Brazil’s Supreme Court against fake news—or against the news?

Author

Gustavo Ribeiro
April 16, 2019 • Reading Time: 7 minutes

Good morning! In today’s issue: Brazil’s Supreme Court moves to censor the press. Pension reform fails its first test. Brazilian economy could have negative quarter.

Brazil’s Supreme Court against fake news—or against the news?

On March 14, the Supreme Court opened an investigation into the spreading of fake news and intimidating messages against its members. Since yesterday, the court has been acting against its detractors. Justice Alexandre de Moraes, who oversees the case, reportedly ordered 10 search and seizure operations against people accused of promoting the shutdown of the court—including retired military officers and prosecutors.

The court also censored a report by Crusoé, an online magazine, linking Chief Justice Dias Toffoli to construction company Odebrecht. Former CEO Marcelo Odebrecht told Operation Car Wash investigators that a codename mentioned in emails referred to Dias Toffoli (see document below). Justice Moraes called the story a “textbook example of fake news”—although the concept doesn’t exist in Brazilian law. He ordered the publication to remove the story or pay a BRL 100,000 fine for every day it remains online, and summoned the reporters to provide depositions.

The Supreme Court’s actions in this case are worrisome, to say the least. The court is acting as judge, jury, and executioner—filing the case, leading investigations, and issuing the final decision. By ordering the censorship, the Supreme Court achieved a rare feat: uniting people from the far-left to the far-right against it. Last year, Congressman Eduardo Bolsonaro defended shutting down the court using “one private and one corporal.”

The case reignited in Congress the idea of launching a parliamentary investigation committee (CPI) into the activities of the upper echelon of the judiciary system. The Senate floor will vote on its creation soon, and supporters of the measure are using yesterday’s actions to whip votes. One congressman said: “If the Chief Justice is innocent, why is he censoring the report?”

Pension reform fails first test

Without making a deal with centrist parties, the government failed its first test in passing the pension reform bill in Congress. The bill was supposed to be voted on by the House’s Constitution and Justice Committee tomorrow, but it has been postponed to next week. Before, the committee voted on (and passed) a bill reducing the government’s power over the federal budget.

Filled with rookie congressmen, President Bolsonaro’s Social Liberal Party (PSL) is being trumped by regimental maneuvers by the opposition (aimed at delaying the pension reform progression). To save face, PSL members voted for the change, trying to pass along the idea that this was what the government wanted from the start.

Congress also reacted badly to the government’s decision to end an 11-year policy of raising the minimum wage above the inflation—impacting pensions directly. The move puts more pressure on the government’s reform, which will demand workers to retire later and contribute more in order to get full pensions.

Government trying to pander to truck drivers

Facing enormous difficulty to tame the rise of diesel prices, the government will announce today a set of measures to improve the general conditions of roadway transportation. Atop the list of actions are slashing bureaucracy for truckers, monitoring up-close whether minimum freight prices are being respected, and stimulating the creation of cooperatives. The government will also promise to finish the works on two major highway projects: the BR-163 (crossing Brazil from south to north—photo), and BR-242 (from Brasília to Salvador).

A press conference is scheduled for this morning, when ministers will also reaffirm actions already taken by the government—such as reducing the number of speed cameras on federal roads and creating a card allowing truckers to purchase fuels in advance at fixed prices.

The government seeks a difficult balance between reassuring truckers that their demands will be heard—but without seeming too interventionist. President Jair Bolsonaro blocked a bump in diesel prices last week, causing Petrobras to lose an astonishing BRL 32bn in market value.

The government sees the fluctuation of fares according to international crude oil rates as inevitable. Therefore, it wants to compensate truckers in other areas and avoid a strike like last year’s, when the country was nearly ground to a halt after 11 days of protests, blocking major highways.

Brazilian economy could have negative quarter

Six months ago, market operators predicted a 3% GDP growth for Brazil this year. Now, it seems more consensual that Brazil will grow at a disappointing rate of 1%. The Central Bank’s Economic Activity Index showed a 0.73% retraction in the economy in February against January, leading banks to forecast a decline of the GDP for 2019’s first quarter—official results will be published on May 30. Here are some forecasts:

  • Fator projects a -0.2% growth rate. Signs of a slowing down economy are found: decreasing energy consumption, lower trust levels, and high industry idle capacity.

  • Itaú changed its forecast from +0.3 to -0.1%. That brought expectations for the year from 2 down to to 1.3%. The bank said there are no signs of improvement in investments and that local industry is stagnant.

  • Mongeral Aegon Investimentos blames the drop in Vale’s mineral production, following the Brumadinho tragedy. The firm expects 0.2% growth for this quarter. “[Even if growth is negative in this quarter] it’s not the end of the world. If Q2 is also negative, then we have a problem,” said chief economist Julio Cesar Barros.

What else you should know today

  • Culture. Over the past decades, Brazil’s state-controlled oil company Petrobras has been one of the largest patrons of the arts. Not anymore. The new board has decided to pull out of 11 cultural projects. The same movement has been observed in public banks, such as Caixa and the National Development Bank (BNDES). 

  • Cargo. Two-thirds of Brazil’s goods are transported by trucks—which has made cargo theft a very profitable business. In 2018 alone, 22,000 such cases were registered, leading to losses of BRL 2 billion. Although high, that number represents a 15% drop from 2017 (when 25,950 cases were registered), thanks to the federal security intervention in Rio de Janeiro. The absence of law enforcement on Brazilian roads is the leading cause.

  • Persona non grata. The American Museum of Natural History announced that it would no longer host a gala to honor President Jair Bolsonaro, after a joint agreement with organizers from the Brazilian-American Chamber of Commerce that it was “not the optimal location.” The museum was blasted for hosting the event celebrating a man seen as an advocate for further destruction of the Amazon and the suppression of indigenous rights.

  • Disease. Dengue fever cases in Brazil jumped 29% in two weeks, from 229,064 on March 16 to 322,199 on March 30—with 86 deaths. The rate is 303% higher than last year, as is the mortality rate. In the same period in 2018, 51 people had died from the disease. The Ministry of Health announced that a project to fight mosquitos transmitting dengue and the Zika virus with the use of specific bacteria is in its final trial phase.

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