The Brazilian economy and its slow recovery; according to consultancy McKinsey, Brazil grows well below global average

The Brazilian GDP growth in the second quarter of 2019, 0.4% over the first three months of the same year, confirms the existence of a low growth cycle in Brazil since the end of the recession in 2016.

The advance in the Brazilian GDP is undeniably too small for the size of the problem. There are more than 12 million unemployed and the growth below 1% forecast for this year does not solve this problem at all. With this level of unemployment, consumption in the country does not grow, as jobless people stop consuming to spend on what is completely essential.

There is an undeniable lack of dynamism in the Brazilian economy. To overcome this, Brazil needs public policies focused on infrastructure urgently, but this scenario is not on the Brazilian horizon. On the contrary, there are few measures aimed at infrastructure investments, especially from the federal government.

To meet the global average, Brazil needs to invest 4.7 percent of GDP in infrastructure, according to a study by consultancy McKinsey, prepared at the request of the National Bank for Economic and Social Development (BNDES) and the International Finance Corporation (IFC) of the Bank. Worldwide. Between 2000 and 2016, however, Brazil applied on average only 2.1% of GDP on infrastructure.

According to economist Laura Carvalho, "the return of direct public investment in infrastructure to the pre-crisis level would have high stimulus power, even if it were entirely covered by the elimination of tax cuts, subsidies and other lower multiplier expenses on job creation and income and/or higher income taxes for the rich." However, this is not on the Brazilian political horizon either. Therefore, everything indicates that Brazil will continue to show small GDP growth. As a result, labor supply will remain very weak in Brazil.

One of the sectors that showed improvements was the construction industry in the region of the city of São Paulo, but this is still little to reactivate Brazil's economy.

The Brazilian GDP growth forecast for 2019 to be 0.8%, according to bank UBS; numbers released by IBGE today showed that the Brazilian economy underperformed and grown 0.4% in Q2 2019

Bank UBS presented a new growth forecast for Brazil's Gross Domestic Product (GDP) for 2019 and 2020. According to UBS, in 2019, the estimate for the increase of the Brazilian GDP fell from 1% to 0.8%. Already referring to the years 2020, the institution believes that the index will grow only 1.5%, compared to 2.2% previously predicted. Therefore, in a scenario of economic stagnation, UBS forecasts even lower performance than expected.

According to economist Laura Carvalho, the current recovery of the Brazilian economy is among the slowest in recent Brazilian history. According to Laura de Carvalho's estimates, "GDP (Gross Domestic Product) in force in the first quarter of 2014 would not be reached until December 2021 - 20 quarters after the end of the recession."

According to data released today by the IBGE, the Brazilian economy underperformed and grew only 0.4% in the second quarter of 2019. This result was driven by a slight recovery of the Brazilian industry. However, compared to the same period last year, the GDP was up 1%.

Also according to IBGE data, the Brazilian extractive industry had a record drop: -9.4%. This was the sharpest drop in the historical series of this sector. Vale's crimes in Brumadinho (where 248 people died and 22 others are missing) and the paralyzing of other dams for inspection in an attempt to prevent further tragedies. This, added to the rains in Pará impacted the iron ore industry in Brazil in the period.

Argentina declares a default with IMF and banks in an attempt to ease major turbulence in the country's foreign exchange market

Argentine President Mauricio Macri, announced today that he has asked the IMF to revise the maturities of its 56 billion dollar debt beginning in 2021. The measure, which would aim to alleviate the current turmoil in the country. foreign exchange market proves the failure of the neoliberal policy adopted in Argentina and defended by the current Brazilian government of Jair Bolsonaro.

This greatly worsens the situation of Macri, who has already lost primary elections to center-left candidate Alberto Fernández – whose deputy is Cristina Kirchner by a difference of 15 percentage points.

Brazilian President Jair Bolsonaro, in turn, is close to Macri. Bolsonaro has even attacked Fernández, confirming even the possibility of Brazil leaving Mercosur Fernández winning. Macri's possible defeat is largely due to the country's current economic situation. Today, Argentina has inflation of 55% and the basic interest rate is 70% per year.

According to Reuters, the rating agency Standard & Poor’s said on Thursday (29.08.2019) "that Argentina’s decision to "unilaterally' extend maturities on its short-term debt constituted a 'default'". 

Companies (Timberland, Vans, Kipling) and some European Governments Decide to Take Action Against Brazil Due to Jair Bolsonaro's Environmental Policy and Amazon rainforest Burning

According to information from the Brazilian Tannery Industries Center (CICB), more than 18 international brands, including Timberland, Vans, and Kipling, announced that they will suspend the purchase of Brazilian leather due to news related to burning in the Amazon region. 

The decision undermines Brazilian agribusiness. Yesterday, the CICB sent all this information to the Brazilian Environment Minister Ricardo Salles, with the intention of making the current government reviewing its environmental policy and the intention to make the inspection more flexible in the region, as the minister himself and the Brazilian president, Jair Bolsonaro have promised.

The Swedish government has also announced that it will review investments of its pension funds in Brazil in light of the Amazon. In total, Swedish pension applications total R$ 650 billion worldwide. To make matters worse, Swedish Finance Minister Per Bolund made public criticism of Brazilian President Jair Bolsonaro and the current Brazilian environmental policy.

The Norwegian government, for its part, has decided to call up Norwegian companies operating in Brazil and ask them to check whether they cause damage to the Amazon. The Norwegian government wants assurances that companies will not do business with companies that are harmful to the biome.

Today, after a tough meeting with governors of the region occurred yesterday in Brasília, where the president heard criticism from politicians like Flávio Dino, governor of Maranhão and opposition to the current federal government, the president Jair Bolsonaro was found himself almost embarrassed to step back and open the doors for bilateral aid donations to the Amazon.

The denial of the current Jair Bolsonaro government over European Union aid has been sharply criticized by the region's governors. Since Brazil is facing an economic crisis and has little money for many public services, denying receiving the money offered by the governments of Germany, Norway, and France sound almost unbelievable.

Brazilian financial market contaminated by the Bolsonaro effect

The Ibovespa index fell below 100,000 points in the last days and the dollar surpassed R $ 4,00. The current picture of volatility amid trade uncertainties and Bolsonaro's worsening in president and government approval polls.

Today, the dollar had risen to R$ 4.18 for the first time since September 2018. Currency buys gained momentum after Central Bank President Roberto Campos Neto said, according to Reuters, that the recent devaluation exchange rate is within the normal pattern.

Paradoxically, the financial market was one of the biggest supporters of Jair Bolsonaro's candidacy. Betting on a possible liberal agenda of the then-candidate. In coming to power, Bolsonaro put Paulo Guedes, a liberal in charge of the economy, but his government was largely unable to organize and lead the political debate around a reformist agenda. In fact, the statements of Bolsonaro and Guedes did more harm than good in assisting the approval work of the Social Security Reform. The main architect of this reform was the president of the Chamber of Deputies, Rodrigo Maia, who at various times collided with Bolsonaro and even Paulo Guedes.

Now, many analysts believe that the Bolsonaro government can repeat what happened to another liberal government in South America. Mauricio Macri's Argentina was the scene of a liberal who was unable to put into practice the reformist agenda at the right speed. Now, Macri, who has taken many populist measures in recent months, must lose the election to candidate to more developmental agenda.

To make matters worse, the publication of complaints against Mayor Rodrigo Maia helped increase the tension in the markets.

Brazilian president's negative rating grows from 19% in February to 39.5% today; Vanessa Barbara writes text in The New York Times saying that Jair Bolsonaro is the "most insignificant of men"

A survey made by the MDA institute and the CNT (National Transport Confederation) points out that the negative assessment by the Brazilian government has jumped from 19% in February to 39.5% now.

The survey also indicated that approval of Jair Bolsonaro's personal performance went from 28.2% in February to 53.7% now. The survey also indicates 29.1% believe the government is regular and 29.4% believe the government is great.

Meanwhile, The New York Times published an article signed by Brazilian journalist Vanessa Barbara, about the Amazon fires. The text, which featured prominently on the cover of the newspaper, says "a global treasure lies at the mercy of the smallest, dullest, pettiest of men", in reference to President Jair Bolsonaro.

The #panelaço is back in Brazil; on Twitter, hashtags like #ForaBolsonaro (Bolsonaro out), #ActForTheAmazon and #MacronLies gain traction

Several Brazilian cities had protests during President Jair Bolsonaro's national television and radio address, made last night. Bolsonaro spoke about the government's plans to fight fires in the Amazon region.

People went to their windows and hit their pans (that is known in Brazil as "panelaço"), exactly as happened during the impeachment of former president Dilma Rousseff. This demonstration points out that part of the middle class, which voted for Jair Bolsonaro, is very unhappy with the current government.

Brazil was also the scene of several street protests. Sao Paulo, Rio de Janeiro, and Brasilia had thousands of people on the streets speaking out against the government's current environmental policy.

According to the agency Lupa, the largest fact-checking agency in Brazil, in its pronouncement on national television yesterday, Jair Bolsonaro, contradicted itself several times.

Bolsonaro said, at 21 of August, that "Spreading unfounded data and messages, inside or outside Brazil, does not help solve the problem and lends itself only to political use and misinformation." However, the Brazilian president himself accused, without any proof whatsoever, that Non-Governmental Organizations (NGOs) are behind the fires currently occurring in the Amazon. All environmental protection experts in the country believe that this statement by the president was, at the very least, irresponsible, as it criminalized all organizations that have been fighting for environmental preservation for decades.

According to Lupa, the next day after making such a statement, Bolsonaro admitted that he had no proof, but still insisted that the NGOs were responsible.

Bolsonaro also said his government has "zero tolerance for crime and in the environmental area will be no different," but in April 2019, Bolsonaro himself criticized Ibama inspectors, the body responsible for environmental protection in Brazil.

Bolsonaro even exonerated an Ibama server who fined him for irregular fishing in 2012. The fine imposed on Bolsonaro was canceled in December 2018.

According to Veja magazine, loggers are using Bolsonaro government speeches to intimidate Ibama inspectors in the Amazon region. According to Veja, an example of this change in behavior occurred in the city of Espigão d'Oeste, in Rondônia. Where hooded men stopped an Ibama tanker truck, beat the driver and then set fire to the vehicle, which carried 8,000 liters of fuel. The cargo would serve to fuel a helicopter that would fly over indigenous reserves in the region, where timber theft was suspected.

The issue is also producing a genre of narratives in Brazilian social media. While the worldwide movement against the environmental policy of the current Brazilian government grows, there are a number of Internet users who continue to defend Bolsonaro. These defenders accuse French President Emmanuel Macron of lying about the burning of the Amazon.

Paradoxically, these Bolsonaro supporters, who accused Brazil of becoming a socialist country during the PT rule, are now in open confrontation on social media with the western world that they praised so much. Only this week, the Finnish government decided to study the possibility of a boycott of Brazilian meat. France and Ireland oppose the Mercosur and European Union agreement. The problems of burning in the Amazon region will be discussed during the G7 meeting. Norway and Germany have cut funding to the Amazon Fund. British Prime Minister Conservative Boris Johnson said he was "deeply concerned" about the current situation in the Amazon. Contradictorily, the Brazilian extreme right that supports Bolsonaro and called itself pro-Western is now calling Western European leaders liars.

Protests in front of the Brazilian embassies in London, Berlin and Madrid call for the preservation of the Amazon; in Brazil, Bolsonaro calls emergency meeting with eight ministers to discuss the issue; Finland studies banning imports of beef from Brazil

European protesters call on Jair Bolsonaro's government to defend the forest. The wave of burning in the Amazon has become a global issue, especially after French President Emmanuel Macron said that burning in the Amazon is an “international crisis.” He called for the issue to be discussed this weekend at the G7 meeting, a group formed by Germany, Canada, the United States, France, Italy, Japan, and the United Kingdom.

There are protests against Jair Bolsonaro's government in European cities such as Paris, London, Berlin, and Madrid.

The international pressure has prompted Brazilian President Jair Bolsonaro to call a ministerial meeting to discuss ways to combat the burnings. The Brazilian president also signed yesterday an order that all his team of ministers adopts measures to combat the burning in the Amazon rainforest.

Yesterday, Eduardo Bolsonaro, the senator and son of the Brazilian president published a video that offended the President of France. Eduardo was nominated by his father for the position of Brazilian ambassador in Washington, USA. However, work by the Brazilian Senate indicated that this measure constituted nepotism. Now, Brazilian senators will vote to decide whether or not the president's son can take office.

Today, Finland called for the European Union to consider banning imports of Brazilian meat following the burning of the Amazon

After saying that he didn't need the more than 250 million reais sent by Germany and Norway to protect the Amazon, the Brazilian president Jair Bolsonaro says Brazil doesn't have resources to fight Amazon fires

After saying that he did not need the R$ 155 million from Germany and R$ 133 million from Norway to go to the Amazon Fund, President Jair Bolsonaro went public today, according to Reuters, to say that the Brazilian government doesn't have enough resources to fight a record number of wildfires burning in the Amazon rainforest.

Leaving the presidential residence today, Bolsonaro tells reporters that “the Amazon is bigger than Europe, how will you fight criminal fires in such an area?" According to Bolsonaro, Brazil "do not have the resources for that.”

A few days ago, Bolsonaro sent Chancellor Angela Merkel to use the millions the German government would send to the Amazon Fund to reforest Germany. He then criticized the Norwegian government, which also used to contribute to the Amazon Fund, and decided not to send funds anymore because of the current Brazilian government policy.

Today, several Brazilian newspapers have published information that Brazil is using money already sent by Germany and Norway to the Amazon Fund to fight fires. Contracts of R$ 14.717 million with the Amazon Fund, donated by the two European countries, was signed in June 2014 by Ibama.

Brazilian President Jair Bolsonaro accuses the NGOs without proof of being responsible for the Amazon burning; Environment Minister Ricardo Salles booed at event in Bahia; #PrayForAmazonas: Burning becomes the most talked about Twitter topic in the world

Without presenting any evidence, Brazilian President Jair Bolsonaro accused NGOs of being responsible for the Amazon burning.

In his Twitter account, opposition deputy Marcelo Freixo said: "Bolsonaro is a cynic. But you can't just attribute cynicism to the statement that NGOs are burning the Amazon. The president's goal is to disqualify and criminalize organs and movements of environmental preservation. Burning paving the way for barbarism".

The statement was very much criticized. In Salvador to attend Latin American and Caribbean Climate Change Week, Greenpeace senior forest strategist Paulo Addario said that "criminalizing NGOs is criminalizing citizenship". WWF-Brazil Executive Director Mauricio Voivodic said that Bolsonaro's speech "it does not support itself at all."

Paradoxically, Environment Minister Ricardo Salles, in a post on his Twitter on the 20th, said that the fires that hit the Amazon are due to drought, wind and a strong heatwave in the region." Salles, by the way, was booed yesterday at the same Latin American and Caribbean Climate Change Week Climate Week in Salvador, Bahia.

In an interview with BBC Brazil, Professor of the Environmental Sciences Department of the Institute of Forests of the Federal Rural University of Rio de Janeiro (UFRRJ), Jerônimo Sansevero, said that Brazil will take at least 20 years to recover the destroyed part. But there are, he said, other "areas that have already lost their [recovery] capacity because they already have large-scale deforestation."

Yesterday, the hashtag #PrayForAmazonas has become one of the most talked-about topics on Twitter worldwide, even topping the list with hundreds of thousands of publications on the topic.

It is undeniable, however, that the arrival of Jair Bolsonaro to the presidency was accompanied by the also undeniable growth of burning in the Amazon. For many analysts, Bolsonaro's talk about the legalization of mining in the Amazon and indigenous lands, his undeniable proximity to the ruralists, his defense of landowner weaponry increase one right goes all in the region.

Know which state companies the current Brazilian government intends to privatize

According to the website Poder360, the current Brazilian government announces the list of companies that it intends to privatize to strengthen the federal cash and reduce the public deficit. The companies are:

1. Emgea (Empresa Gestora de Ativos);
2. ABGF (Agência Brasileira Gestora de Fundos Garantidores e Garantias);
3. Serpro (Serviço Federal de Processamento de Dados);
4. Dataprev (Empresa de Tecnologia e Informações da Previdência Social);
5. Casa da Moeda;
6. Ceagesp (Companhia de Entrepostos e Armazéns Gerais de São Paulo);
7. Ceasaminas (Centrais de Abastecimento de Minas Gerais);
8. CBTU (Companhia Brasileira de Trens Urbanos);
9. Trensurb (Empresa de Trens Urbanos de Porto Alegre S.A.);
10. Codesa (Companhia Docas do Espírito Santo);
11. EBC (Empresa Brasil de Comunicação);
12. Ceitec (Centro de Excelência em Tecnologia Eletrônica Avançada);
13. Telebras
14. Correios
15. Eletrobras
16. Lotex (Loteria Instantânea Exclusiva);
17. Codesp (Companhia Docas do Estado de São Paulo).

The government of Jair Bolsonaro, therefore, intends to sell assets to cover a deficit such as social security. In fact, this means giving up capital to pay current expenses. Privatizing to clean up public accounts is a mistake.

However, privatization is currently a necessity as the Brazilian state has no money to make investments, which is being consumed by current spending.

If privatizations were aimed at a national development project debated and agreed between the government and the population, privatization would not be a problem, but in Brazil, the issue is that privatization is often done without a clear definition of the role of capital. foreign capital, the national capital and state capital in the economy of the country. Privatizations are always done in a crisis environment, where the country loses much of its negotiating capacity and ends up selling assets below or their real value or without the guarantees necessary for the agreement to work.

Eletropaulo, for example, a power distribution company serving the metropolitan region of São Paulo, has already been sold twice, first to the US group AES, and then to the Italian Enel. In the first privatization, the US company, to increase productivity, cut costs that eventually hurt the company. Of the 27,000 employees, only 4,000 remained. This has reduced the company's ability to do network maintenance work, thereby harming the population using the service.