RIO DE JANEIRO, BRAZIL – A series of nine meetings between Congressional leaders and important businessmen, bankers, and financial market representatives, has resulted in a political movement for intervention in the directions of Jair Bolsonaro’s government.
The more than 300,000 deaths in the Covid-19 pandemic and the increasingly unsustainable situation of the economy have led the presidents of the House of Representatives, Arthur Lira, and of the Senate, Rodrigo Pacheco, to fine-tune their discourse with the market. Both have put forth impeachment as a possibility if the talks with the government fail.
The most urgent demands from the business sector are the resignation of the ministers of Foreign Affairs, Ernesto Araújo, and the Environment, Ricardo Salles. The recurring evaluation in the meetings is that Araújo is hindering the negotiations for vaccines and inputs from India and China. Salles, who is in charge of the much-criticized Brazilian environmental policy, is seen as an obstacle in the relationship with Washington, especially now that the country is targeting obtaining surplus vaccines from the United States.
Lira and Pacheco’s contacts argue that, in this specific case, it is wrong to read that the pressure for the exchange of the two ministers – verbalized by them – is aimed at dividing the government, a constant demand of the Centrão. The intention is to meet the main demand of the business sector and, in addition, to guarantee an “image gain” before their new interlocutors.
Last Monday night, Washington Cinel, a private security businessman, received the presidents of the House and Senate at his home in Jardim Europa, in São Paulo. Luiz Carlos Trabuco Cappi (Bradesco), Carlos Sanchez (SEM), and André Esteves (BTG Pactual) participated in the face-to-face and remote meeting.
The dinner table conversations were preceded by brief speeches by Lira and Pacheco, host Cinel, and fellow businessmen Abilio Diniz and Flávio Rocha, who spoke via videoconference. One of the harshest manifestations was that of Pacheco. But, according to those present, there was no “pamphleteering tone” in public.
The businessmen reported that the health crisis blocks foreign investments and directly affects IPO plans. “Whoever wants to do an IPO can’t get great results, because nobody is sure about putting money into Brazil, mainly because of the sanitary condition”, said Congressman Dr. Luizinho, present at the meeting.
Dinners like this one take place regularly. The meetings are promoted once a month by figures like Cinel and João Camargo, son of former congressman José Camargo. According to one parliamentarian who has been to the gathering, they get together to drink wine and invite a politician to “sing”. Lira was the main guest this time. Pacheco was already in São Paulo and ended up being included.
Previously, Lira and Pacheco had been to the home of Claudio Lottenberg, the strongman of the Albert Einstein Israeli Hospital. There was a smaller group of businessmen from the health sector. The conversation was about the shortage of sedatives and painkillers, drugs used for intubation of patients with severe symptoms of Covid-19, in Intensive Care Units (ICUs). The shortage affects both public and private hospitals.
The Congressional leaders have also visited Febraban, Fiesp, and participated in closed agendas in São Paulo with important personages. On March 2, Pacheco met with Milton Maluhy Filho (Itaú), Octavio de Lazari Jr. (Bradesco) and Roberto Sallouti (BTG). A day earlier, the two politicians spoke at Fiesp to Abilio Diniz and Rubens Menin. On February 25 Lira had already met with Sergio Rial (Santander), among others.
Firing ministers can be traumatic for Bolsonaro. The replacement of Salles, for example, implies a rupture with the ruralist farm bloc from the center-west region, the sector that from the beginning supported the president’s campaign in 2018. Centrão leaders have made it clear, however, that the government’s survival depends on changes.
Vaccine
Another meeting of Pacheco by videoconference was organized on March 11 by the Brazilian Association of Real Estate Developers (Abrainc). Luiz Antônio França, president of the entity that brings together large construction companies, said that the objective of the conversation was to seek the best for the economy.
“What we perceive is an alignment between the two houses (of Congress),” said França. “And what is the best for the economy? First, solving the pandemic. Then, a country with investment and growth capacity,” he added. “The priority is to vaccinate.”
One complaint, in particular, marked the meetings attended by Lira and Pacheco. The businessmen highlighted that the measures to contain the pandemic’s advance depend on the Executive, which is why, this time around, there is no way to treat Bolsonaro with leniency.” This is a different situation from the voting process of the Social Security reform, for example. At the time, the president was against the proposal, but the Legislature shrugged its shoulders and approved the measure.
In line with businessmen and the market, leaders of the Centrão say that, in the face of the failure to control the pandemic, the president will no longer have the support of Congress. “Bolsonaro is on a razor’s edge. If things get out of control, if he wants to do everything his way, outside of science, have no doubt that we will run over him,” said Congressman Fausto Pinato.
Pinato warned that “nobody” wants to affront the president, but he needs to take the lead within a “global rationality,” and not in the “fearlessness” of the ideological wing. “Impeachment is ruled out, as long as he maintains that constructive dialogue. If there is a threat of institutional shock, or if he gets out of the rationality in fighting the pandemic, nobody will jump in the hole with him,” summarized the parliamentarian.
For businessmen, it is necessary to control the president
In recent weeks, businessmen, bankers, economists – the elite of what is conventionally called the “financial market” – have made it clear that their patience with the Bolsonaro government has come to an end. A letter written by a group of economists (but also signed by heavyweights of the national GDP) demanding a radical change in the direction of the federal administration, both in terms of the fight against Covid-19 and in the economic area, has become the most visible face of this dissatisfaction.
But the conversations and coordinated strategizing go far beyond this.
The change in the command of Congress, with the arrival of Arthur Lira to head the Chamber of Deputies and Rodrigo Pacheco to head the Senate, according to entrepreneurs, has cleared a new path for their demands. Not surprisingly, according to Estadão newspaper, the two politicians have met on at least nine occasions with groups of bankers, business owners, and executives. In the conversations, the tone is that it is necessary to “control” the president.
A businessman who participated in a meeting with both of them last week, in São Paulo, said, on condition of anonymity, that what is being sought, in face of the “catastrophic” management of the pandemic, is a dialogue with the Legislative branch, through Lira and Pacheco, two leaders who have shown themselves to be “sensible”.
According to him, with the president no dialogue has been possible, since Bolsonaro can’t go into depth on any subject and “only makes jokes and uses curse words”. Lira and Pacheco know the gravity of the situation and are acting as interlocutors, he said.
According to this businessman, one of the points that has most worried businessmen is the “bad” image of Brazil abroad – which directly harms business. This bad image is very much linked to Ministers Ernesto Araújo of Foreign Affairs, and Ricardo Salles of the Environment. According to him, ESG (environmental, social, and governance) issues have been weighing heavily against the country’s global image, and the government has done nothing.
Lira and Pacheco also met last week, twice, with the presidents of the largest banks in the country. The Brazilian Federation of Banks (Febraban) reported that the meetings were scheduled for the CEOs of the banks to meet the new presidents of the Houses and also for the sector to convey to them the main concerns of this time.
At the meeting, according to sources heard by Estadão/Broadcast, the president of Febraban, Isaac Sidney, said that the banks were not there to ask for new rules or to lobby. The banks, he said, want predictability to mitigate uncertainty and avoid new crises of confidence in relation to Brazil.
The president of Bradesco, Luiz Carlos Trabuco Cappi, who participated in a meeting with Lira and Pacheco last week, said that the conversations took place while the “severity of the pandemic is gradually disorganizing the economy,” and that political differences, at this point, have to be put aside.
“We have to use dialogue to mobilize society, workers, governments, parliamentarians, and businessmen in a front of solidarity if we want to overcome this crisis, which has already taken on the characteristics of a humanitarian crisis,” he said. “The disagreements and political fights can be left for later.”
Rubens Menin, chairman of the boards of the MRV group and of the Brazilian Association of Real Estate Developers (Abrainc), another person present at one of the meetings in São Paulo, evaluated that the country’s moment is “critical” because of the number of deaths. When asked if he is confident that Jair Bolsonaro’s government will be able to control the health and economic crisis, Menin avoided mentioning the name of the president and classified himself as an “optimist for Brazil”.
He said he believes in the acceleration of vaccination in the coming months and insisted on the speech he has been making since the beginning of the pandemic. “There can be no confusion between the state and federal governments. The fights will have to end or society will charge.”
Irritation
Although officially the businessmen say that the meetings with Lira and Pacheco are institutional, behind the scenes it is clear that both are seen as a fundamental part of the solution for the country’s crisis. But the solution through impeachment is still seen with reservations. According to a businessman who participated in these conversations, the process of impeachment is long and stressful and could further harm the situation in Brazil, as the president still has a large amount of popular support.
Behind the scenes, the irritation with the government is also clear. According to the president of one of the largest national trade associations, patience with Bolsonaro and the Minister of Economy, Paulo Guedes, is running out. For him, what moves the business community is the economy, and the obviousness of the poor performance and the total absence of a plan and management capacity are starting to move even the sectors that have been successful during the crisis.
But there are those who make criticisms out in the open. “Jair Bolsonaro’s unpreparedness is leading to the collapse of health care and the economy. His mistakes are amply documented. The time has come to put a stop to all this,” said Ricardo Lacerda, founder and president of investment bank BR Partners. “The president needs to make a commitment to science and to people who work and leave ideology aside. If he is incapable of that, better to leave office.”
Source: Estadão