Informality advances in Brazil; low wages are now the norm in the country

High informality and low wages were the labor market scenario in Brazil in 2019. A survey by Pnad (National Household Sample Survey) indicated that unemployment fell, but with increasing informality and falling average incomes.

According to the Underground Economy Index, calculated by the Brazilian Institute of Economics of FGV (Fundação Getúlio Vargas), informality is still responsible for a significant portion of the Brazilian economy, having moved R$ 1.2 trillion in the 12 months between June 2018 and June 2019, equivalent to 17.3% of Brazilian GDP. This is the highest value in the last eight years. The growth in informality also increases the production of goods and services that are not declared to the government and the tax evasion of the country. In the 12 months between June 2018 to June 2019, the index advanced 0.1%.

This scenario is strengthened by the emergence of new forms of work, with applications that stimulate informality and expand the outsourcing of employment in Brazil.

According to the Institute of Applied Economic Research (Ipea), informal job vacancies are responsible for much of the small generation of jobs in recent years in Brazil. Currently, the country has over 11 million unemployed. Still, according to Ipea, these new informal jobs are behind the drop in productivity and the slow recovery of the Brazilian economy after the recession from 2014 to 2016.

Another problem produced by the high informality in Brazil is the reduction in the level of social security contributions, which worsens the country's fiscal issue. In addition, informality puts people in a situation where there is no fixed income, which limits their access to credit. In informal work, the worker also loses access to any kind of legal protection, does not receive vacation, meal vouchers or transportation allowance, benefits that formal work provides.

Currently, according to IBGE data, Brazil has 38.8 million informal workers. This total is 41% of the total employed persons in Brazil (93.8 million), that is, they represent 4 out of 10 Brazilian workers.

Even with a 29.5% increase in the number of fires in the Amazon, the number of fines imposed by IBAMA in 2019 in Brazil is the lowest in the last 15 years

As published by the G1 website, a survey by the Observatório do Clima based on data from the Brazilian government indicates that amid the 29.5% increase in deforestation and increasing Amazonian burning in 2019, the fines filed by the Brazilian Institute Environment (Ibama) went against environmental crimes. The infraction notices registered from January to November 2019 are the lowest in the last 15 years.

These areas, for the most part, are “forests are public, that is, it is the heritage of all Brazilians, which is illegally dilapidated to be in the hands of a few,” according to Ipam executive director André Guimarães.

Also according to an analysis by the Amazon Environmental Research Institute (Ipam), 35% of the deforestation that occurred in the Amazon between August 2018 and July 2019 was recorded in unassigned areas and without information. According to Ipam, 35% of the deforestation that occurs in the Amazon is the result of land grabbing. In 2019, the devastation was the biggest in ten years and had the biggest high of the century.

Selic reaches 4.5% per year, the lowest level in history in Brazil and generates demand for new applications; meanwhile, Brazilian consumer continues to pay 300% interest on credit card per year

The Brazilian Central Bank cut the Selic rate by 0.50 percentage points to 4.5% per year. This is the lowest level in the history of the basic interest rates of the Brazilian economy. Now, Brazilian financial market experts point out that traditional investments such as savings, and Selic-linked Treasury Direct bonds are expected to post negative returns.

Currently, in Brazil, 85% of the current account balance is concentrated in four large banks. This oligopoly of banks forced the overdraft limit to the absurd levels that are in force today in Brazil.

According to the master of economics from the University of São Paulo, Mauricio Gutemberg, as there is no broad and significant competition in the financial sector in Brazil, market forces do not produce a balance. Instead, what you see is interest rates on your credit card and overdraft that are way above any acceptable level.

It was trying to reduce these abusive interest rates that the Brazilian Central Bank decided to limit interest on overdraft. From January 6, 2020, they will be at most 8% per month. With this, the annual interest will have a ceiling of 150% in Brazil. Today, the average rate is over 300% per year.

Brazil falls in UN human development ranking

In 2018, Brazil lost a position in the global ranking of the Human Development Index (HDI). The overall grade for the country was 0.761, up 0.001 from the previous year. Despite the advance, Brazil fell from 78th to 79th place in a group of 189 countries. Thus it was the same position of Colombia and behind countries like Sri Lanka and Argentina.

The Index, released by the United Nations Development Program (UNDP) from health, education and per capita income data, shows that Brazil is a country with no long-term planning. The country is positioned worldwide as a supplier of commodities: oil, soy, meat, sugar cane, iron ore etc. There are no long-term projects to improve income distribution, create jobs and advance education.

Incidentally, the drop also indicates the lack of progress in education, in which Brazil is in 79th place, which produces the lack of skilled labor and, in turn, acts as a trap that holds the country in a context. of little growth.

In recent years, the Brazilian Human Development Index (HDI) was virtually stagnant in 2018, after showing low growth in previous years.

Brazil: poverty grows and inequality increases

According to the IBGE (Brazilian Institute of Geography and Statistics), Brazil's GDP grew by 1.3% in 2018. The latest Focus Bulletin, published last Monday by the Brazilian Central Bank, pointed out that Brazil's GDP growth in 2019 should be around 1.1%. Therefore, if all goes as expected by the experts from the top 100 financial institutions in the Brazilian market, which make up the Focus Bulletin, 2019 will have a lower GDP growth than 2018.

This scenario allows us to say that the Brazilian economy continues at a very slow recovery pace. As the Brazilian GDP advances with very little vigor, it seems that the country's economy should recover pre-crisis level only in 2022.

According to the technical director of Dieese (Inter-Union Department of Statistics and Socioeconomic Studies), Clemente Ganz Lúcio, if the Brazilian economy continues at this pace, it will take a decade for the country to recover the level of employment that existed before the crisis that began in 2013.

Currently, Brazil has 12.4 million jobless people, a rate of 11.6%.

According to Rafael Guerreiro Osório, a researcher at the Institute for Applied Economic Research (Ipea), the country's performance in the areas of income distribution and education pushed performance down. For Osorio, "we are not doing well in education. And this year, we have not seen a proposition of educational policy that promises extraordinary results, if any. In life expectancy, there is no way to change much from one year to another. So the hope would be for income, but our situation today will keep us close to the middle of the ranking." Brazil occupies the 79th position among 189 evaluated nations.

To make matters worse, Brazil has won the terrible title of runner-up in the world this year, second only to Qatar.

According to the newspaper O Estado de Minas, "Brazil is the second most unequal country in the world among those who provide estimates based on tax data, second only to Qatar"

In Brazil, 1% of the richest population (about 1.5 million people) concentrates 23.2% of the share of total income declared by individuals to income tax (in Qatar the richest 1% concentrates about 27% of total declared income).

According to The State of Minas, "the income concentration of this small group of rich people in Brazil is 164% higher than in Sweden, where the one hundredth richest share accounts for 8.8% of the total income. Sweden, from the 1930s until recently, saw the income share of the richest hundredth shrink from 12.3% to 8.8%, in Brazil, over the last nine decades, the distribution pattern has shown a steady and persistent concentration: 1% richer answered between 20% and 25% of the total income".

However, part of the Brazilian financial market, media, and government analysts insist that the Brazilian economy is growing again. For the thousands of Brazilian unemployed and underemployed, this kind of analysis is a kind of derision. For the thousands of Brazilian unemployed and underemployed, this kind of analysis is a kind of derision. While most face a day-to-day world record in homicide, hate crime, incarceration, state violence, unemployment and lack of prospects, part of the country's richest 1% insists that everything is getting better.

Observatório do Clima study shows that deforestation accounted for almost half of greenhouse gas emissions in Brazil

According to Jornal Nacional, Brazil's largest television news program, the smoke from car exhaust or power plants is not the biggest polluter of the Brazilian atmosphere. The big villain in this regard is deforestation in Brazilian forests, which accounted for 44% of the country's total greenhouse gas emissions in 2018, according to a study by the Observatório do Clima, which brings together 43 civil society organizations.

In August 2019 alone, the Amazon rainforest lost 1,698 square kilometers of vegetation, according to Inpe (National Institute for Space Research of Brazil).

This represents a 222% growth over the same period in 2018. In August 2018, it was 526 square kilometers. In the first eight months of 2019, the deforested area was 92% higher than in the same period of 2018.

According to economists interviewed by Reuters, the historic low-interest rates and the devaluation of the real against the dollar threaten to accelerate deforestation in the Amazon, as they are both favorable to agribusiness growth in the country. This, coupled with the lax oversight by the Jair Bolsonaro government, puts the Amazon rainforest at grave risk.

Real estate funds break the record in Brazil, grow 25% in 2019, and raise R$ 32.5 billion until November of this year

The year 2019 represented a milestone for the real estate funds market in Brazil. The volume of new issues, the largest in history according to Anbima (Brazilian Association of Financial and Capital Markets Entities), reached R$ 32.5 billion until November, more than double the previous record of R$ 16.1. billion, launched in 2011, or of R$ 16.1 billion by 2018. According to the Valor Investe website, the Brazilian Securities Commission (CVM) still has R$ 2.9 billion, in 12 offers, under analysis.

According to the Valor Investe website, to date, IFIX, the index of real estate funds traded on the Brazilian stock exchange, has appreciated 25%. There are more than 200 FIIs traded on B3, although the Brazilian Securities and Exchange Commission (CVM) has registered about 478 funds that together add up to R$ 121 billion in equity, according to a bulletin released by B3 in November.

Amazon rainforest deforestation affects rainy season in Brazil and harms farmers; soybean and corn production are the most affected

A survey by two researchers from the Federal University of Viçosa, Minas Gerais, and one from the University of California, United States, and published by the Royal Meteorological Society points out that large-scale replacement of the Amazon rainforest by pasture or planting areas is reducing rainfall in regions such as the Brazilian Midwest.

Between 1998 and 2002, the rainy season in the region, comprising Rondônia, southern Amazonas, northern Mato Grosso, and southern Pará, was shortened by 27 days. This has a huge impact on the Brazilian double-crop, in some cases practically making the second harvest impossible. In Brazil, farmers plant soybeans and then corn on the same ground. Without the rain, planting corn after soybean harvesting is practically unfeasible.

According to consultancy AgRural, in 2019, the ideal planting period (window) for the Brazilian corn crop in 2020 should be shorter, as the irregularity of rainfall in recent weeks has caused soybean sowing to be delayed by several parts of the South Central States of the Country.

Deforestation in the Amazon grows over 200% in August 2019 compared to August of 2018; illegal and uncontrolled logging in the region increases risks of disease and pandemics

According to the National Institute for Space Research (Inpe), the Amazon rainforest has lost 1,698 square kilometers of vegetation. In August 2018, there were 526 square kilometers. In the first eight months of 2019, the deforested area reached 6,404 square kilometers (92% higher than in the same period of 2018), and 30,901 fire outbreaks were recorded in the Amazon biome in this period.

In the Amazon, 35% of deforestation cases occur in land grabbing areas in public forests, parks or public areas without a destination. This is what reveals a study by the Amazon Environmental Research Institute (IPAM).

According to National Geographic Brazil, deforestation is causing an increase in infectious diseases in humans. According to scientists interviewed by the magazine, with the increase in the felling of forests around the world, grows the "fear that the next deadly pandemic may arise from within these environments."

According to the National Geographic report, over the past two decades, increasing scientific evidence suggests that deforestation, by initiating a complex chain of events, creates conditions for spreading a wide range of deadly pathogens among humans, including, the Nipah and Lassa viruses, and the parasites that cause malaria and Lyme disease.

Amazon Rainforest fires will have global effect according to Unicamp Chemistry Institute research

According to site G1, a study by researchers at the Unicamp Chemistry Institute (IQ) in the city of Campinas, São Paulo, "identified that burning in the Amazon rainforest, in addition to impacts on climate and biodiversity, is responsible for release 4 to 8 tonnes of mercury per year, a highly toxic element".

Therefore, the study revealed that, in addition to the terrible destruction of the Amazon biome, the burning in the region causes high emissions of mercury in the atmosphere, a highly toxic element to living beings.

According to Professor and researcher Anne Hélène Fostier, since the substance can wander for up to a year until it is deposited anywhere on the planet. Therefore, the impact of the fires on the Amazon Rainforest will be global.

Anne Hélène Fostier, who is an oceanographer, warns that once released into the atmosphere, mercury can go into the soil or water bodies. In rivers, lakes, and oceans the harmful element goes through a process of methylation, which makes it even more toxic.

The research explains that this process generates methylation, which in turn happens in the environment by biological means and transforms inorganic mercury into organic, especially methylmercury, one of the most toxic forms of this element.

According to Fostier, "when methylmercury is incorporated into the food chain, the risks of intoxication are very high. It is a threat, especially to riparian populations, who find their main protein source in fish."

BNDES will sell R$ 38.8 billion in shares in 2020; Petrobras (PETR3; PETR4), JBS (JBSS3). and Copel (CPLE6) are among the shares that will be sold

BNDES has set an initial schedule for the next four equity offerings it will make in 2020, as part of its divestment program, according to the Valor Econômico newspaper. The plan is to sell JBS 'second tranche of shares, a relevant stake in Petrobras, Copel's and Tupy's, which, considering current values, represent sales of R$ 30.8 billion.

According to Valor, the idea of BNDES is to reduce its portfolio of about R$ 120 billion of investments and stakes, reaching the nearest zero in the next three years.