Bolsonaro and the mounting Brazilian catastrophe

Written by Iain Gibson, Associate Partner

Edited by Kevin Pringle, Partner


Good morning,


We are a week on from the UK government’s decision to drop the graph detailing Covid-19 deaths by country from its daily press conferences, following our steady rise to sit second in overall global rankings. It’s an ironic decision, given the chart’s purpose in the first few weeks of lockdown was to demonstrate how well we were doing when benchmarked against others.


It’s also short-sighted. We know we are in the early stages of this pandemic, and the fact is there is no agreed benchmark to which everyone in the world is adhering when collating their numbers. There will be many more twists, turns and spikes (plus other verbs) before a full and comprehensive history of this frightening time is written.


It looks as if countries with smaller population densities, and perhaps those with more authoritarian styles of government, may have been able to manage this initial stage of outbreak more effectively. The UK has neither of these dynamics, thankfully in the case of the latter. We cannot dispute that we have ten times the population of Norway, yet we cover a geographic area just under three-quarters the size. Other factors such as obesity, where we know we already have a problem, also appear to worsen the effects of Covid-19.


And, terrible human instinct that it is to hunt around for examples of where others have eclipsed your own failures, I am fairly sure that, when all is said and done, the worst examples of managing this crisis will not be found here. If I was asked now to place a bet on where that could be, I think we would struggle to look past Brazil.


Everything president Jair Bolsonaro has done, and everything he has said, is looking more and more like a textbook way of how not to handle this emergency. From dismissing the virus as, firstly, a “media trick” and then “nothing more than a cold”, he has since then: fired his public health minister for backing global health guidelines on social isolation; lobbied state governors to put an end to lockdowns; declared that gyms and beauty salons are essential businesses and should reopen (a directive ignored by most local government bodies); and promoted antimalarial drugs to treat Covid-19 patients.


It’s quite a list, with the results being just what you would expect. As other countries are flattening their infection curves, Brazil’s is on the rise, overtaking Spain and Italy in terms of confirmed cases on Saturday. It is now behind only the United States, Russia and the UK, having undertaken significantly less testing.


The death toll is the largest in emerging markets and, as the Financial Times detailed last week, mass graves are being dug in Amazonian communities, as more rural regions struggle to cope. Urban areas are being similarly overwhelmed, with the mayor of São Paulo warning today that the city’s public hospitals are running out of space.


Bolsonaro’s denial of reality, his reckless behaviour, and his failure to govern properly are now catching up with him. This pandemic will create lessons for us all, there are no prizes being dished out and nor should there be. But when this is over, Brazil is likely to be the poster child for what not to do.


Oh, and for good measure, the replacement public health minister quit on Friday. No reason was given but, then again, I don’t think he needed to explain a thing.


News

The UK government will today present the second reading of legislation designed to introduce a points-based immigration system. The Immigration and Social Security Co-ordination (EU Withdrawal) Bill aims to repeal EU freedom of movement and was first introduced in December 2018, but was postponed due to the lack of a working majority for the government at that time.


Police have questioned a suspect under caution over the incident in which a rail worker died of Covid-19 after being spat at by a man. Belly Mujinga and her colleague were spat at on the concourse of Victoria Station in March. Both women fell ill and Ms Mujinga died on 5 April, two weeks after the incident.


The UK government is aiming for 30 million coronavirus vaccine doses to be made available by September, if UK trials succeed. Speaking at the daily press briefing yesterday, business secretary Alok Sharma said that if collaboration between Oxford University and AstraZeneca was successful, then the vaccines would be rolled out as quickly as possible, and also made available to developing nations “at the lowest possible cost”.


A fight has broken out this morning in the Legislative Council of Hong Kong, between pro-democracy and pro-government politicians. The row, culminating in security guards carrying some legislators out of the chamber, was over procedures relating to backlogged legislation, which includes a bill to criminalise abuse of China’s national anthem.


Business and economy

According to fund manager Janus Henderson, between $200-500bn could be wiped from the value of dividends paid by companies this year. Its analysis found no impact on dividends in the first quarter of 2020, which stood at a record $275bn, up nearly 4% year-on-year. Janus Henderson added that banking, consumer, oil, mining and industrial sectors such as aerospace are set to be hardest hit. (£)


The chairman of the Federal Reserve, Jay Powell, has said in an interview with CBS Newsthat the US economy could contract by 20-30% because of the Covid-19 pandemic. He added that unemployment could peak at 25%.


Ryanair has reported a profit of €1bn for the year to 31 March 2020, but warned it would post a loss of around €200m for the current quarter. It has not provided a forecast for the rest of the year due to uncertainty, although the company further revised its passenger target for the year ahead down to 80 million, a number that had been 100 million and was, until last week, at 154 million.


Japanese conglomerate SoftBank has reported a record annual loss of $13bn, driven mainly by the disastrous performance of its flagship Vision Fund (which counts the likes of WeWork and Uber amongst its investments). The fund lost $18bn alone, contributing towards the worst ever losses in SoftBank’s near 40-year history.


Columns of note

Writing in The Sunday Times, Matthew Syed examines biases in decision-making, and how fixating on one aspect of a fast-changing situation can cause people to miss other crucial developments. Using some historical examples, he likens this phenomenon to the scientific experts advising the UK on Covid-19, arguing that they were so convinced early on that we were dealing with something similar to the flu, that they never stopped until much, much later, after many key decisions had been made, to consider whether this was actually the case. (£)


In the Telegraph, Nick Timothy criticises what he sees as the “chaos” of the current devolution settlement across regions and local government, which he argues has blunted an effective response to Covid-19. He says: “At almost every level, accountability and responsibility – particularly budgetary responsibility – are misaligned. As a result, we have public services led by officials accountable to nobody, local government that cannot govern, mayors with so few powers that their time is spent lobbying ministers, and devolved governments that blame policy failures on England.” (£)

Source: The Times


Markets


The week ahead


Today sees the start of a World Health Organisation virtual two-day meeting of health ministers from 194 countries. The key item on the agenda will be a resolution from the EU on how nations can jointly tackle Covid-19.


There will be more easing of restrictions in some European countries, with shops and bars reopening in Italy, some schools functioning again in Portugal and some Spanish regions, such as Valencia, beginning to emerge from lockdown.


Senior figures from central banks are facing political scrutiny, with Federal Reserve chair Jay Powell and Treasury Secretary Steven Mnuchin testifying online before the Senate banking committee. In the UK, Bank of England governor Andrew Bailey will address the Treasury Select Committee about the economic impact of Covid-19 on Wednesday. The latest public sector borrowing figures, due on Friday, will likely add more gloom to whatever Bailey says two days beforehand.


And at the end of this week, on Friday, the long-delayed National People’s Congress will take place in China. It had been scheduled for early March and will offer the rest of the world at least some insight into what the ruling communist party will do next.


Significant earnings announcements this week include Walmart (US) and ASDA (UK), Marks and Spencer (UK, Expedia (US), Severn Trent (UK) and Alibaba (China).



What's happening today?


Finals Centamin Lxi Reit AGMs Alliance Pharma Bank of Georgia Faron Pharma Sigmaroc


EGMs Alcentra Gbp 


Source: FTSE 100, Financial Times


Did you know?

Every single house in Uruguay has its own unique name.


Parliamentary highlights


House of Commons

Oral questions

HM Treasury


Oral questions

Transport


Ministerial statement

Department of Health and Social Care: Covid-19 Response


Legislation

Immigration and Social Security Co-ordination (EU Withdrawal) Bill: Second Reading


House of Lords

Oral questions


Government support given to GAVI, the Vaccine Alliance, as a result of the COVID-19 pandemic - Virtual proceeding - Baroness Anelay of St Johns


Adjusting the restrictions in place for those isolating due to the COVID-19 pandemic - virtual proceeding - Lord Blunkett


When the government intend to lay the regulation giving effect to the age-appropriate design code required under section 123 of the Data Protection Act 2018 before Parliament - virtual proceeding - Lord Stevenson of Balmacara


Addressing privacy concerns about the use of the NHS COVID-19 contact tracing application and the introduction of immunity certificates - virtual proceeding - Baroness Jones of Moulsecoomb


Private Notice Question

Customs posts in Northern Ireland - virtual proceeding - Lord Empey


Orders and regulations

Draft Human Tissue (Permitted Material: Exceptions) (England) Regulations 2020; Human Tissue Authority draft Code of Practice A: Guiding principles and the fundamental principle of consent-revised 2020; Human Tissue Authority draft Code of Practice F: Donation of solid organs and tissue for transplantation-revised 2020 - virtual proceedings - Lord Bethell


Debate

International response to COVID-19 - virtual proceedings - Baroness Sugg


Statement

Housing update - Lord Greenhalgh


Scottish Parliament

No business scheduled