Quick Take: Bolsonaro lashes out, Brazil could suffer

Ian Bremmer's Quick Take:

Hi everybody, Ian Bremmer here, kicking off the week. I hope everyone's doing well. As well as can be expected, snowing yet again here in New York City, we'll get through it. March, I feel March is coming. It doesn't mean spring, but it means something. But anyway, thought we'd talk about Brazil. Haven't spoken about Brazil in some time here and making some news.

They were making news, significant news, of course, at the beginning of the pandemic, when President Bolsonaro was so badly mishandling the response in addition to some other leaders in this hemisphere, President Trump, President Lopez Obrador in Mexico. But most recently, the sudden sacking of the CEO of Petrobras, the state energy company in Brazil. Roberto Castello Branco is gone, replaced by a general, a former Minister of Defense Joaquim Silva e Luna and my God, the inbound I've seen over the past hours in terms of, does this mean that the state is taking over the economy in Brazil? What do we think about investors? What do we think about pricing? Are they in serious trouble? And the answer is, this is a real hit. This is a real hit.

And it is because the government is under more pressure. There was a potential for a major trucker's strike coming at a really bad time in Brazil, when prices were going up and they haven't yet put in place additional relief for the average Brazilian. There's concerns about fiscal stresses in the economy. And suddenly the CEO of Petrobras, who manages the company pretty well, but also is pretty strong headed, pretty arrogant, says, "Truckers and what the truckers do have nothing to do with my company." And you couldn't say that. It's incredibly impolitic. It put President Bolsonaro in a corner.

And so, he lashed out and removed this guy. And that was clearly not a smart thing to do. It would have been better to have negotiations and not undermine Paulo Guedes, who's in charge of the economy and is the one that's trying to keep sort of everything running in terms of Brazil, and instead now it looks like he's been sharply undermined. And again, I mean the market moves, the investor moves are going to be significant. It's definitely a hit to the credibility of the government in managing the economy and its state-owned enterprises more broadly. Not only because the CEO was himself doing a good job, but also because it sends a very strong message internationally that your company's fuel pricing policy is going to have political limits to it. And while the new CEO coming in was seen as doing a good job as minister of defense, number one, the fact that Bolsonaro is seen as a man of the military and as a consequence, that the generals are supportive of him, that undermines his perception in the markets.

And even though there's a plan to sell refineries, who's going to want to buy refineries if they don't think that they can get market prices for what they're going to be selling? So, this is a big hit to the government's credibility. Having said all of that, there's a difference between what you think about Petrobras and broader privatization. So Electrobras have a harder time getting it privatized than the rest and the reform trajectory for the country as a whole. Guedes is not going anywhere. He's been very quiet about this move and his relationship with the Brazilian president is still actually very strong. I think the real point is that the global economy is going to punish Brazil more as we get through this second phase of the global pandemic.

Brazil is now starting to produce vaccines domestically over the coming month. They are faster in terms of getting vaccines to the population than any country in South America. A lot of countries that did a really bad job responding initially to the healthcare part of the crisis, like the United States, like the UK, like Brazil, actually faster in terms of being able to get vaccines to the population. So, that feels pretty good. But the economic hit to Brazil in the coming year, as you have a president that is not particularly trusted in terms of the international marketplace, and as you have a tougher environment, much less flexibility to navigate for population that's demanding, improved social services, but not a good way to pay for it. All of that is going to be a serious problem as you move towards elections in 2022. And here, I think is the real question mark.

Bolsonaro's approval ratings are in the thirties right now. They're not great though, certainly more than high enough to forestall an impeachment, which some people continue to talk about. And you've got to be in the low twenties before Congress starts to move against you in Brazil. But that doesn't mean he's going to win election. And his reelection is looking challenging. And the alternative to Bolsonaro is not only going to be a return likely to the left, but easily as importantly, he's going to say it was stolen. He's going to say it was rigged. He's going to use social media to undermine support on the part of the average Brazilian of political institutions and processes. And unlike the United States, where the institutions are strong enough to have resilience, even when you have a leader that is doing everything possible to undermine trust in elections and institutions, in Brazil, that's not so clear. The Supreme Court, not quite so independent, the military, professional, but not quite so separate from the leadership. And the potential for this to go very badly in other words, not in the next few months, but in the coming year is growing. Something that I would spend more time watching.

As a consequence, I thought it was worth mentioning this. Not because we think that Brazil has suddenly hit a tipping point, but rather because this entire incident is an example of a Brazilian president that, when times are good, understands that he doesn't know anything about the economy and lets the experts run things. But when times are bad, he doesn't listen to anyone and he lashes out. And Warren Buffet said that when the tide suddenly comes out, you find out who's wearing bathing suits and who isn't. Well in Brazil when the tide starts to come out, President Bolsonaro was the first one to run towards you. And I'm not sure we all want to see that. So, the potential for this to get much worse in the coming year is real. And I think we're going to be talking a lot more about Brazil, not less as we go forward in 2022.

So that's it for me. I hope everyone's doing well. Be safe and avoid people. Talk to you soon.

Each month, Microsoft receives about 6,500 complaints from people who've been victims of tech support scams. But it's not just Microsoft's brand that the scammers leverage; fraudsters have pretended to be from a number of other reputable tech companies and service providers. These scams will remain an industry-wide challenge until sufficient people are educated about how they work and how to avoid them.

To measure the scope of this problem globally, Microsoft commissioned YouGov for a new 2021 survey across 16 countries. Results from the 2021 survey reveal that, globally, fewer consumers have been exposed to tech support scams as compared to the 2018 survey. However, those people who continued with the interaction were more likely to have lost money to the scammers than we saw in our previous survey. To read the highlights of the survey, visit Microsoft on the Issues.

Next week, Ebrahim Raisi, a hardliner who is ideologically and personally close to Iran's 82 year-old supreme leader Ayatollah Ali Khamenei, will be inaugurated as Iran's president. This power transition comes as the country experiences a fresh wave of protests that started in Iran's southwest over water shortages earlier this month and has since spilled over into dozens of provinces.

Some close observers of Iranian society and politics say that popular discontent there is now more widespread than it has been in years, making the Iranian regime more vulnerable than ever.

More Show less

Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:

QR codes are everywhere. Are they also tracking my personal data?

Well, a QR code is like a complex barcode that may be on a printed ad or product package for you to scan and access more information. For example, to look at a menu without health risk or for two-factor verification of a bank payment. And now also as an integral part of covid and vaccine registration. QR codes can lead to tracking metadata or personal data. And when your phone scans and takes you to a website, certainly the tracking starts there. Now, one big trap is that people may not distinguish one kind of use of QR codes from another and that they cannot be aware of the risks of sharing their data.

More Show less

Was the world so focused on climate change that warning signs about the COVID-19 pandemic were missed? Historian and author Niall Ferguson argues that, while the climate crisis poses a long-term threat to humanity, other potential catastrophes are much more dangerous in the near future. "We took our eye off that ball," Ferguson says about COVID, "despite numerous warnings, because global climate change has become the issue that Greta Thunberg said, would bring the end of the world. But the point I'm making in DOOM [his new book] is that we can end the world and a lot of other ways, much faster." Ferguson spoke with Ian Bremmer in an interview for GZERO World.

Watch the episode: Predictable disaster and the surprising history of shocks

Tunisia, the only country that emerged a democracy from the Arab Spring, is now in the middle of its worst political crisis since it got rid of former autocrat Zine El Abidine Ben Ali over a decade ago.

On Sunday, the 64th anniversary of the country's independence from France, President Kais Saied responded to widespread protests over the ailing economy and COVID by firing embattled Prime Minister Hichem Mechichi and suspending parliament for 30 days. Troops have surrounded the legislature, where rival crowds faced off on Monday, with one side chanting in support of the move and the other denouncing it as a coup.

How did we get here, do we even know who's really in charge, and what might come next?

More Show less

Ian Bremmer shares his perspective on global politics this week:

As COVID-19 cases rise, are vaccine mandates coming?

Oh, you just want to get me in more trouble. Yeah, some mandates are coming, but they're not national mandates in the United States. In some cases, you're looking at federal and state employees, in some cases you're looking at lots of individual corporations, universities, and such. I mean I've already been to a number of events where vaccines have been mandated in New York. You've got this Excelsior Pass if you want to go to the Brooklyn Nets games, as I certainly do. You show it off and that gets you in with your vaccine. So I think it's really going to be a decentralized process. But clearly, given Delta variant and the number of people that are getting sick and dying because they're not vaccinated, you're going to see moves towards more mandates, as a consequence.

More Show less

Castillo takes over in Peru: After almost two months of protests, baseless allegations of fraud from his rival in the runoff election, and even rumblings of a coup, Pedro Castillo will be sworn in as president of Peru on Wednesday. A former rural school-teacher famous for riding on horseback, wearing a cowboy hat and waving a giant pencil to show how much he cares about education, Castillo has big plans to achieve big change. But he won by just a razor-thin margin in a deeply divided country, and Peru's dysfunctional political system will likely hobble his attempts to get major legislation passed. Moreover, despite having moderated his positions, half of the country still sees him as a communist who might turn Peru into another Venezuela. Castillo's most immediate task is dealing with the twin crises of a deadly pandemic and a COVID-fueled economic crisis that has hit poor Peruvians — his base — the hardest.

More Show less

13: The two Koreas have restored their communication hotline almost 13 months after Pyongyang abruptly cut it in response to Seoul not doing enough to prevent North Korean defectors from sending propaganda leaflets across the shared border. The hotline was established in 2018 following a historic meeting between North Korean Supreme Leader Kim Jong Un and South Korean President Moon Jae-in.

More Show less

Subscribe to GZERO Media's newsletter, Signal

GZERO World with Ian Bremmer. Watch episodes now


Subscribe to GZERO Media's newsletter: Signal

GZERO World with Ian Bremmer. Watch episodes now


Subscribe to GZERO Media's newsletter: Signal