The Week Ahead in Brazil #85

What is happening in Brazil?

1. Politics – The governor of São Paulo, João Dória, defeated the governor of Rio Grande do Sul, Eduardo Leite, in the voting of PSDB party members to choose a candidate to run for President of the Republic in 2022.

The Minister of Economy, Paulo Guedes, provided clarifications on Tuesday (23) at the lower house, on the case of offshore companies. The assessment is that there was no political wear. (Poder360)

The lower house approved the Provisional Measure 1061/21, which creates the government’s new social program, Auxílio Brasil, which will replace PT’s Bolsa Família. The text still needs to be approved by the Senate. (House)

The Constitution and Justice Committee (CCJ) of the lower house approved the admissibility of a constitutional amendment proposal to reduce from 75 to 70 years the compulsory retirement age for justices of the Supreme Federal Tribunal. The proposal still needs to be approved in a special committee and be approved in two rounds, both in the House and Senate. If approved, it could shorten the mandates of Justices Rosa Weber and Ricardo Lewandowski.

The president of the Senate’s CCJ, Davi Alcolumbre (DEM-AP), appointed Senator Eliziane Gama (Cidadania-MA) as rapporteur for the nomination of André Mendonça for the vacancy of STF minister. The voting is scheduled for December 1. (g1)

The president of the Senate, Rodrigo Pacheco (PSD-MG), and the speaker of the lower house, Arthur Lira (PP-AL), decided not to reveal the names of parliamentarians who benefited, in 2020 and 2021, by the amendments of the rapporteur, contrary to the decision of the STF. They said that only from now on will give publicity with the name of parliamentarians. Lira and Pacheco asked the Court to revoke the order in relation to amendments before the decision. (Estadão)

The National Congress analyzes on Monday (29) the PRN 4/2021, draft resolution that creates rules for the allocation of amendments to the budget: the session in the House of Representatives is scheduled for 14h and the Senate, for 16h. The approval of this text is an attempt by Congress to increase transparency in the presentation, approval and implementation of amendments of the general rapporteur of the budget law. (Senate Agency)

The federal government expects the PEC of Precatórios (Proposal for Constitutional Amendment 23/2021) to be voted on Tuesday (30) in the Constitution and Justice Committee (CCJ) of the Senate. According to the government, the proposal will create fiscal space for the payment of Auxílio Brasil through the change in the calculation of the spending cap and a new regime for the payment of precatórios. But one of the main causes of resistance faced by the text in the Senate is the lack of specification of the destination of the remaining amount after the payment of the aid. (Senate Agency)

The Commission of Economic Affairs (CAE) has a meeting scheduled for this Tuesday (30), at 9 am, with 12 items on the agenda. One of them is the project that deals with guidelines for diesel, cooking gas and gasoline prices (PL 1.472/2021). (Senate Agency)

Quaest’s IPD (Digital Popularity Index) study shows that President Jair Bolsonaro’s popularity stabilized at 57.9 points, but former President Luis Inácio Lula da Silva’s IDP rose 12 points after his European tour, reaching 63.9 points. (Poder 360)

PoderData survey shows a 5 percentage point drop in disapproval of the government, retreating from 61% to 56%. Approval was 33%, with a positive variation of 33%. In relation to the President’s work, however, the situation worsened: 22% consider it good or excellent, and 57%, bad or terrible. (Poder360)

The PL announced the new date for President Jair Bolsonaro to join the PL: November 30th. (Valor)

How to read it

1. The trend in politics remains positive, with no relevant changes. Following the example of what happened last week, the political climate continues to create positive conditions for the advancement of public policies.

Bolsonaro continues in a moderate tone, both concerning the STF and the Congress. It is possible that the advance of candidacies – both Lula’s and other third way candidates – has contributed to the emergence of this more balanced version of the president. As the candidacies are consolidated, the attacks on Bolsonaro by the candidates should increase, as should the reaction of the president himself. Meanwhile, the scene remains favourable to the government in Congress, but a little worse in the Senate, where there are greater difficulties in the approval of important issues. For this reason, the progress of the PEC of Precatórios and the voting of André Mendonça deserve attention this week.

Another factor that contributes to the positive trend is the slight improvement in the ratings of popular support for the government.

2. The trend for the economy continues neutral. Despite the probable disclosure of the GDP’s stagflation for the third quarter, bad results for the trade balance and persistently high inflation, the government should present positive data with the public accounts surplus and falling unemployment. The public debt/GDP ratio also continues to fall.

The important point to which I draw attention is that the economy is not evaluated by just one piece of data, such as inflation or the exchange rate. The picture has to be as complete as possible in the present but also offer some predictability for the future. It is this complex balance between the various variables that make up the economy, both short and long term, that I try to assess.

3. Public management is on a positive trend. It may have taken a long time, but the action to combat illegal mining was a positive move on the part of the government. It was an important demonstration of the capacity to coordinate and execute a complex operation, involving various departments. The fact that Ibama participated was extremely positive because it reaffirms the importance of the agency in combating environmental damage.

It was also positive the government’s decision to hinder the arrival of the Omicron variant in Brazil, by restricting the arrival of passengers coming from some countries. Public policies can always be improved, but the federal government showed agility in adopting the measure without pointless debates, as had already happened in the past regarding Covid-19.

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