Friday, 28 June 2019

After 20 years of negotiations, Mercosur and the European Union seal a historical agreement

After twenty years of negotiations, Mercosur (Argentina, Brazil, Uruguay, and Paraguay) and the European Union have concluded a free trade agreement between the two blocs. The new pact between the two blocs will bring together economies that together account for around 25% of world GDP and a market of 780 million people.

The free trade agreement could represent an increase of US $ 87.5 billion of the Brazilian GDP in 15 years. It covers both tariff and regulatory issues such as services, government procurement, trade facilitation, technical barriers, sanitary and phytosanitary measures, and intellectual property.

Paradoxically, the agreement is a blow to politicians opposed to globalization such as the current Brazilian chancellor Ernesto Araújo, who has already said he would fight to reverse globalization.

However, both Araújo and President Jair Bolsonaro celebrated the agreement reached today between Mercosur and the European Union.

It is very strange, to say the least, that a government in which the Minister of Economy said publicly that Mercosur would not be a priority in the new government, and the chancellor openly criticizes what he calls "globalism" and says that Europe is a "culturally empty space" is now celebrating this deal.

Inflation slows in Brazil due to the economic crisis and the truck drivers strike

Inflation fell from 4.83% to 3.84% in the accumulated of the last 12 months. However, this drop was mainly caused by the truck drivers' strike in 2018 and the economic slowdown that brought down consumption within the country.

Thus, inflation in Brazil, which had accelerated in the first four months of 2019, seems to be giving a truce in the last two months, according to data released by IBGE. After the scares of March and April, when the IPCA, official index of inflation, reached 0.75% and 0.57%, respectively, in May the rise slowed to 0.13%.

As a result, the National Monetary Council (CMN) decided to lower the inflation target by 3.5% to 2022. The target will have a tolerance interval of 1.5 percentage points, more or less, and the inflation target will be considered fulfilled if the index stays between 2% and 5%.

According to the G1 website, between 2005 and 2018, the inflation target in Brazil "was maintained at 4.5%. In the following years, it was reduced by 0.25 percentage points each year, from 4.25% in 2019 to 3.75% by 2021."

Now, the Brazilian Central Bank should seek even lower inflation. The mistake of the government here is to present absolutely no policy to combat the economic stagnation and the unemployment that reaches millions of people. As a result, this situation is likely to persist in the coming months.

An alternative to this would be to keep the inflation target at 4.25% and reduce interest rates to try to stimulate investment, but even now, this seems insufficient because of the government's delay in presenting any plan to change this scenario of economic stagnation.

The financial market in Brazil is negatively impacted by the political disagreements of the current government

The political swoops between President Jair Bolsonaro and his ministers with the National Congress are worrying Brazilian investors. The Social Security Reform has been going a long way because of the efforts of the mayor of the Chamber of Deputies, Rodrigo Maia. However, Maia and other deputies involved in the Reformation continue to have disagreements with the government of Jair Bolsonaro. Most of these disagreements arise because of the complete lack of political ability of the federal government.

According to the Folha de S.Paulo newspaper, this political disarticulation added to the "pressure of parties and the lobby of public servants impinges" the Pension Reform.



Thursday, 27 June 2019

#MarchaDoPo and #Dia30VemPraRua divide Twitter in Brazil

The case of a drug seizure in Spain on a Brazilian Air Force (FAB) aircraft is sharing opinions in Brazil. Groups that support the current Brazilian government announced demonstrations for June 30, 2019 (Dia 30 Vem Pra Rua).

Already opponents and critics of the current government are calling this manifestation of March of the Dust (Marcha do Pó), in reference to the cocaine seized with the military that was part of the support team to the Bolsonaro entourage.

Even with the president and other members of the government saying that the military involved in the case should be tried "without condescension" in Spain and Brazil, there are many opponents trying to link the apprehension to the current government.

The mainstream media in Brazil, however, is pointing to the undeniable security flaw of a government packed with military personnel and a speech to combat drug trafficking.

Voting for Pension Reform postponed in Brazil; according to Ibope, Bolsonaro's popularity falls

The rapporteur for the pension reform bill, deputy Samuel Moreira, said that despite the postponement of the special committee session in the House, he believes that the Pension Reform proposal will be voted by the Chamber of Deputies before the July recess.

But with each passing day, it becomes more difficult for the vote to take place. Today, for example, Members decided to postpone the reading of the rapporteur's supplementary vote, which was scheduled for today (27.jun.2019).

The Pension Reform is struggling because of the inability of the government of President Jair Bolsonaro to participate actively and positively in political negotiations. The president of the Chamber of Deputies, Rodrigo Maia, has been the main responsible for the progress of the Pension Reform.

An example of this difficulty is the position of MP Marcelo Ramos (PL-AM), who is chair of the special committee for the Pension Reform, which reacted very poorly to the knowledge that the Minister of Economy, Paulo Guedes, said that the Congress is " a machine of corruption. " Ramos said he "has no respect" for Guedes anymore.

Ramos also said that "the government does not have an agenda, and because it has no agenda, it needs to adopt a diversionary attitude, it has no agenda to face the country's structural problem, which is 12.7 million unemployed, GDP below 1%. the way is a diversion, talk of three-pronged, gun-carrying, things that draw attention to the economic disaster that is the first six months of the Bolsonaro administration."

To make matters worse, new research indicates the popularity of Jair Bolsonaro. According to the Ibope, the rate of disapproval of the way the president governs rose from 40% to 48%. In April, 51% approved the management. Now the percentage fell to 46%.

In less than six months of government, the percentage of those assessing the government as bad has risen from 27 percent to 32 percent in June, and the population evaluating the government as good dropped from 35 percent to 32 percent. Therefore, the current government has growing disapproval.


Brazilian President Jair Bolsonaro rebuts German Chancellor Angela Merkel and says that Germans 'have much to learn' with Brazil

Brazilian President Jair Bolsonaro, who is in Osaka, Japan, for the G20 summit, rebuffed German Chancellor Angela Merkel, who expressed concern about Brazil's environmental policy and said the country's situation is dramatic. For Bolsonaro, Brazilians "have an example to give to Germany about the environment. Their industry is still fossil. It's part of coal. Not ours. They have to learn a lot from us".

According to the journalist Glenn Greenwald, "German Chancellor Angela Merkel says she views what is taking place in Brazil under Bolsonaro with great concern - as 'dramatic'- due to the threats he poses both to basic human rights and the environment".

The environmental policy of the Bolsonaro government should be the biggest drag on Brazil during the G20 meeting in Japan. It is not only Germany that is pressing Brazil in relation to the environmental policies of the Bolsonaro government. The French government, for example, has been one of the toughest in the talks on the trade agreement between Mercosur and the European Union. The main French argument is the fact that Brazil does not seem committed to the Paris Agreement – by which nations have committed themselves to meet pollution reduction targets.

To make matters worse, in an interview with BBC News Brazil, Brazil's Environment Minister Ricardo Salles said that the Brazilian government will insist on the message that it is necessary to explore the economic possibilities of the Amazon, diversifying the activities inside and around the Amazon Rainforest.

For most environmentalists, the minister's speech was received as more deforestation and damage to the Amazon Rainforest.

Brazilian financial market fears possible delay in voting on Pension Reform

The Brazilian financial market remains apprehensive to know if it will happen today, 27.Jun.2019, the reading of the Pension Reform report. The delay for the national political framework to discuss, vote and possibly approve the Pension Reform leaves investors in Brazil very apprehensive. Everyone already believes that the year 2019 is lost.

As the inflation framework in Brazil is not worrisome, due to the weakness of the Brazilian economy, everything indicates that in the second half the Brazilian Central Bank will cut the basic interest rates, which are currently at 6.5% per year.

The fear of some federal deputies losing the vote of the Pension Reform, since many are celebrating the feasts of São João in their respective states, can delay the entry of the Brazilian states into the new Social Security. This impasse is delaying the reading of the complementary vote of the rapporteur and federal deputy, Samuel Moreira. 

According to UOL website, "the inclusion of states and municipalities in Pension Reform is necessary because they are also breaking down. The deficit in the states reaches R$ 100 billion today and can quadruple until 2060. However, this inclusion has not yet been made basically because governors and federal deputies are afraid to displease state officials and lose votes."

Wednesday, 26 June 2019

The number of companies decreases for the second consecutive year in Brazil

According to the Central Business Register (CEMPRE), released today, June 20, 1919, by IBGE, the total number of companies in activity in Brazil was 5 million in 2017, the worst result since 2010, when it totaled 5.1 million. Since the beginning of the economic crisis in 2014, the number of companies declined by 74.2 thousand and the salaried population decreased by 3.2 million.

According to the IBGE News Agency, "the study shows that between 2007 and 2013, there was a continuous growth in the number of companies [in Brazil], from 4.4 million to 5.4 million. In 2014, however, this number fell by 288, 9 thousand organizations and, despite the small increase of 11.6 thousand in 2015, in the following two years the number dropped again to 64.4 thousand in 2016 and 21.5 thousand in 2017."

According to economist Laura Carvalho, the "brutal fall in growth projections" in Brazil combined with the possibility of "a new recession in the first quarter of 2019 brought to the surface the vicious circle caused by insufficient demand in the Brazilian economy."

In the first quarter of 2019, Brazil GDP fell by 0.2%. Two consecutive quarters of contraction mean a technical recession. For many economists, 2019 is already a lost year for Brazil. They believe that a possible economic recovery will only come in 2020.

Brazilian military arrested for transporting 39 kilograms of cocaine in a Brazilian Air Force (FAB) plane that was part of the entourage of President Jair Bolsonaro

According to the website El País, yesterday, June 25, 2019, at the Seville airport, the Spanish Civil Guard detained a Brazilian military man of 38 years who had carried 39 kilos of cocaine in an airplane of the FAB integrated to the entourage of the president Jair Bolsonaro.

The arrest took place during a stopover on the presidential reserve plane in Seville, southern Spain, to Osaka, where Bolsonaro will attend the G-20 meeting.

According to the O Globo, the detained military is 2nd Sergeant of the Brazilian Air Force and acts as flight commissar, providing onboard service on FAB planes.

Tuesday, 25 June 2019

#LulaLivreUrgente and #LulaNaCadeia are on the trending topic of Twitter as the STF decides to keep former president Lula in prison


According to the Folha de S.Paulo newspaper, Lula's defense highlighted the revelation of messages from the current Minister of Justice, Sergio Moro (who ruled Lula) and Lava Jato authorities (who investigated Lula) released by The Intercept Brasil since the last day 9.

Intercept reports, according to several politicians allied with Lula, indicate that Moro "had a personal animosity against the accused, provided evidence to the prosecution outside the case, previously combined petitions and decisions."

Monday, 24 June 2019

Layoffs outnumber hirings in Brazil

According to consultant Robert Half, in the first quarter of 2019, hirings were rescheduled in just three professions: programmers, quality inspectors, and database administrators grew their "cadres" in Brazil between January and March. Engineers had the most negative balance, with the closing of 1,003 jobs. Following are sales manager (567 closed positions), lawyer (486 vacancies closed) and financial manager (484 vacancies closed).

According to the Folha de S.Paulo newspaper, "the rate of unemployment of skilled labor — which has higher education — stood at 6.1% in the first quarter of this year, the highest since the beginning of 2017."

Thus, once again the careers in technology are armored in the face of the crisis. Hence the undeniable importance of government to understand the demands of the market and be ready to train workers and respond to changes in the labor market. However, nowadays, while the Brazilian labor market continues to look for coherent profiles with the technological revolution in progress, the country is still at odds over the teaching of technology in schools and universities. So far the government of Jair Bolsonaro has not presented any plans to meet these needs in the area of education.

In recent days, Education Minister of Brazil Abraham Weintraub has stated in an event that "there is no condition to maintain the current structure of public education."

Brazil to Host World's Largest Biogas Plant, Pioneering Sustainable Energy

The Louis Dreyfus Company (LDC) marks construction commencement of the world's largest biogas plant from citrus effluents, which is loc...