Bolsonaro Elected President of Brazil: Now What?

He was elected in one of the most polarizing run-offs in Brazilian history.

He said that he would “stamp out corruption after years of left-wing rule. We cannot continue flirting with communism. We are going to change the destiny of Brazil.”

This (reserve) army captain and former paratrooper, infamous for lashing out at women, minorities, and indigenous groups, has been called a “tropical” Donald Trump.

His election victory was warmly welcomed by Steve Bannon who had met Jair Bolsonaro’s son, Eduardo Bolsonaro, in New York City.

Jair also has been compared to the gun totting populist nationalist Rodrigo (Rody) Duarte, the president of the Philippines.

Jair Bolsonaro’s election to head Latin America’s most important economy shocked as well as excited many outside observers.

On the left of the political spectrum he was universally seen as an existential threat.

To those on the right of the political spectrum he offered the hope of a fundamental change in Brazil’s domestic and international policies.

He also promised a closer alignment with the United States after years of estrangement and suspicion under (Worker’s Party) PT governments when Brazil perused a South-South foreign policy, and established close relations with the BRICS group of large emerging economies, and with China in particular, which became Brazil’s largest trading partner and a major investor.

Despite serving for 27 years in Congress as a representative of Rio de Janeiro, Bolsonaro had been an outsider in Brazilian politics, and he has a record of making extremist nationalist, populist right-wing comments.

Bolsonaro was nearly fatally stabbed in the abdomen during a campaign rally. He underwent immediate surgery in Juiz da Fora where the assassination attempt took place and then in São Paulo. He spent weeks in hospital recuperating, before he returned to his apartment in Rio de Janeiro where he conducted his campaign via twitter, the internet, and through carefully chosen television interviews.

He was scheduled to have his colostomy bag removed in a surgical operation at the Albert Einstein Hospital in São Paulo on the 12 December, but following medical examinations this has been postponed until after he takes office.

Which makes some Brazilians with a historical memory worry.

Tancredo Neves, the first civilian to be (indirectly) elected president of Brazil after military rule, was much sicker than was publicly admitted at the time and he died before he could assume office.

What are Brazil’s prospects under a Bolsonaro presidency? 

Will he practice what he has long preached?

Economics: Liberalism without Liberty?

The economic policies of the Bolsonaro government are already clear.

He has appointed a team of competent and experienced neo-liberal economists to conduct it, and he has promised them a free hand.

The problem is that some of them are also well known for not recognizing that liberal economic policies in Latin America can sometimes be conducted without liberty.

The “guru” in Bolsonaro’s case, the unapologetic “Chicago boy,” Paulo Guedes, worked at the University of Chile under military intervention during the Pinochet regime where his fellow Chilean “Chicago boys” were also given a free hand.

Bolsonaro has scheduled his first official presidential visit to Chile after he is inaugurated.

Bolsonaro thus promises a major shift in Brazil’s economic policy.

Paulo Guedes, a disciple of Milton Freidman will be his economic czar, commanding the merged finance, industry, trade, and planning ministries.He has brought another University of Chicago educated economist, Joaquim Levy, into a senior managment role, as president of the Brazilian Development Bank (BNDES)

Joaquim Levy was trained as a naval engineer. His Chicago PhD in economics was awarded in 1992. He comes from the position of managing director and World Bank Group financial officer. He joined the World Bank in February 2016 having served in 2015 as the Brazilian Finance Minister under Dilma Rousseff (though she rarely took his advice). He has strong international and national credentials and has worked in both the private sector and for the government.

Guedes has nominated another Chicago trained post-graduate economist, Roberto Castello Branco, who will become the president of Petrobras. Roberto Castello Branco has previously worked at the Brazilian Central Bank and for Vale, the Brazilian multi-national mineral company. He is also known for recommending in the past the sale of Petrobras’s refining and distribution networks and criticized Petrobras’s control of prices.

The new president of Brazil’s Central Bank, who will replace Iian Goldfajn, will be Roberto Campos Neto (49) who is currently with Santander Bank where he has been for the past 18 years. He has a post-graduate degree from UCLA. He is the grandson of Roberto Campos (1917-2001) who was a very well known (and brilliantly acerbic) Brazilian liberal economist who was minister of planning under General Castelo Branco, the first military ruler of Brazil after the military coup in 1964.

Paulo Guedes has established a new secretariat for privatization which will be part of the ministry of the economy. Its mission will be to coordinate the sale of state assets such as property and public lands under the Bolsonaro government.  In the past Guedes declared that some R$ 1 trillion could be privatized as a way to reduce the public debt.

The businessman, Salim Mattar, from Minas Gerais, has been chosen by Guedes to head the new secretariat. Salim Mattar is the founder and owner of Localiza, one of the largest car rental and leasing businesses in the world  He is also a member of the Insitute Millenium founded by Guedes to promote economic liberalism.

The economist Rubem Novaes, will be the next head of the Banco do Brasil, Pedro Guimarães will head of the Caixa Econômica Federal, and Carlos Von Doellinger will head of Ipea (the Institute for Applied Economics).

Guimarães has a PhD in economics from the University of Rochester, and has worked in the private sector at various private banks, Novaes who has a PhD in economics from the University of Chcago, where he studied at the same time as Guedes and has been a professor at the Getúlio Vargas Foundation and a director of BNDES. He is associated with the Instituto Liberal in Rio de Janeiro and has written a book on foreign investment in Brazil. He has headed the national confederation of industries (CNI). Carlos Von Doellinger was secretary of the national treasury and president of the Bank of the State of Rio de Janeiro (Banerj)

The major decisions on the horizon involve the sell-off of parts of the Brazilian state controlled petroleum company Petrobras, as well as the acceleration of the auction of blocs of Brazil’s deep water off-shore (“pre-sal”) petroleum reserves, as well as the potential privatization of Petrobras’s refineries, and its domestic market distribution networks.

Roberto Castello Branco has said that he has “no mandate to consider selling the whole company” only the refinary network.

But all these will be controversial measures.

Petrobras, the semi-public Brazilian multinational corporation in the petroleum industry was established by Getulo Vargas in 1953, and has long be a loadstar in Brazil’s statist and nationalist crown.

The Brazilian government currently owns directly and indirectly 64% of the company. It is 58 in the most recent Forbes global asset assessment.

Petrobras has been mired in corruption scandals in recent years and was at the center of criminal investigations, and subject to multi-billion dollar settlements in the US and in Europe.

Disputes over the cost of fuel on the domestic market caused one of the most remarkable strikes in recent Brazilain history, where truck drivers were mobilized using WhatsApp, and brought the whole country to a standstill, and forced major concessions from the Temer government.

The mobilization of the transportation strikers proved to be a rehearsal  for the presidential election where the influence of social media (WhatsApp, Twitter, and Facebook) far outweighed the traditional print-media as well as television where the major political parties had privileged access and large times slots and concentrated their electoral propaganda.

The social media was the hidden factor in the victory of Bolsonaro in terms of its reach and access and opinion sharing, the use of internet bots, a software application that runs automated scripts or tweets over the internet, as well as the vulgarization of “Fake News.”

Bolsonaro realized the power (and the cheapness) of use of the social media early on, and he and his sons were active in campaigning on-line.

Justice: Corruption and Law Enforcement

Bolsonaro has appointed Federal Judge Sérgio Moro (46) to be the new minister of justice and public security in his administration.  Sergio Moro conducted the “Lava Jato” investigations which brought former president Lula da Silva to imprisonment in the Federal Police HQ in Curitiba, Paraná, where Moro was the Federal Judge.

Sérgio Moro’s actions were not without criticism, especially from the PT, which saw him as biased against them, an opinion only fortified by his acceptance of the justice and public security ministry under Bolsonaro.

Justice Celso de Mello of the Brazilian Surpeme Court said that Moro was creating a “nosy police state.”

Sergio Moro says he will bring a type of “Plano Real against criminality in Brazil.” The “Plano Real” was the measures which ended inflation and set Brazil’s path to regained international financial credibility. He will act he says against corruption, organised crime and violent crime.

Sergio Moro has brought into the ministry of justice several colleagues from the Federal Police in Paraná, including Mauricio Valeixo, the superintendent of the Federal Police in Paraná, who will become the director-general of the PF in Brasilia.

The “Lava Jato” (“car wash”) investigation and eventual convictions began in 2014 when a small scale money laundering investigation in Brasília discovered links to Paulo Roberto Costa, the director of refining and supply at Petrobras.

The case was unraveled by using plea bargaining in exchange for information (a technique ironically only approved under Dilma Rousseff) which led to further arrests.

Costa acknowledged overpaid contracts and the funneling of funds to personal accounts. He received 3% on all contracts. Petrobras was overcharging for construction and service work in return for some US$3 billion in bribes. It was in this web that major Brazilian construction companies and politicians were also caught.

The main targets of these investigations so far has been the PT and federal judge Vallisney Oliveira has opened a penal action against former president Lula and former president Rousseff, and ex-ministers of finance Antonio Palocci and Guido Mantega, and the ex-treasurer of the PT.

Lula is cited as being the “great idealizer” of a criminal organization between 2002 and 2016 when Dilma Rousseff was impeached, and which it is claimed involved the ministry of mines and energy, Petrobras, BNDS, and the construction companies Odebrecht, Andrade Gutierrez, OAS and UTC.

Political Dynamics

Jair Bolsonaro son, Flavio Bolsonaro (37) is the senator-elect for Rio de Janeiro and Eduardo Bolsonaro (34) is the re-elected federal congressman from São Paulo. Eduardo is a former federal polce officer and is pro-gun and is far-right in his politics.

He was re-elected with the largest vote in Brazilian congressional history.

Both will be key links between the Bolsonaro administration and the congress.

Another brother, Carlos Bolsonaro (35), ran his father’s twitter account and is a city councilman in Rio de Janeiro, having been the youngest councilman elected in Brazilian history in 2000 (he was cited as a possible govenment appointee in Brasília but could not hold the position because of Brazil’s nepotism rules.)

The most fraught and immediate problem is the reform of the social security system (Previdência).

Almost all economic experts agree that this is an essential reform if Brazil is to gain control of its future budgets.

But pensions for the military (at the federal level) and the police (at the state level) are substantial contributors to these chronic deficits.

As are the early retirement age for university professors for instance (which also makes them wary of reform.; As well as payments and pensions for the members of the judiciary.

The new health minister will be Luiz Henrique Mandetta (DEM), a congressman from Mato Grosso do Sul. Mandetta a orthopdedist (a surgical intervention to muscle-skeletal trauma, spine and sports injures,

He specialized in Children’s orthopedics and worked in the military hospitals (as a captain) in the 1990s (he was trained in Atlanta). He was previously the secretary of health in Mato Grosso do Sul, where he was charged with being involved in fraudulent bidding for contracts on acquisition of information technology. He was the coordinator of the medical lobby in the lower house of congress.

One of the most important consequences of Bolsonaro’s election was the rupture of the agreement with Cuba whereby thousands of Cuban doctors under a deal made by the PT government were in Brazil working in rural and marginalized urban neighborhoods.

Jair Bolsonaro has long attacked this deal, and Cuba is withdrawing these doctors before Bolsonaro takes office.

John Bolton, President Tump’s national security adviser, has already praised Bolsonaro’s attitude towards Cuba.

Bolton will visit Bolsonaro on his way to the G20 meeting in Buenos Aires

Alliances in Congress will bring many of the smaller parties into the Bolsonaro fold.

Also the DEM’s (Democrats) into de-facto alliance with Bolsonaro’s PSL (Social Liberal Party), The DEM’s are a right-wing party which has in roots in the official party of the military regime, but recast itself as a conservative party. The party has 29 seats in the lower house and 4 seats in the senate.

The DEM’s have several influential national and regional leaders, including Rodrigo Maia from Rio de Janeiro, currently the president of the lower house of Congress, and ACM Neto in Bahia, the grandson of the Antonio Carlos Magalhães, the long term power broker, and for many years the de-facto political boss of Bahia.

The most striking result of the election was not only the defeat of the PT’s presidential candidate, but the emergence of Bolsonaro’s PSL as a major force in the lower house of Congress.

But the PSL group of 52 newly elected congress members is already squabbling with Bolsonaro’s new chief of staff, Onyx Dornelles Lorenzoni (64). Onyx Lorenzoni is a businessman and veterinary, and a four term DEM congressman from Rio Grande do Sul, who was one of the most ferocious opponents of Lula’s government and the PT.

The senator elect for the PSL from São Paulo, Sérgio Olímpio Gomes (50) better known as Major Olímpio, says that he has tried to call Onyx 27 times without any response. Major Olímpio was with the São Paulo state police and is a security, self defense, and shooting instructor, who was elected to the lower house of the federal congress in 2014, and in 2018 was elected senator from São Paulo. Bolsonaro has said he does not want to hear the name of Major Olímpio!

The three blocs of potential support for Bolsonaro are composed of the agriculture and animal husbandry (agropecuária) lobby which will have some 427 deputies, of which Bolsonaro can count on at least 100;  The public security lobby which has 50 members; 30 from the Catholic group; and 100 out of the 198 members of the Christian fundamentalist group.

This overlaps with the powerful “gun, bible and beef” lobbies in the congress.

Tereza Cristina da Costa, the new minister of agriculture was coordinator of the agropecuária group in Congress. She is known as “the Muse of Poison” because of her support for relaxing control on pesticides.

The new minster of education is to be Ricardo Velez Rodrigues, a naturalized Brazilian citizen of Colombian origin. He taught at the school of the general staff the army and at the Pontifical Catholic University of Rio de Janeiro (PUC-RJ). Velez is known for his desire to remove “politics” from teaching and introducing “moral and christian” values.

His appointment was a victory for the evangelical lobby, and for the “guru” of the far-right, the U.S. based Brazilian “philosopher” and prolific blogger and tweeter, Olavo de Carvalho, who supported him.

Clovis Rossi, a long time columnist of the “Folha de São Paulo” says that “an ayatollah has taken over education in Brazil.”

The Role of the Military

Captain (reserve) Bolsonaro as president, and General (reserve) Hamilton Mourão as vice-president, represent the stealthy militarization of Brazilian politics via the ballot box.

But this is building on the actions of the Temer government when Temer sent the military into Rio de Janeiro to combat rampant crime under the command of an army general.

The elections also brought 35 former military men into the lower house of the Congress and 5 into the Senate.

In addition, 50 were elected to State Legislatures.

The new head of institutional security (GSI) will be General Augusto Helena who commanded the UN peace keeping forces in Haiti.

The new defense minister is to be General Fernando Azevedo e Silva who was chief of the general staff of the army and was recently the adviser to the president of the supreme court, Dias Toffoli.

The new minister of science and technology will be the Brazilian astronaut,  Marcos Pontes. Pontes who lives in Houston is a Brazilian Air Force pilot, engineer, and was the first lusophone to go into space in 2006 aboard the Soyuz MMA-8 space station.

General Maynard Marques de Souza Rosa, who was sacked by Lula for criticizing the “Truth Commission” which investigated the use of torture by the military during the military regime, has been brought back as an adviser.

Foreign Policy

Ernesto Henrique Fraga Araújo (51) Bolsonaro’s nominee to be Minister of Foreign Affairs in his administration is a career diplomat who is currently the director of the US, Canada, and Inter-American Affairs division of the foreign ministry (Itamaraty). His views are also well known and his appointment was recommended to Eduardo Bolsonaro, by Olavo de Carvalho, a right-wing US based Brazilian journalist, writer, blogger and tweeter, and self proclaimed “philosopher.” (He lives in self-imposed exile from the PT regime in Virginia). Jair Bolsonaro had Olavo de Carvalho’s latest book in front of him on his desk (“The minimum you must know in order not be a Idiot”) in his Rio de Janeiro apartment after his election victory (along the Bible and a copy of the Brazilian Constitution).

Olavo de Carvalho has long been an advocate of Jair Bolsoano.

In November 2017 he wrote that “the popularity of Bolsonaro is explained by this very simple factor, as much for his ideas as for his personality he represents the opposition to the Party (PT), but above all, to the establishment (the media included.”)

He has called the PT the “Party of the Terrorist.”

He wishes to guide Brazil and the world to liberate them from the the ideology of globalism.

“Globalism and economic globalization which is guided by cultural Marxism. It is a anti-human and anti-Christian system.

” It aims to create “an socialist axis in Latin America under the auspicious of a Maoist China in order to dominate the world.”.

Ernesto Araújo. a former student and follower of Olavo de Carvalho has also outlined his philosophy in a series of blogs, tweets, and articles including an analysis of “Trump and the West.”

He believes climate sciences is “dogma” and bemoans the “criminalization of red meat, oil, and heterosexual sex.”

He claims that “cultural Marxists” have stifled western economic growth and promoted the growth of China.

He is also adept at twitter.

Jair Bolsonaro has expressed strong views on foreign policy questions. He has long attacked the PT alliances in Latin America with the “Bolivarian” left-wing regimes. He has attacked Mercosur and said Brazil would leave the trade bloc. He has said he would move the Brazilian embassy in Israel from Tel Aviv to Jerusalem. He has long attacked the Maduro regime in Venezuela. He has said that  “China is not buying in Brazil, it is buying Brazil.”

He is very pro-American and pro-Israel. He was baptized in the river Jordan. He is very anti-Cuba.

The U.S. response has been enthusiastic in some sectors and cautiously optimistic in others.

Thomas Shannon, a former top State Department official and former ambassador in Brazil, now working with a leading Washington law firm with long interests in Brazil, says that Bolsonaro offers  “a big opportunity to do things with a government that wants to talk and sounds like the one here.”  He mentioned increased security and scientific collaboration and research.

But he thinks that “we won’t do things in a big strategic way, Just get them to help us on Venezuela and Nicaragua and then walk away.”

Shannon has also suggested that Brazil might join NATO.

Others are more cynical.

One White House official said “if we quickly embrace Bolsonaro we can help shape him.”

John Bolton has been much more explicit condemning Cuba, Venezuela and Nicaragua as “a Troika of Tyranny.” and “the cradle of communism  in the Western Hemisphere.”

But Brazilian agro-business and iron-ore producers have pointed out to Bolsonaro that China is Brazil’s biggest market, and that moving the Brazilian embassy to Jerusalem will alienate Middle Eastern states which are large importers of Brazilian beef. The Middle Eastern ambassadors have also said this directly to Bolsonaro.

And Brazil also has a large population of middle eastern origin, including the current president Michel Temer. So Bolsonaro has already back-tracked on some of his earlier assertions.

But President Trump welcomes these views of Bolsonaro, as does John Bolton.

And Eduardo Bolsonaro will be visiting Washington DC shortly where he will speak with senior administration officials and at the American Enterprise Institute.

Environmental Policy

Jair Bolsonaro has chosen Tereza Cristina Dias nicknamed the “muse of poison” because of her views on relaxing controls pesticides.

While she was secretary of agriculture in Mato Grosso do Sul it is claimed she granted tax breaks and did business with meat processors JBS at the same time. These kickbacks through 2016 are estimated to be worth US$40 million over the past 13 years. JBS is owned by the Batista brothers who are already in trouble  because of a secretly recorded conversation with the current President Michel Temer and which could still lead to Temer’s arrest when he leaves office in January. Tereza Dias is in judicial dispute with JBS over the livestock on one of her rural properties in Mato Grosso do Sul.

Bolsonaro has also created a special secretariat for rural property owners (secretária especial de assuntos fundiários) and named his old friend Luiz Antônio Nabhan Garcia to head it.

Nabhan Garcia is the president of the UDR (União Democrática Ruralista).

He aims he says in his new position to make ” a healthy reform program, without (land) invasions.”

But the UDR is notorious, for organizing arms, contraband and militias.

And for its opposition to the land takeovers by the landless worker’s organization said which has seen much violence in rural areas.

He also supports the deforestation of the Amazon in the interests of expanding agriculture.

He has been Bolsonaro’s main point of contact with the big agricultural landowners.

But the environment and the fate of the Amazon rain forests are questions that engages a world wide audience and is a especially sensitive question as far as the Brazilian military, security, and foreign policy elite is concerned.

They tend to see ecological concerns with the fate of the Amazon rain forests as a means of diminishing Brazil’s potential.

In the words of the new Brazilian Vice President, General Hamilton Maurao “environmentalism is used as an instrument of the advanced economies for indirect domination…environmental xiitas,  non-govenmental organizations..take away the potential of our country.”

Bolsonaro has already entered into a polemic with Norway over the Amazon.

The potential stripping away of indigenous protections and rights, and the opening up lands to mineral exploitation and rain forest clearance will undoutedly cause major international concern and reactions.

Especially since Bolsonaro has threatened to leave the Paris Climate Agreements, and over the last year deforestation in the Amazon reached unprecedented levels.

Challenges

The problems which have divided Brazil remain as toxic and endemic as before the election.

The result of the election was a repudiation of the two political parties and the political leadership which has dominated Brazil for the past 25 years.

But Brazil remains a divided country.

Intolerance and the angry demonization of opponents on both left and on the right remains deeply entrenched.

Chronic violence remains. Heavily armed militias and drug gangs and international narco-trafficking continue to link Brazil to international criminal networks, and dominate large swaths of the marginal neighborhoods and the favelas in all of Brazil’s major cities.

The murder rate remains astronomical.

Social and racial inequality is still among the worst in the world.

Jair Bolsonaro may have seemed a solution to these chronic problems to many voters in Brazil.

But more guns and bluster may not be the answer.

Not all opponents are agents of a globalized communist conspiracy led by China.

Even though Steve Bannon, John Bolton, Olavo de Carvalho, and Jair Bolsonaro may think so.