Happy New Year!
I plan to publish a free newsletter like the one below every week in 2019. Please feel free to forward to your friends and colleagues and encourage them to subscribe for free by entering their email at https://boz.substack.com
In addition, I am offering a paid subscription. In addition to the free weekly newsletter, paying subscribers receive at least one piece of exclusive analysis or original reporting per week. You can subscribe for $9 per month or $90 per year.
This week’s report for paying subscribers looked at ten factors keeping Maduro in power in Venezuela and the risks he faces in early 2019.
Six predictions on Bolsonaro in 2019
1. Security will worsen.
The homicide rate will rise. Violent urban crime will increase. The likely deteriorating security situation under Bolsonaro has three causes:
The general security trends in recent years that the new president inherits.
Specific policies Bolsonaro plans to put in place including increasing police and military actions against criminals and expanded access to firearms.
The tone Bolsonaro creates by treating criminals as if they deserve a violent death.
These factors threaten to create a downward spiral for Brazil’s security situation. Bolsonaro’s crackdown creates a violent response which builds public pressure for additional hardline government actions. Frustrated he is unable to meet his campaign promise of improved security, Bolsonaro is more likely to double down on failed policies rather than change course.
2. Politically motivated assaults and killings will increase.
Separate from the broader security trends, there has been an increase in politically-motivated assaults and murders since the election of Bolsonaro that will continue into 2019. The new president’s most radical supporters see his rhetoric as a green light to target journalists, minorities, and individuals who organize and campaign for the rights of marginalized communities.
3. Corruption investigations will be politicized.
In recent years, anti-corruption investigations in Brazil targeted politicians and business leaders across the political spectrum. All of Brazil’s leading political parties saw key politicians indicted for acts of bribery and corruption. Bolsonaro will attempt to change this, protecting allies while encouraging the swift and fierce prosecution of his opponents. His administration’s attitude towards politicizing corruption investigations will be a serious challenge to Brazil’s judicial institutions. While analysts will point to some initial signs of judicial independence in the early months of 2019, Bolsonaro will chip away at the system until it bends to his will.
4. Deforestation will increase.
There is little doubt that Bolsonaro dislikes environmental defenders and has a soft spot for agribusiness. He has already canceled a UN conference on climate change, threatened to pull out of the Paris agreement, and put in place a foreign minister who is a rare climate change denialist. Deforestation increased during the final months of 2018 and that trend is likely to accelerate in the early months of this year.
5. Pension reform will be watered down or not passed at all.
Bolsonaro’s advisors have promised to finally tackle the white whale of emerging market analysts - Brazil’s pension system. Those promises are going to hit the same obstacles that have challenged the previous administrations in Brazil and other governments around the region. Popular protests and an unwilling Congress will fight against any reforms the president tries to make. Ultimately, Bolsonaro is more of a populist than a free-market ideologue and he will not be willing to undermine his popular support and cut into his political capital with the Congress just to pass an unpopular pension reform. He’d much rather target subsidies for the poor than the pension system that benefits the middle class and key sectors of supporters.
6. The Bolsonaro-Trump bromance will get stronger.
Bolsonaro plans to reorient Brazil towards an alliance with the US based on his personal affinity for Donald Trump. On New Year’s Day, Trump and Bolsonaro exchanged tweets of praise. Various US officials have praised Bolsonaro as an ideological match for the current US administration. This is not a relationship doomed to disaster (like the Trump-AMLO mutual admiration in recent months, which will eventually crash and burn). Expect the Trump-Bolsonaro affinity to grow over the course of 2019 to include multiple personal meetings between the two men.
6(b). Brazil’s reliance on China may temper the Bolsonaro-Trump bromance
Perhaps the biggest question of this new relationship will be how Bolsonaro demonstrates he is siding with the US against China on trade disputes. China has depended on Brazil as a key soy supplier as it retaliates against Trump’s tariffs. Bolsonaro moving Brazil into the US camp could give the US new leverage. However, Bolsonaro is very unlikely to take any actions that would undermine the businesses of key supporters in the agricultural sector.
Corruption Corner
Mexico - President Lopez Obrador claimed that most of oil stolen from PEMEX is the result of corruption on the inside of the organization. Without providing evidence, AMLO said the illegal pipeline taps by huachicoleros and criminal organizations only represent 20% of the losses for the state oil organization. The president announced that the military will be responsible for stopping the thefts.
Colombia - Rafael Merchan, a Secretary of Transportation under former President Santos, was found dead of a presumed suicide in his apartment in Bogota. Merchan was the second key witness for the Odebrecht bribery investigation to die under strange circumstances, leading to significant online speculation of foul play.
Peru - Attorney General Pedro Chavarry was forced to reverse his decision to dismiss investigators into the Odebrecht corruption case in that country following protests in the capital and criticisms from President Vizcarra and the Supreme Court. Odebrecht is expected in the coming weeks to reveal important evidence of bribery and corruption that occurred under previous administrations in Peru.
Reading list
Reuters - Colombia probing plots against president, arrests Venezuelans: foreign minister
Lisa Viscidi and Guy Edwards, NYT - Why Electric Vehicles Are Gathering Speed in Latin America
Reuters - Scandal involving Brazil president-elect's son clouds inauguration
Miami Herald - After 60 years of revolution in Cuba, cracks in leadership emerge
AFP, VOA - Raising Cattle a Risky Business for Venezuela Ranchers
Bloomberg - Venezuela Bondholders Are Gearing Up for Battle After Futile Year
InSight Crime - Venezuela Police Hide Killings Behind Claims of Resisting Authority
InSight Crime - 4 Takeaways So Far From the US Trial Against ‘El Chapo’