months, as Brasília is highly critical of Israel’s offensive in Gaza.

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