The August edition approaches the privatizations made by Temer’s government, the ethics envolved with the financing of Election campaigns by private entities among other subjects from the brazillian politics.
2. Index
Year 1 l #8
August 2017
Burson-Marsteller l Public Affairs
An intersecting agency that, through the understanding of the political environment, assists clients of
different sectors in the protection and/or promotion of their businesses, managing their influence in a
sustainable way.
The Burson-Marsteller standard is responsible for the development of highly customized projects,
according to the needs of each client, developing strategies for various economic sectors, especially
those heavily regulated by the government.
Contributors to this edition
Ricardo
Almeida
Anna Paula
Losi
Allana
Rodrigues
Isabela
Girotto
Luciana
Lemgruber
Fernanda
Xavier
Nara
Andrade
03 Dialogue and Conjuncture
Temer is back to the game
04 Politics
The End of The Environmental Reserve Of Renca In The Amazon Forest And
The Environmental Agenda of Temer’s government
09 International Relations
A step from protectionism to compelled free trade, Brazil's condemnation in the WTO
05 Politics
Temer Government's Privatization Program: Positive Economy or political articulation?
06 Politics
Political reform? The Status Quo Remodeling Moves
07 Politics
Elections 2018 - Reconstruction and internal duel mark the PSDB for the
presidential race
06 Politics
Public funding of campaigns: new alternative or regression?
10 Economy
Economic Data
11 Agenda
Events Calendar
3. About 20 days after the vote that ended the complaint against Michel Temer, it can be said that the
president has returned to the game and has enough strength to continue his economic agenda.
At least three signs given this week attest to this assessment.
(i). The government has announced an ambitious privatization program. For purposes of evaluating
the strength of the president, more important than the extent of the announcement itself was the
market reaction, which denoted believing in Temer capacity of set in motion at least part of the
submitted plan;
(ii). The plenary of the House of Representatives approved Provisional Measure 777/2017, which
redefines the long-term interest rate practiced by BNDES. This was the first important vote after the
archiving of the complaint made by the Attorney General's Office because, in addition to indicate
the resumption of the economic agenda, the approval of the measure overcome the resistance of
part of the productive sector, always well represented in the House.
(iii). Survey conducted by Factual Informação e Análise with 183 representatives on the 15th and
16th of this month showed that 74% of representatives believe that President Temer will fulfill his
mandate until the end. Among the pro-government, the percentage is 83%; And among the
parliamentarians of the so-called "center", 79% agree with this statement.
All this is a preamble to the return of the Social Security reform agenda. The advisory service of the
Government leadership scheduled for September 1st a workshop with journalists in the presence of
Marcelo Caetano, Secretary of Social Security of the Ministry of Finance.
Currently, the parliamentarians still do not believe in the viability of the reform. In the survey
conducted by Factual Informação e Análise, on a scale of zero to ten, where zero means NO
CHANCE and ten means WITH CERTAINTY, the average chance of passing the current report is at
3.48. However, the percentage of representatives who scored between 7 and 10 (very high odds)
increased from 8% to 15% between July and August.
The government has recovered most of its legislative force, continues in an upward movement with
the representatives and senators and maintained its influence next to the market. All this leads to a
second semester with the reformist agenda quiet hectic.
Dialogue and
Conjuncture
Temer is back to the game
Leonardo Barreto
Factual Informação e Análise
PhD in Political Science from the University of Brasília, expert in
researches with authorities and partner of the Factual Information and
Analysis, a political research and analysis company.
4. Last Thursday (24), President Michel Temer published the decree that extinguishes the National
Reserve of Copper and Associates (Renca). On the day of its publication, the new rule, already in
force, received little attention; However, after repercussion in the media and positioning of public
figures, it caused great commotion among environmentalists in Brazil and in the world.
Renca was created in 1984, with the main objective of protecting mineral goods in order to avoid
future shortages. Within the reserve, exploration and mineral exploration would only happen if they
met specific regulations. Per an official publication in “Portal Brasil”, the reserve extinction would be
justified by the need for knowledge of the geological and mineral wealth of Brazilian subsoil,
besides the fact that the impediment of regular activities would have motivated illegal and harmful
exploration in the region.
The Reserve delimits a protected area of nearly 47 000 km², located in a region between the states
of Pará and Amapá. Mineral research and economic activity in the area are responsibility of
Companhia Brasileira de Recursos Minerais (CPRM - Brazilian Geological Survey) or companies
authorized by the company. The President insists that the end of Renca only implies the extinction
of a mineral reserve, not affecting any environmental or indigenous reserve, since the decree
establishes that the legislation on protection of native vegetation, conservation units and
indigenous lands would be respected.
The issue was further aggravated when society gained knowledge that in March of this year, during
the "Prospectors and Developers Association of Canada (PDAC)" in Toronto, the Minister of Mines
and Energy announced the end of the Reserve, along with a package of measures for the
reformulation of the Brazilian mineral sector. After the media reaction and pressure from
personalities of the artistic world on the subject, President Michel Temer published a more detailed
decree on the subject on Monday (28), repealing the previous legislation and explaining the real
intentions.
The reserve remains extinct. However, the new text has introduced a restriction on mineral
exploration where there is partial overlap with nature conservation units or demarcated indigenous
lands, except if it is provided in the management plan. In areas where there is no overlap,
exploration is open to meet the knowledge interests of Brazilian wealth, but must consider aspects
such as environmental impact and sustainable use of the area.
Politics
The End of The Environmental Reserve Of Renca In The
Amazon Forest And The Environmental Agenda of Temer’s
government
5. The government's environmental policy guidelines have been criticized both externally and by
members of the own government, especially in the current scenario of seeking parliamentary
support in both Houses of the National Congress. In this sense, the environmental agenda would
have been used to gain support from the ruralist group, which has 211 representatives in the House
of Representatives, 41% of the parliamentarians.
The government has been making timid advances in the environmental agenda. The expansion of
three conservation units in June of this year, one of which is the National Park of Chapada dos
Veadeiros, and the veto of the Provisional Measure that reduces the Jamanxim Forest, made as a
response to criticism from Norwegian authorities, are the few examples of advancement. The
unfolding of Renca's extinction and the response to pressures made by civil society seem to
indicate new steps in this agenda, leaving open, however, if there will be more detailed clarifications
and decrees only when celebrities and media figures show some interest in the agenda.
Politics
Temer Government's Privatization Program: Positive Economy or
political articulation?
After taking over the presidency over a year ago, Michel Temer announced the Investment
Partnership Program (PPI). Dubbed as "Growing," the program promises to get the country back
into a positive economy. With a "bloated" state, the concessions aim to transfer the responsibility of
managing public services to private entities. The idea is that the concession generates profit for the
state and that it foments the economy, besides offering better infrastructure to the individuals who
use of the services.
The main criticism is not in the concessions themselves, but about the way they are given. In the
midst of political chaos, partnerships with private enterprise cease to be an economic solution for
Brazil and become a political solution for the President himself. With low-cost sales and the already
established figures, the concessions are a very effective way to keep the sponsored quiet and to
please them. The truth is that little is known about these privatizations, but the scant debate on the
subject and the rush to carry out the Program scares the population, which disapproves the
president more and more.
In the first phase of the program, 39 decentralizations were authorized, including concessions and
privatizations. In the second phase, the Board of the Investment Partnerships Program has already
approved a list of 57 assets that can be offered to the private sector, such as Eletrobrás, Congonhas
Airport and Casa da Moeda, among the selected state-owned companies.
It is worth noting that the Concessions have been authorized by law in Brazil for more than thirty
years, and have always been carried out. However, the package is the largest in twenty years, since
the Fernando Henrique Cardoso’s administration, and the deadline is less than two years for its
total application. The problem is that these processes take time and that the chance to the
economic impact expected is minimal. Besides, the little information released on the subject makes
the program more like government marketing, which will hardly be applied.
Politics
The End of The Environmental Reserve Of Renca In The
Amazon Forest And The Environmental Agenda of Temer’s
government
6. After the whirlwinds that surrounded the impeachment process of former President Dilma Rousseff
and the peak of Car Wash Operation investigations, the debate on the political reform, a package of
three proposals which aims to reorganize the Brazilian political system, comes back to the scene. In
addition to PEC 77/2003, PEC 282/2016 and the bill of political reform, are parliamentary initiatives
that demand political changes without, however, changing politicians.
Reform without change?
The answer is as rudimentary as the reasoning that drives it. It would be naive, at least, to believe
that powerful parliamentarians of equally expressive parties would consider defending proposals
that would endanger their re-election and, in no less rare cases, their freedom.
The “Distritão”, which is the discussed point of the reformist package, foresees a change in the
system of proportional election of representatives (federal and state) and councilmen to a mixed
district system, that is, those who have more votes are elected, despite the party's performance.
Nowadays, the party is also voted, when reaching the electoral coefficient, it conquers a certain
number of seats and elect parliamentary ones that had smaller number of votes. Curiously, if there
wasn’t the proportional system, the current speaker of the House of Representatives would not be a
congressman.
Openly defended by President Michel Temer, as well as his party (PMDB), the Democrats, other
parties of the allied base and even the former representative Eduardo Cunha (while he was still the
speaker of the House of Representatives), the Distritão makes the voter understanding easier: the
one with the highest number of votes is elected. However, the opposition says, it would weaken
parties and give prominence to those who are already in office, securing them privileged forum if
re-elected.
With the end of private electoral funding, well-known politicians with more financial resources
would have an advantage, since in practice a small number of candidates concentrate money from
party funds. Yet, on the other hand, competition with candidates widely known to voters, as
religious leaders and artists, would increase.
Considering the projections based on the speeches of parliamentarians on the subject, the division
evidenced in the vote in committee (17 for and 15 contraries), in addition to the need for 308 votes
for approval in plenary, the chances of the proposal to be rejected are high.
It should be noted that, in addition to the use of regimental procedures as obstacles to the
approval of the proposal with the theme discussed, there is a lack of political will and proposals
designed to maintain and improve the democratic system, regarding the duties exercised and
demanded by representatives and senators. However, there are too much appreciation for power
and excessive attachment to positions rather than social welfare.
Politics Political reform? Status Quo Remodeling Moves
Politics
Public funding of campaigns: new alternative or
regression?
In the context of the 2015 electoral mini-reform, among several changes in the Electoral
Code, the Supreme Federal Court (STF), in relation to the financing of political candidacies,
prohibited the companies donations that were the main source of funds for the campaigns.
According to data from the 2014 elections, more than R$ 3 billion were donated by legal entities to
the electoral campaigns, while the parties used only R$ 72 million from the Partisan Fund.
7. Politics
Public funding of campaigns: new alternative or
regression?
The new rules for funding were valid, for the first time, for the 2016 elections. However, until the
last presidential elections, in addition to contributions from individuals, companies could donate the
limit of 2% of gross income of the previous year to plea. In the new Electoral Code, besides the
impediment of financing by legal entity, trade-union entities and organs of the direct or indirect
public administration, for example, are also not allowed to pay for the campaigns.
In this scenario, and with the approach of the 2018 elections, representatives and senators began
discussing new ways to fund election campaigns. The House of Representatives is currently
analyzing a proposal that creates the Special Fund for Democracy Financing, the "fundão". In order
for the proposal to take effect in the next elections, it will have to be approved by the House of
Representatives and the Federal Senate until October 7 of this year.
The new financing alternative was presented by Representative Vicente Cândido (PT/SP), and
proposes that 0.5% of the current net revenue of the government, in the last twelve months, be
allocated to political campaigns. Thus, in 2018, this amount would be around R$ 3.6 billion. The
approval of the "fundão" will represent a double public financing, whereas Brazil already foresees, in
the Federal Constitution of 1988, the Partisan Fund that promotes the financial autonomy of the
party organizations.
According to the International Institute for Democracy (Idea), from the analysis of the political
system of 180 countries, 24% already use public funding for parties and campaigns. However, given
the large amount allocated to the "fundão”, in a Brazilian scenario of political crisis and discussions
about representativeness, the proposal had a negative impact on the media and public opinion.
At this situation, and due to the short-term approval, Representative Ronaldo Caiado (DEM/GO)
presented an alternative draft regarding financing. The public resources for party campaigns would
be the fiscal compensation the government provides to broadcasters to transmit political
advertisements and fines imposed on parties. In summary, the Democrat argues that his measure
proposes a fund based on fewer resources.
The alternatives on public funding caused several protests and the parliamentarians removed from
Vicente Cândido's proposal the margin of 0.5% of revenue. However, in the measure, the fund was
maintained.
It is expected the progress of the proposals. Although the parliamentarian's articulations on the
financing propagate the incoherence regarding the country's conjuncture, while, in addition to
political events such as impeachment and Operation “Lava Jato”, Brazil faces an economic crisis that
support the need to invest the amount allocated to the fund in other sectors.
Politics
Elections 2018 - Reconstruction and internal duel mark the PSDB for
the presidential race
Movements around the 2018 electoral race have begun and the major parties in the Brazilian
political scenario have two major challenges to overcome: the definitions of the names that will be
presented to run for the Presidency of the Republic and the high rates of rejection of its most vocal
politicians.
8. In the Brazilian Social Democracy Party (PSDB), one of the main allies in the Federal Government,
accomplishing this mission will not be easy. The party's image was heavily shaken by the events
surrounding Senator Aécio Neves (the party's licensed president) involving JBS's case. There is also
a reflection on the support that has been given to the Planalto for the reforms and, internally, a
veiled duel between the two important names to compete for the position: João Doria and Geraldo
Alckmin, mayor and governor of São Paulo, respectively.
The political gravity of the Aécio Neves case had a negative impact within the party. Until then,
considered by voters seeking a renewal, the PSDB lost much of its credibility with the case. The
internal rift, led by congressmen who supported Aecio's staying in the party's presidency and those
who demanded the exchange of command, claiming their unsustainability, also generated instability
in the group.
The change of command interferes both in the future of the party and in the endorsement of the
candidate who will contest the plea. Sen. Tasso Jereissati (EC), acting party chairman until December
of this year, has already made it clear that Alckmin's name is the first on the list. In a recent visit to
the federal capital, Geraldo Alckmin was defined by Tasso as one of the main leaders of the party
and his performance is fundamental for the reconstruction of PSDB. However, a new president may
bring a different configuration to this support.
Another issue that brings instability to PSDB is the maintenance of the party alliance with Temer´s
Government. While Aécio Neves and his supporters defended the maintenance of that support at
any cost, a portion of the party, especially in the House of Representatives, openly defended that
the party should give away its positions, thus feeling free to vote according to the values of the
party.
In the midst of the vortex experienced in recent months alongside the PMDB and the internal
dismantling observed in view of the maintenance of the coalition between the two parties, the PSDB
survives, even if weakened, and may present a strong name in the context of the 2018 presidential
race to face the interests of former President Lula (PT) in the dispute.
In this scenario, Doria´s appears as a strong option to combat Lula's growth in vote intentions. In
his first foray into politics, João Doria has been calling attention to his administration as the head
of the country's largest city and its high power of communication.
By positioning himself as a manager, the mayor of São Paulo managed to move away from the
image of a traditional politician and thus win over those voters who were looking for new options,
including a distancing from Alckmin, who is his political godfather.
While the party does not have a defined position, both, however, already working on a national
agenda of meetings with politicians and businessmen to garner support and present themselves as
an option. The decision of the PSDB should be taken until December when it will probably be
announced the name of the candidate for the Presidency of the Republic.
Until then, "creator and creature" follow the formalities and, in their own way, continue to pave the
way for a possible incursion into the dispute for the country's highest political office.
Politics
Elections 2018 - Reconstruction and internal duel mark the
PSDB for the presidential race
9. The national economic policy based on the protectionist model of trade is not strange to national
customs, far from it, it has been in the praxis of the country for several decades. There are
numerous measures of tax incentives to industry to the detriment of free global competition
published or about to be published every year.
This was the context that led to the opening of a panel in the World Trade Organization (WTO) due
to claims of Japan and the European Union (EU). According to the complainants, Brazil uses a series
of discriminatory rules, incentive programs for the domestic industry, which constitute tax
exemptions or competitive advantages that emphasize the use of local resources and better
performance of national exports, which, however, contradict international trade agreements trade.
Since the opening of the panel in 2013, the discussion on this type of subsidy has become more
evident without, however, limiting the propensity to create new models for the same goals. National
industry is extremely dependent of government protection, so that whenever incentive programs
are under threat of closure, it uses the power of pressure and constrains decision makers to create
outputs, ways to perpetuate trade stimulus devices.
Indeed, the dependence of the national industry is the result of a markedly victimistic stance,
habituated to repeating maxims that even go back to the colonial period, to justify the inability to
become more competitive and specialized. The outcome of this cycle of interdependence was
already expected, WTO decided to condemn Brazil, the major service for the country until now.
The Organization gave a period of 90 days for Brazil to withdraw seven industrial subsidy programs,
two of which are no longer in force, the PATVD (Support Program for the Technological
Development of the Digital TV Equipment Industry) and the Digital Inclusion Program. The others
are the Inovar-Auto Program, which encourages the automotive supply chain; PADIS, in favor of the
semiconductor industry and displays; The RECAP and the PEC, programs that give benefits to
exporting companies; and finally the technology information law.
The immediate benefit of the condemnation is clear and significant, the country, although by
coercive means, should give up tax incentives to compel its industrial park to become more
qualified and competitive, although it cannot be said that this is an inevitable result. Still, the federal
government has the excuse that it hoped to reduce incentives and raise more funds in times of
deficit, without, however, pressure from the productive sectors.
International
Relations
A step from protectionism to compelled free trade,
Brazil's condemnation in the WTO
11. Events
Calendar
SUN MON TUE WED THU FRI SAT
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
BRICS International Trade Defense Seminar
Local: China
Meeting at the Ludwig Boltzmann Institute for
Rare and undiagnosed diseases
Local: Australia
Ordinary Meeting of
the Board of
ANVISA
Local: ANVISA
Headquarters
Meeting of the
Thematic Chamber
of the Brazilian
System of
Inspection of
Agricultural
Commodities
Products of the
Unified System of
Attention to
Agricultural and
Livestock Health
Local: MAPA
Headquarters
ANATEL Board of
Directors Meeting
Local: ANATEL
Headquarters
World Food Moscow 2017
Local: Russia
XXVIII International Congress of the Latin Association for Health Systems Analysis
Local: Belgium
XI National Symposium on Biotechnology REDBIO
Local: Argentina
International Cooperation on Prequalification of
Medicines and Drugs of the World Health
Organization
Local: Denmark
International Symposium on Regulation of Herbal and Tradicional Medicines
Local: Germany
BRICS Summit
Local: China
II MERCOSUR-EFTA Round of negotiations
Local: Genebra
Ordinary Meeting of
the Board of
ANVISA
Local: ANVISA
Headquarters
International Cooperation on Prequalification of Medicines and Drugs of the World Health Organization
Local: Denmark
12. Events
Calendar
SUN MON TUE WED THU FRI SAT
17 18 19 20 21 22 23
24 25 26 27 28 29 30
Meeting of the
Sectorial Chamber
of the Produced
Chain of Planted
Forests
Local: MAPA
Headquarters
29th Pan American Sanitary Conference
Local: United States
VIII Seminar on Protection of Privacy and Personal
Data
Local: Sao Paulo
Ordinary Meeting of
the Board of
ANVISA
Local: ANVISA
Headquarters
ANATEL Board of
Directors Meeting
Local: ANATEL
Headquarters
ANATEL Board of
Directors Meeting
Local: ANATEL
Headquarters
Ordinary Meeting of
the Board of
ANVISA
Local: ANVISA
Headquarters
Meeting of the
Sectorial Chamber
of the Produced
Chain of Planted
Forests
Local: MAPA
Headquarters