What is happening in Brazil?
1. Politics – President Jair Bolsonaro made a ministerial reshuffle on Monday (29) in six departments. On Tuesday (30), Mr Bolsonaro fired the army, navy and air force commanders. The shake-up made the international headlines at FT, WSJ, The Economist, The New York Times, The Washington Post.
On Monday (29), the Minister of Health attended a public hearing at the Senate to explain public policies to fight the pandemic. The Minister of Education went to the lower house on Wednesday (31) to explain the current educational situation.
2. Economy – The government edited the Provisional Measure 1040/2021 with initiatives to improve the business sector in Brazil.
Brazil created 401,6 mil new formal jobs in February. The result is a high record for the month since 1992.
Roberto Campos Neto affirmed he has two major economic concerns: the vaccine rollout and the fiscal situation.
The emergency aid will begin to be paid on 6 April, in four payments: R$250 (£32), R$375 (£48) to women heads of families and R$150 (£19) to those living alone. Around 40m people will receive the benefit.
The government expects to attract R$10bn (£1.3bn) with Infra Week, from 7 to 9 April, when the concession auctions will happen through B3 Brazil Stock Exchange. On the list, 22 airports, five ports and a section of a railway.
3. Public Management – On Wednesday (31), it took place the first meeting of the National Committee to Fight the Covid019 Pandemic. After the meeting, the Minister of Health and the presidents of the Senate and the Lower House promoted social distancing the use of masks. Mr Bolsonaro criticised lockdown measures again.
Justice Marco Aurélio Mello from the Federal Supreme Court will retire on 5 July 2021.
The Brazilian Central Bank authorised WhatsApp to make transactions between its users.
The government is seeking ways to veto or adjust the federal budget in order to allow its very functioning. The adjustment can reach R$37bn (£4.7bn).
Mr Bolsonaro enacted the new Public Procurement Law (Lei 14.133/2021).
How to read it?
1. The political scenario is set to neutral, because of the pandemic and the noise generated by the ministerial changes, but it remains at a favourable level. The dismissal of the Minister of Foreign Affairs was expected, a demonstration that Mr Bolsonaro was sensible to the senator’s pressure, and the other changes did not have many repercussions. The surprise was related to the Minister of Defence and the three force commanders, which dominated the narrative. Politicians and authorities raised fears that it could represent a risk to the democratic regime in Brazil, but the new commanders do not seem inclined to allow political interferences.
In general, the changes were reported and assessed as politically negative, but Mr Bolsonaro still has political leverage: he was sensible to senators, he has a presidential coalition now enhanced by Centrão-appointed deputy Flávia Arruda (PL-DF) to become the government’s political negotiator, he controls important parliamentary committees and remains with the approval rating of roughly 30%, which is set to increase in the next couple of weeks with the new emergency aid and increase in the vaccination programme. Moreover, Mr Bolsonaro preserves his more faithful political base with the changes and the Covid-19 rhetoric.
2. The economy is on a positive trend again, despite the pandemic. Although there are hurdles, such as the flawed budget approval, the monetary policy is presenting positive signs. The fiscal policy is yet to be balanced, and the government is seeking ways to increase revenue.
Considering the current unemployment high level, the creation of new jobs surprised market analysts. The new emergency aid will have a positive economic impact. The development of the vaccination rollout and the decrease of new lockdowns will also contribute to a better economic scenario.
3. The public management aspect remains neutral because the impact of the ministerial changes cannot be fully assessed. Most analysts reported the changes as a setback. In a deeper analysis, however, the changes could bring a positive aspect. The new Minister of Justice is more technically and professionally more experienced than its predecessor, and it could be positive as well to have a Centrão representative as the new Secretary of Government.
Structurally, the current and dominant decision-making model in the federal administration relies on the presidential will. Despite that aspect, the change in the Ministry of Health and the creation of the Covid-19 Committee were important improvements. Also, the participation of Centrão politicians in the decisions forces the administration to be more open to other opinions, which could bring a positive aspect as well.