China bets on VP for closer ties to Brazil

Author

Gustavo Ribeiro
April 08, 2019 • Reading Time: 8 minutes

Good morning. Jair Bolsonaro’s historically low approval rating. China bets on VP for closer ties to Brazil. Lula: one year in prison.

Jair Bolsonaro’s historically low approval rating

Yesterday, Datafolha—Brazil’s most renowned pollster—confirmed what other institutes had already shown:

Jair Bolsonaro is the least popular president after only 3 months in the job. His performance in office is considered to be “good or great” by only 32% of voters—while 30% consider his administration to be “bad or terrible.”

  • Women are more critical of the president, among whom his approval rating drops by 10 percentage points.

  • More educated voters seem split  on Mr. Bolsonaro. It’s among them that he has the highest approval (36%), but also the highest rejection (35%).

  • Among evangelicals, 49% believe Mr. Bolsonaro is authoritarian, 39% that he is not a hard worker, and 37% that he is overly proud.

  • The president’s core of supporters is concentrated among businessmen, people from the countryside, and elderly citizens.

The same poll showed that Brazilians have grown more pessimistic about the country’s economic outlook. Those who believe the situation will improve fell from 65% in December to 50% now. People expecting a worse scenario doubled to 18%.

Mr. Bolsonaro said he wouldn’t “waste any time commenting” on the results, which led political and market analysts to fear that the president could further radicalize his rhetoric. Others fear that, after only 3 months, the president could have lost his power, becoming a “toothless lion.” An analyst compared Mr. Bolsonaro to the Workers’ Party—which traditionally has a similar support rating, but has lost much of its political relevance.

China bets on VP for closer ties to Brazil

Beijing and Brasília have set May 23 as the date for the reactivation of the High-Level Sino-Brazilian Commission—the highest permanent forum for dialogue and bilateral cooperation between the two countries. The committee, which held its last meeting in 2015, will be co-presided by Vice Presidents Hamilton Mourão and Wang Qishan. These meetings have traditionally been the first step before actual policymaking between the two countries. In 2014, it resulted in an accord to increase corn and soybean exports from Brazil.

The meeting will come at a delicate moment for Brazilian trade. China still places restrictions on Brazilian poultry—which could lose market share to the Americans (if China strikes a trade deal with the U.S.), Russia, or France (President Xi Jinping has recently lifted sanitary restrictions on French poultry, Europe’s most competitive). A recent mission of Chinese inspectors found problems in Brazilian factories—and the country will have to respond.

On May 13, Agriculture Minister Tereza Cristina will visit Shanghai and Beijing, hoping to resolve such issues. President Jair Bolsonaro has said multiple times he will visit China this year, but no date has been settled. Mr. Jinping, on the other hand, has confirmed his presence at the next BRICS Summit, to be held in Brasília in November.

Lula: one year in prison

Yesterday marked the one-year anniversary of the arrest of former President Luiz Inácio Lula da Silva. He serves a 12-year sentence for corruption and money laundering—and has since been convicted in another corruption case. The president’s hopes for a release rest on the possibility that one of the country’s two superior courts rule that defendants can’t serve time before exhausting all appeals—but there’s no timetable for a ruling to be made.

Internally, allies in the Workers’ Party believe that Lula will not be able to run for office again. Due to his multiple convictions, he is barred from running until 2038—when he would be 93. And it is highly unlikely that his convictions will be nullified. Moreover, the former president faces another six corruption cases. Still, the Workers’ Party continues to rally around their leader—and Lula continues to exert his influence within the party, sending orders by way of his lawyers.

The Lula Institute, however, is in dire financial straits, having spent vast amounts of its resources on the politician’s defense attorneys. Former federal judge (and current Justice Minister) Sérgio Moro, who convicted Lula, froze almost BRL 10m in assets belonging to the former president, as well as the estate of his late wife, Marisa Letícia. The institute recently raised BRL 624,000 by auctioning autographed photos of Lula.

Brazil caught between Beijing and Washington

Yesterday, President Jair Bolsonaro and his delegation attended a dinner hosted by Brazil’s ambassador to the U.S. The president was sided by his ideological guru, Olavo de Carvalho, and ultra-right agitator Steve Bannon—who talked about Brazil’s need to end its dependence on China. The Asian giant was the most-talked-about subject, with Economy Minister Paulo Guedes repeating a catchphrase the president loves: “China can buy in our country, but not buy our country.”

When it comes to agricultural exports, part of the administration argues that Brazil should create more cooperation deals with the U.S., in order to gain leverage in the global arena. U.S. producers, however, are some of Brazil’s fiercest competitors. The dissonant voice was Agriculture Minister Tereza Cristina, a member of the rural lobby in Congress. She is set to head to China in May, in a bid to increase exports.

Another hot-button issue regards 5G technology and the aggressive dispute between American producers and Chinese giant Huawei. Brazilian diplomats following the presidential delegation fear that Mr. Bolsonaro would be susceptible to a request from U.S. President Donald Trump to ban Huawei’s 5G equipment and infrastructure in Brazil (as Australia and New Zealand have done), which would create tensions with Beijing. Brazil is expected to auction 5G frequencies in March 2020. Huawei’s main competitors right now are Sweden’s Ericsson and Finland’s Nokia.

What else you need to know today

  • Education. Last week, President Jair Bolsonaro said that Education Minister Ricardo Vélez-Rodríguez has “clearly not been a great fit,” and that today the two would meet—in what would be a “make or break” moment. The government could replace Mr. Vélez with someone recommended by allies, in exchange for support for the pension reform. 

  • Credit.Today, President Bolsonaro will sanction a law creating a national database of “good payers”—that is, people who pay their debts without delays. Today, databases exist only for “bad payers.” The measure’s backers say it will lower interest rates by reducing banks’ risks when lending money. However, financial institutions won’t need authorization from people to include their names on the list, which could directly clash with Brazil’s data protection law, to be enforced in 2020.

  • Priorities.A survey sponsored by Oxfam and conducted by Datafolha showed that 8 in 10 Brazilians believe that the country’s progress is tied with reducing inequality. Brazilians believe that the best course of action is, in order: fighting corruption, investing more in healthcare, and in education. For 28%, having a religion is more important than studying for having a better life.

  • Delocalization.Johnson & Johnson’s Brazilian operation has started to transfer part of its medical device division to Colombia. The company denies that it is undergoing restructuring, but employees have already been warned that cuts will be made. J&J employs almost 7,000 people in Brazil.

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