Some Water, Jair? (2 min read)

Macron water

As millions of hectares continue to burn at an unprecedented pace – now reaching as far as Bolivia – Brazilian President Jair Bolsonaro firmly rejected an £18m aid package offered by the G7 last Monday. Further, Bolsonaro not only made it clear that the fires in the AmazAonas region are a matter of national sovereignty for Brazil, he also commented that the current administration is fully capable of managing the situation. But all that changed last Tuesday.

After deploying more than 40,000 troops in the Amazonian region to fight the fires, Bolsonaro has now said that he will also accept the aid package offered by the G7 – but only if the French President, Emmanuel Macron, takes back his attacks. According to Bolsonaro, Macron allegedly had call him ‘a liar’ as well as accused him of questioning Brazil’s sovereignty over the response to the wildfires.

The fires in the Amazon aren’t the only problem the Brazillian President is attempting to fight. The Brazilian economy is suffering from a prolonged economic malaise and an unemployment rate that remains in the double-digits, taking his disapproval to the new high of 53.7%

Environment, health, and education are the areas raising the most concern among Brazilians. But many also disagree with Bolsonaro’s ‘offensive’ communication style, especially his response to the French President’s offer of aid: ‘Thanks, but maybe those resources are more relevant to reforest Europe’. To make matters worse, he continued, ‘Macron cannot even avoid a predictable fire in a church that is part of the world's heritage, and he wants to give us lessons for our country?’

These communications were made to the local news agency, O Globo, and come just days after Bolsonaro blamed NGOs for causing the fires (with no proof when asked). Bolsonaro may swing his accusations where he likes, but scientists and NGOs are in agreement against him: the fires in the Amazon are caused principally by human activity.

Amazon Fire

Is Bolsonaro the One to Blame?

Bolsonaro has been largely criticized for his extreme environmental de-regulations in his attempt to boost the depressed Brazilian economy. One of this most controversial policies aims to provide unrestricted permission to deforest in order to allow agricultural activities. Choosing Ricardo Salles as Environment Minister is just another example of Bolsonaro’s apathy towards the environment: Salles was found guilty of altering maps to benefit mining companies when serving as Environmental Official in Sao Paulo in 2018. Also, during the current administration, the number of wildfires in the Amazon has jumped 79% when compared with the number of fires in 2018.

While battle of political egos continues, the natural disaster remains without real attention, or at least not with the same attention as the one generated by the fire in Notre Dame, when US$1 bn. was raised in a record time of 2 days.

Miguel Ovalle has been a credit analyst covering Latam spectrum for corporates and macroeconomics related issues. He previously worked within S&P Global as a credit research analyst. He can be contacted here.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)

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