Thanksgiving, Transitions, Holidays and Hopes for a New and Better Year

My picture above is bittersweet.  It shows final remains of an old friend, an almond tree in my backyard.  For several years now, I have used this tree as a symbol and as a very grounded way to think about life, business and to thank and salute friends and clients, with many of whom we have maintained long term relationships.

As we all know, 2020 has been a decisively different year with the Covid19 virus, illness and death in our country and the world where we witness divisive forces pulling people apart.  All have been impacted.  My almond tree died this year and had to be cut down.  Some of us have been ill and some have suffered with or lost loved ones.  This is sad, but true, and also a lesson that there is a life cycle that we all are part of.  We need awareness and we need to recognize that we are connected in a universal network.  Hopefully, we engage with purpose, care and respect in our relationships, our business and in all our actions.

I am grateful to all and look forward to a new cycle of birth and growth.  This hard period will pass and I trust that 2021 will bring health, joy, prosperity and a sense of progress.

Happy Thanksgiving, Merry Christmas and a Better 2021

The picture below is of the tree that passed but is replaced by a new sapling.

(Texto em português)

Minha foto acima comove. Mostra os restos mortais de um velho amigo, uma amendoeira no meu quintal. Há vários anos, uso esta árvore como um símbolo e como uma forma de pensar sobre a vida, os negócios e para agradecer e saudar amigos e clientes, com muitos de vocês mantemos relacionamentos de longo prazo.

Como todos sabemos, 2020 foi um ano muito diferente com o vírus Covid19, doença e morte pelo mundo e onde testemunhamos forças não naturais ou normais separando as pessoas. Todos foram afetados. Minha amendoeira morreu este ano e teve que ser cortada. Alguns de nós ficamos doentes e alguns sofreram com ou perderam entes queridos. Isso é triste, mas também  é uma lição de que existe um ciclo de vida do qual todos fazemos parte. Precisamos de consciência e precisamos reconhecer que estamos conectados em uma rede.  E através o contatos, amizade e negócios, desenvolvemos acoes produtivas.

Expresso minha gratidão pelo trabalho e pela amizade.  Prevejo um novo ciclo de criatividade e crescimento.  O período difícil passará e confio que o novo ano 2021 trará saúde, alegrias, prosperidade e progresso.

Brazil: Elections Breaking Good; Economy Breaking Bad

Brazilians Celebrating the Victory in Municipal Elections 2020 (Source Portal da Cidade, Lucas do Rio Verde, MT)

Brazil’s first round of municipal elections is over.  The elections transpired in a normal fashion with little or no disruption or violence.  In a country where the vote is supposed to be mandatory, about 1/3 of the electorate did not vote and are now subject to a small fine.  The election covered all of Brazil’s more than 5000 municipalities and tens of thousands of candidates representing over 35 different political parties.  Mayors and municipal or city council members all ran at the same time and the election is a rehearsal for the Presidential and state and national legislatures which will be held in 2022.  Brazilians vote at electronic stations and the results are normally announced within a few hours of the closure of the polls.  This was the case and the Brazilians tend to laugh at the US and the difficulty of the vote count and then fail to understand the role of Electoral College. 

The election was important for several reasons.  First, Brazilians even while alienated from and, generally disrespectful of politicians, still want to vote and the practice serves to strengthen a young democracy.  Second, the municipal elections are meaningful because the voters especially in the thousands of towns with less than 100 thousand inhabitants usually know a bit about the characteristics of their candidate and vote for the person.  Party labels mean little.  Third, because the vote is for the person, there is less polarization.  In the city of Sao Paulo, for example, there will be a runoff between a leftist and a centrist and this pattern has repeated in numerous other cities.  Fourth, the right-wing populism embodied by President Bolsonaro, while still winning seats, declined in the number of votes received.  Rightfully or wrong, the left has interpreted this as their gain and a chance to oust the President in two years.  Still, a lot can happen in that period of time.

So well-run elections with a secure count and significant voter participation are good points in improving Brazil’s political structure.  It also noteworthy that minorities: women, people of color (often by self-proclaimed identity), homosexuals and transgendered people were also elected.  Certainly, although white males still dominate in the power structure, there is room for the growth of diversity. 

One way of understanding Brazil’s political system is to look through the lens of repression tempered by the filter of cooptation.  When the system comes under intolerable stress, the military have been called as was the case of the first years of following the declaration of the Republic in 1889, the Estado Novo from 1937 to 1945, and the military governments from 1964 to 1985.  When the system is not authoritarian, it uses cooptation and often in a populist manner attempts to anticipate the demands of the population before they are actually manifest.  President Dilma Rousseff’s impeachment in 2016 resulted from the unruly street demonstrations just prior to the World Cup (2014), the declining incomes, opportunities and economic unwinding that her administration brought about.  While unpopular on the left, her ouster opened the way for Bolsonaro and his moralistic, populist, anti-crime and anti-corruption rhetoric which won the day back in the last presidential election (2018). 

While voting and elections bring civic participation and help strengthen democracy, they do not necessarily solve problems.  In the buildup to the vote, they create an opportunity for questioning and interchange, but words and ideas have to be translated into policy, action and investments.  Moreover, those elected have to deal with economic, social, and political realities within an institutional setting that typically inhibits or impedes action.  A new mayor, governor, or president is elected but they do not have the political and economic resources to change things.

Bolsonaro was elected as a remedy to the actions and the failures of the 21st century governments, especially due to the perceived strong upswing in corruption, violence, crime. In addition, there was the failure to deliver the economic fruits that had been so highly touted, promised and anticipated.  Brazil hosted but lost the World Cup.  The country could not deliver development to the “FIFA  world quality” standard it promised.  Similarly, the 2016 Rio Summer Olympics were further marred by the collapse into the ocean of the Tim Maia bike path, the murky green waters of the diving pool, the poor quality of athlete accommodations and more importantly the failure to deliver basics such as sanitation and the clean-up of the Guanabara Bay.  Between 2010 and 2016, things fell apart and were epitomized by the Lava Jato scandals and the near bankruptcy of Petrobras and the oil economy.  For her inadequacies and role, President Rousseff paid the price.

Bolsonaro’s ascension was an answer but certainly not a remedy.  Currently, after 2 years in power, the administration can only be remembered for its failure to deliver.  The President is naturally uncouth but the main problem is that his political weakness has not permitted his government to implement the reforms promised.  Although the government passed one substantial reform of the social security system, this has been watered down and any impact will take years to be felt in terms of solving Brazil’s spending and debt crisis.  The Covid Pandemic forced emergency measures which have brought government debt to close to 100% of GNP.  The real has weakened about 30% since the end of 2019.  And while the government promotes the illusion that there is a V shaped recovery, the fact is that Brazil’s economy has shrunk back to the size it was a decade earlier with no real prospects for vigorous growth.  Foreign capital is fleeing the country and investment from abroad has dropped from 80 billion per year to something around 50 billion dollars in 2020.  Poverty is growing rapidly and the streets of Rio and other large cities are filled with the homeless who cannot find shelter, even in the favelas.  The press reports close ties between the Bolsonaro family, the strengthening of criminal gangs, assassinations and militias that already have begun to form Mexican style cartels that control much of the geography of Rio de Janeiro and other cities and states.  At the same time, the President actively seeks reelection in 2022 and has reverted to the political machinations which he previously rejected during his campaign.  Horse trading, political buyoffs and favoritism are again the mode of operation and the way that the government hopes to preserve its tenuous grip on power.  In all, it is not a pretty picture and there is increasing opposition within the military (in spite of their presence in the government) and among the industrial elites.  Inflation may yet reemerge as Brazil goes deeper into debt and the game of who will hold the bag when the music stops begins once again.

The election was a positive point in an economy already in a chaotic state and the Covid19 has poured much fuel onto this fire.  Brazil has surpassed 150 thousand deaths and the number of infections is on the rise again in spite of the Spring and Summer.  Still, not all is as bad as might be perceived from the USA or Europe.  Most Brazilians have avoided Covid, most continue to work, most have food on the table. People, against medical recommendations and good sense, are still agglomerating on the beaches.  Foreigners living in Brazil still see cordiality and patient resignation, perhaps tempered by complaints that go unaddressed.  People accommodate as has been traditional in Brazil.  This accommodation may be frustrating but it also something that has kept the country from rupturing.  It remains to be seen if the newly elected officials will make much of a difference and if their newly minted optimism will lead to change.  As Brazilians love to say, things are shitty but they’re good.

Sonho e Ilusão: Brasil

Reuters: Sonhos de Democracia, Brasil 2013

“O povo toma pileques de ilusão com futebol e carnaval.  São estas as duas fontes de sonhos” Carlos Drummond de Andrade.

Os sonhos são ilusões mas dizem que são enraizadas na realidade.  As vezes os sonhos encantam, são românticos, eróticos ou apenas sentimentais.  Às vezes, vem os pesadelos e acordamos assustados, ansiosos ate descobrirmos que não é realidade.

Assim é o Brasil.  Sabemos que o país tem suas belezas, tem um charme real e permanente, tem as pessoas bonitas, as crianças e tradicionalmente a alegria e a esperança que são características básicas dos Brasileiros.  Uma realidade que não é sempre palpável assim como no sonho.

As festas de Iemanjá no Ano Novo são um exemplo.  A multidão se veste de branco e passa a noite nas praias para honrar os Orixás ou ao menos a beleza do espetáculo.  Um sonho que termina ao amanhecer do primeiro dia do ano com toneladas de lixo no mar, na praia e em toda parte.  Ah … ilusão.

E logo depois, ainda no início do ano, em fevereiro, tem Carnaval.  Os enredos das escolas de samba do Rio e São Paulo demonstram a exuberância da cultura e os sonhos de riqueza, igualdade e fim da discriminação.   Assim o Brasil tem sua fama de promover como um sonho e, com alegria, a maior festa do mundo.  O carnaval se estende pelo país inteiro.  E depois do Carna…vem a ilusão.

Durante os 40 dias apos o carnaval, entramos na Quaresma, que inspirada no periodo de provacao em que Jesus passou no deserto a pao e agua. e ao exemplo Dele, pagamos penitencia pelos pecados e excessos praticados durante o carnaval,  culminando com a Semana Santa, que é a celebração mais importante do Cristianismo . Semana Santa termina com a paixao de Cristo na sexta-feira-da-paixao, Sabado de Aleluia, que é celebrado com mais festas carnavalescas e finalmente a Pascoa, com muito chocolate para celebrar Jesus ressuscitado.  E Para quem pode, folgar mais uns dias longe da rotina e realidade do trabalho.  Para quem não pode, a vida continua que nem a procissão de fiéis seguindo as promessas dos santos e santas.  So entao, la pelos meados de abril, terminadas as procissões e confissões, o ano começa de fato ou na ilusão.

E por aí vai, com comemorações que prometem alívio e ajudam a manter a passageira esperança.  O americano Henry David Thoreau, escreveu no século 19 que as pessoas vivem quietas em seu desespero.  O brasileiro é diferente e, ao contrário do americano, vive ativamente buscando a esperança.  E como o povo é mais pobre e carente, agarra-se a qualquer palha ou palhaço, nem que seja Tiririca.

Os brasileiros são extremamente sensíveis e conscientes de poder e limites de aproximação e distanciamento social.  Ha a ideia, o sonho ou talvez a ilusão de que a vida nos EUA ou na Europa seja melhor e ofereça mais oportunidades.  Assim os brasileiros são normalmente agradáveis com estrangeiros por vezes mais por interesse próprio do que por altruísmo.  Afinal os gringos supostamente têm mais recursos.  Então é muito comum o namoro entre um estrangeiro e uma brasileira.  Isso porque a assimetria de poder e a atração favorece o masculino e ainda mais o estrangeiro.  A relação entre um homem brasileiro e uma mulher estrangeira por sua vez, embora possível, acontece relativamente pouco já que a mulher americana ou europeia enxerga o brasileiro, como vítima de machismo, menos poderoso e, portanto, com menos potencial.  Naturalmente ha muitas exceções.  A questão aqui é que existe atração, afeto, e ilusão mas tudo temperado pela percepção e também pela posição dentro da estratificação social.  Pode-se contestar o exemplo acima, mas refletindo honestamente, acaba-se por confirmar.  O brasileiro sonha que é machão mas sabe no seu íntimo que está iludido.

No Brasil a ilusão precede, seguida da desilusão.  Tomando o exemplo acima, o número de divórcios e desacertos entre casais de pátrias diferentes sempre é maior do que entre homens e mulheres do mesmo país.  Da mesma forma, a ilusão do carnaval antecede a desilusão do pileque.

Os sonhos, sejam de carnaval, de amor, de paz, de democracia, ou de desenvolvimento são possíveis mas também ilusórios.  O casamento da brasileira com o gringo acaba em família separada e as vezes lutas notórias para a guarda das crianças em países diferentes e a divisão de bens. 

A democracia existe na narrativa.  O presidente promete e diz que respeita a Constituição, mas quem o abona?  Algumas pessoas enfermas com o Covid buscam desesperadamente soluções, sem saber se tem so uma gripezinha ou se terao que lutar desesperados pela vida, entubados numa clínica particular ou hospital publico, sonhando com um tratamento eficiente.

Os sonhos são nossas narrativas, nossos contos, nossas estórias.  Quando apenas sonhados, eles permanecem em nosso inconsciente mas quando verbalizados, eles vêm para o consciente e se tornam reais, desemborcando na ilusão.  Assim, ficamos receosos de confessar o amor por medo, ou ficamos em casa em vez de sair para a participação e construção, já que antecipamos nossa desilusão e achando que o esforço não vai resultar em nada.

Sonhar é muito bom, desde que lembremos da ilusão como a contrapartida, nos preparando para lidar com o nosso dia a dia da dura realidade.  Falta amor, falta dinheiro, falta oportunidade, falta igualdade, falta democracia enfim as vezes parece que falta tudo menos a ilusão.

As eleições municipais talvez não tenham os candidatos de nossos sonhos mas ainda representam um exercício e uma prática construtiva real.  Votar é preciso.  Mas com certeza, grande parte das pessoas vai ficar ou já esta desiludida.

Paulo Guedes, Ministro da Economia, vive sonhando com um projeto “liberal” que implica na redução do escopo do Estado na economia.  Entretanto, não sai resultado.  Ao contrário, praticamente não ha mudanças ou se ha, não se sente efeito prático.  E tudo uma ilusão.  Embora o tal “mercado” (Av. Faria Lima) quer acreditar, até cair repentinamente na desilusão.

O Presidente, talvez com o marketing, virou mito mas está longe de realizar sua promessa de acabar com a corrupção e a violência.   Para governar ele está recorrendo ao modelo antigo de toma-la e da-cá com o Centrão e o apoio dos políticos da velha guarda.  Enquanto isso, as pessoas vivem com medo e as polícias matam com impunidade.  E o dinheiro continua circulando nas cuecas da classe política.

O Covid no Brasil está ceifando dezenas de milhares de vidas e as pessoas sonham com a imunidade ou vacina.  Ate agora nem um e nem outro.

Podemos concluir que sonhar faz parte de um processo de compreensão e interpretação.

Ter esperança é preciso e ter o sonho também.  O ícone da cultura musical, Tim Maia, nos ensinou que temos que ter motivo para viver e sonhar, e ter “um sonho todo azul, azul da cor do mar.”

E aí vai, mas prepare-se.

Who Owns, Runs and Rules? Power in Brazil

 “Quantas vezes me disse o Conde que era este o segredo das democracias constitucionais: eu que sou o governo, fraco mas hábil, dou aparentemente a soberania ao povo, que é forte e simples; mas como a falta de educação o mantém na imbecilidade, e o amolecimento da consciência o amolece na indiferença, eu faço-o exercer essa soberania em seu proveito e no meu proveito, ó compadre!” Eca de Queiroz em O Conde d’Abranhos.

Since 1500, when Cabral claimed Brazil for the Portuguese, the questions of ownership, administration and power have been evolving and always convoluted.  The native tribes, while suspicious and fearful of the smelly new arrivals, did not resist the invaders by claiming a legal right to the land, nor were they willing to cede control based on any form of purchase and/or concession.  In essence, the Portuguese pushed aside the Indians with arms and illness to gradually establish immense land holdings (sesmarias) given by the King to his acolytes.

So, although the Indigenous population occupied Brazil long before discovery, the notion of organized, authenticated and deeded ownership only came after 1500.  Brazil’s native population did not have a notion of private ownership of land nor did they seek to appropriate land and labor for mercantile purposes.  The Portuguese, however, had to develop a system of possession with the intent of rewarding the King and his household.  Initially based on feudal notions, the system gradually transformed to private holdings, mercantile concessions and then market exchanges.

From the colonial period, control, domination and ownership was held by a relatively small group that had ties and favor through family and patronage with the Portuguese crown.  Extractive activities such as Brazil wood (pau Brasil) could be managed at a distance but as the sugar cycle and the slave trade took over grandees came to rely increasingly on native born who still had ties to the metropolitan or imperial administration.  Central authority always is countered by centrifugal pulls and this was especially so given the continental size of Brazil.

Slavery, sugar production and the associated logistics of trade and commerce enhanced complexity and required new systems of ownership and legality that went beyond the constraints of personal loyalty and patronage.  With the Napoleonic Wars in Europe and the transfer of the Portuguese Empire to Brazil, there was further consolidation, with royal protection, of legal structures guaranteeing ownership, slave holding and mercantile extraction of product from the land.

Clearly, up to Independence (1822) and beyond, power resided with the landowners sanctioned by Dom Pedro I and subsequently Dom Pedro II.  Rio de Janeiro became the capital of the empire and also the seat for the imperial bureaucracy in charge of managing the affairs of state including revenue collection, defense and the promotion of public services including roads and ports for the transportation of initially sugar, subsequently gold, silver, precious stones and later on a variety of products in demand in Portugal and Europe more broadly.

At Independence, there were less than 5 million inhabitants in a land area much larger the United States at the same time.  In this vast and sparsely populated territory, Rio de Janeiro and Salvador were the main urban centers of note.  Even in Brazil’s first urban centers, the division of labor, economic differentiation and productivity was subsistence based.  These centers hosted with precarious comfort the emperor, some minor nobility, an administrative class and the clergy.  These grandees, in turn, consumed products imported from Europe and sustained themselves with the wealth of gold from Minas Gerais, wood and sugar.  Slaves produced the exports but had no income to sustain any consumption.  It is true that the Church and to a lesser extent the “nobility” required art and architecture so the heritage that remains is found in buildings dedicated to higher purposes next to the whipping posts (pelourinho) that managed to keep 1/3 or more of the African and Afro-Brazilian population in submission.

All in all, running, ruling and owning Brazil and its wealth was a much simpler proposition up to the end of the 19th century.  Emperor Dom Pedro II reigned effectively for nearly 60 years.  Only after almost every country had abolished slavery did Brazil do the same in 1888 and move to a Republican form of government in 1889 after a minor military insurrection.

An exotic backwater, a destination for recalcitrant slave owners from the US, a land of vast unexplored potential, and always an object of frustrated desires and endeavors, Brazil finally began to cultivate an image of an awakening giant in the beginning of the 20th century.

One hundred plus years ago, Brazilian modernity involved republican notions, constitutionalism, private property, democracy, universal suffrage and the market.  But overall these concepts remained interesting yet exotic as Brazil transitioned from a slave-based economy.  In the first Republic (1889-1930), regional elites ruled and the presidency alternated between Sao Paulo and Minas Gerais in the informal café com leite agreement.  New formal legal structures masked the continued dominance of a small land holding elite that began to absorb and accommodate urban and some industrial activities.  Getulio Vargas led the Revolution of 1930 and guided the creation of the Estado Novo dictatorship (1937-1945).  Vargas’ political genius was in his anticipation of social and economic needs of the emerging urban working class while giving operational autonomy to Brazil’s landed barons and colonels.  The top down concessions through the Italian fascist model of social and economic cooptation of unions and the use of the state apparatus to create enterprises and employment strongly tinge Brazil’s power structure and administration 90 years later.  Things changed but remained the same.

Since Brazil’s redemocratization in 1985, there has been a growing recognition of the need for change, but Owners of Power using the title of Raymundo Faoro’s classic book (Os Donos do Poder), steadfastly resist.  Today, Brazil is highly urbanized with more than 80% of the population in large cities and at the same time, land and ownership is more and more concentrated.  Farmers and ranchers today account for Brazil’s main exports of meats and grains.  Their lobby in Congress is one of the most powerful and resists environmental regulations or changes to land management and ownership.  The military led the political change in 1930 and grew stronger under Vargas during the Estado Novo and guaranteed their prominence by supporting Allies is World War II.  Today, the Armed Forces are isolated from any changes in the reform of the State and their generous pensions and benefits remain untouchable.  Although retired Army Captain Bolsonaro was elected as a civilian, his administration has provided more positions and resources to the military than even the dictatorship presided by Generals.  Important ministries are headed by active or retired military who are in charge of allocating voluminous public resources.   The bureaucracy including the state-owned enterprises and especially the judiciary are another elite reserve of power.  This group too has protected itself from change and, indeed, at the top levels continues to enhance its privileges.  Of all the groups, that emerged from Brazil’s colonial past, only the Church has perhaps lost power or maybe we should say that the material sway of moral organizations has become more “democratic”.  Today, Brazil’s evangelical Protestant churches are holding onto numerous tax benefits and even seeking, and probably achieving, forgiveness of past tax obligations.

So, addressing the question of who owns, runs and rules, we note that Brazil has grown tremendously in complexity but that those who have held power for long periods of time remain in charge and jealously guard their status and benefits.  However, Brazil aspires to democracy partially because complex social and economic structures need an institutionalized and legitimate system to contain and guide competing interests so that they do not destroy each other and bring down a system that allows for increasing production and wealth.  In the end, there is no one elite or center of power that has its way.  Over time, Brazil’s “owners” have been able to accommodate and manage ongoing crises without total breakdown.  There has been to date some sort of jeitinho to promise change without actually having to deliver on a substantial scale.  However, the emergence of new players and the different and ever increasingly obvious forms of inequality reflect the rigidity and protective nature of the entrenched.  Without change, pressure will build and eventually there will be minor or major ruptures.  Democracy without education and openness to mobility will lead to populism and even despotism.  If Brazil does not get the question of ownership, management, and leadership right, it will wind up as another case of frustrated development.

A Segunda Vinda do Messias

Screen Shot 2020-08-16 at 17.59.19

Muitas vezes criamos dificuldades para compreensão da política brasileira porque ficamos amarradas e comprometidas com uma ideia fixa.  Me parece que é isso que ocorre no Brasil com relação ao Presidente Jair Messias Bolsonaro.  A oposição ao Presidente recusa ver, fecha os olhos, e não entende, que apesar de mais de 100 mil óbitos na pandemia, apesar da recessão, apesar de toda a ineficácia administrativa e apesar da corrupção da família Bolsonaro, e apesar dos pesares, não ha outro candidato que vencerá o Presidente.  No momento, tudo indica uma forte possibilidade de sua segunda vinda.  Isso se explica pelo fato que a oposição não tem uma narrativa e nem um líder que possa enfrentar o Capitão e vencer.  Ex-Presidente Lula, se for elegível está velho e tem altíssimas taxas de rejeição.  Joao Doria, o governador de São Paulo, não tem apelo popular.  Flavio Dino, o governador de Maranhão, não consegue agregar forcas a sua volta.  Ciro Gomes foi candidato e perdeu para Bolsonaro e de Fernando Haddad.  Haddad, por sua vez, é visto apenas como “poste” do Lula e assim não tem densidade e perderia outra vez como perdeu em 2018.

Na falta de ideias, há um abuso no uso de termos como fascismo e genocídio na procura de um apelo emocional contra o presidente mas o mau uso dos vocábulos apenas acaba demonstrando a falta de ideias e projetos.   Este apelo acaba sendo partidário e sem ampla receptividade já que as pessoas não participam dos partidos e a acusação vaga não tem respaldo da população.   Bolsonaro vem de uma formação militar e encampa o discurso de autoridade e moralismo familiar.  Sua pose reflete melhor a experiência do dia a dia das pessoas e sua popularidade tem base num conservadorismo e autoritarismo existente não só entre seus acólitos mas dentro da sociedade.  O Presidente não tem o dom da palavra, usa grosseiras mas não é fascista e certamente não tem controle totalitário e pessoal como Mussolini tinha.  De fato, embora tem um pouco de discurso nacionalista, o Presidente nem chega a fazer parte Integralismo histórico, digamos, do Plinio Salgado.

Nazistas, Fascistas e genocidas tipo Hitler ou Mussolini tinham projetos e partidos e controle quase total do Estado para por em prática seus objetivos.  Todo o poder do Estado estava disponível para prender e massacrar os inimigos ou a parte da sociedade nacional indesejada.  A não ser as milícias localizadas e a longa tradição de arbitrariedade do aparato policial, obviamente não tem nada parecido no Brasil.  Bolsonaro não tem nem o poder dos generais durante o período militar.  Ao contrário da ditadura, ele não tem meios de caçar, prender e matar quem ele quer.  Enfim, Bolsonaro não tem o poder que gostaria de ter e as instituições, embora precárias, ainda freiam as tendências autoritárias do Presidente.

Assim as tentativas do impedimento do Presidente existem embora não prosperam.  Agora com sua aproximação ao Centrão, a distribuição do Coronavoucher e a consistência de sua mensagem de reativação da economia, a realidade de um impeachment torna cada vez mais improvável.  A popularidade do Presidente cresce na medida que ele retorna para a velha política e pelo fato que abraça casos que são do interesse dos Congressistas e os lobbies que os apoiam.  As bancadas da bala, da Bíblia, do boi, e do Centram, ou seja, os antigos apoiadores do Temer que também evitou o impeachment depois dos escândalos da mala e da JBS através da troca de benesses.

No Brasil e mundo a fora, a popularidade varia.  As subidas e descidas acontecem com uma certa rapidez e com a influência de todo tipo de fatores.  Bolsonaro agora está popularizando entre as pessoas, principalmente no eleitorado do Nordeste, ou seja, exatamente onde era o maior reduto do PT em 2018.  Parece que seu crescimento se deve as transferências de 600 reais mensais, a inauguração de obras, bem como pelo crescimento do conservadorismo evangélico.  Entretanto, paira a pergunta: O que vai acontecer quando acabam os recursos?  Paulo Guedes, o Ministro da Economia, disse que respeita o teto de gastos e que as medidas emergenciais não podem continuar.  Assim ou estoura o teto e virá uma enxurrada inflacionaria e a provável demissão do Guedes ou o Presidente volta a cair em aprovação que o dinheiro acabou.

A eleição americana também pode entrar no jogo.  Bolsonaro atrelou sua política externa a política americana.  Até agora, o retorno real para o Brasil tem sido parco.  Os EUA ainda põem tarifas nos produtos brasileiros como açúcar e bens manufaturados.  O apoio “prometido” para a entrada no grupo de nações desenvolvidas (OECD) ainda não materializou.  Os filhos do Bolsonaro e outros dos seus partidários apoiam Trump abertamente mas ele corre sério risco de ser derrotado pelo Biden.  Biden, por sua vez, cobrara do Brasil seus compromissos com no Acordo de Paris (clima) e portanto mais consistência na preservação da floresta amazônica.  Se uma eventual pressão americana poderá ter um impacto negativo para a reeleição de Bolsonaro é difícil prever.   A popularidade do Brasil no estrangeiro não entra na cabeça do eleitor na hora de votar.  Quando Jimmy Carter veio a substituir os Republicanos em 1976, ele começou uma política de direitos humanos que o Presidente Geisel viu como uma interferência indevida e tomou ojeriza ao Presidente Americano.  Os norte-americanos podem sempre ser vistos como intervencionistas e interesseiros.

Se a economia não mostrar sinais de recuperação e se a inflação voltar com algo com um novo Plano Nacional de Desenvolvimento (PND) e se a miséria continuar aumentando como agora, pode ser que o Presidente tenha dificuldades.  Mas para ganhar, a oposição precisa de novas ideias e ações.  Em 2002, Presidente Lula encontrou durante um certo período a fórmula magica de sossegar o empresariado nacional e multinacional com o afastamento de ideias anticapitalistas e intervencionistas.  Lula na época tinha o charme de “paz e amor” além de seu carisma.  Ele também continuou e aumentou os programas de transferência de renda além de prometer (sem realizar) melhorias em educação e infraestrutura básica.  A queda dos preços das commodities, a corrupção e bitola ideológica estreita promovido pelo Jose Dirceu e companheiros jogo tudo água abaixo com o Mensalão e depois todos os demais escândalos que correram fora de controle.  A fórmula existe mas agora o problema é arrancar a receita das mãos do Bolsonaro e achar quem tem a substância para substitui-lo renovando a crença na possibilidade de um Brasil inteligente, convivial e aberto.

Se não encontrar, o caminho está aberto para a segunda vinda do Jair Messias e com isso, a continuidade do negacionismo na saúde e ciência, do moralismo fajuto, do aumento de ataques a minorias raciais e sexuais, da rejeição das artes, do comodismo com as milícias, da aceitação disfarçada da destruição ambiental, além da continuidade de ataques a imprensa e as instituições que são fundamentais para a construção e manutenção da democracia.


Brazil: Three Faces, Three Periods, Gil, Bolsonaro and Dona Jô

In Latin America, there is always a crisis, a crossroad and an immediate need for important decision. Frankly, it is quite exhausting and, see for example my recent blog “Canseira” for a brief reflection on how tired and tried people feel in the face a multitude of difficulties. At the same time, you get used to it. In Brazil, people accept, are resigned and fatalistic. If there is nothing you can do, then let it be. My friend, Dona Maria of Fidalgo, used to say of her ailing husband, Miguel, “só a morte cura” (only death cures) and he would nod in acceptance.

Like fatalism, longing or in Portuguese “saudade” intertwines. We accept all sorts of problems, all types of indignities, and the whole range of travails that characterize life in a poor and unequal society, but at the same time long for and desire both a romanticized past and the promise of a better future. Hope is the last to pass. The slogan is never give up.

The renowned musician, Gilberto Gil, just turned 78. He has had health issues but continues to be immensely productive and active even in the pandemic. His birthday show on YouTube has been viewed over 800 thousand times in just two weeks. Faith and hope for the present and the future were the themes of his party. Here is a link to “Andar com Fe” (Walking in Faith)

gilberto-gil-by-daryan-dornellesPhoto: from Internet

Gil grew up in Bahia in the post WWII period and inherited and incorporated musicality and African roots. While northeastern Brazil has always been poor, Salvador has been something of an entity unto itself with the literature typified by Jorge Amado and the rich musical veins in popular culture. When the military ousted Joao Goulart in 1964, Gil was beginning his musical career and making friends with Caetano Veloso, Maria Bethania, Jorge Ben and others who would form the Tropicalia movement. Counterculture, even if only in musicality, was out of synch with the generals and both Gil and Caetano wound up in exile, but their musical careers blossomed. Gil’s online birthday party involved many of his artistic friends, including Stevie Wonder, and brought back memories of a friendlier, greener, more cordial, happy and engaging Brazil. Gil showed what most people respect, love and enjoy about multi-colored and multicultural country. There was a sway, a flow, smoothness and contentment without being disengaged from the current political and economic environment.

Gil’s virtual birthday party shows him firm in his creativeness, his democratic and social openness and keeps him in the vanguard of Brazil’s progressive leanings. In the country of the churrascaria, Gil is a vegetarian and a founder of the Green Party.

Jair Bolsonaro is some 13 years younger than Gilberto Gil and was born in Glicerio* in Sao Paulo State. The family moved to different small towns while his parents were raising 5 children and the elder Bolsonaro sought to make his living as an unlicensed dentist and small-town retailer. With high inflation and political instability, a military career offered a secure option and order amidst turmoil and difficulties. As a teenager, Jair witnessed and supported with his family the military takeover. After preparatory training, Bolsonaro gained entry, in 1974, to Brazil’ Agulhas Negras Military Academy. This was during the Medici most dictatorial Presidency and the most repressive years of the military regime. He thrived on the physical aspects, became a paratrooper and even today brags of his athletic prowess. For a young man from a small town and of limited means, graduating from the academy as an aspiring military officer must have felt exhilarating especially for one who wanted to combat the army’s enemies which included leftists, communists, hippies and all sorts of counterculture types.

I am not sure but I think it is safe to say that young Jair’s musical tastes did not include the Bahianos. Instead he prefers Brazilian country (sertaneja) and barbecue with beer.

As is well known, Jair Bolsonaro’s years in the military were not without controversy. He was supported by the most anticommunist members of the security apparatus but rejected by President General Ernesto Geisel (1974-1979) during Brazil’s regime hardline relaxing  . After being of accused of planning bombings in protest of low military pay pensions, Geisel called Bolsonaro a “bad soldier” but ultimately was exonerated by a military court which called into question the validity of evidence presented.

Bolsonaro built his political career, which was totally lackluster for 27 years, based on bombastic declarations in support of radical right-wing military issues and by defending the dictatorship, torture and repression. In spite of Brazil’s democratic aspirations, Bolsonaro struck a chord in his run against the PT (labor party) and all of the corruption that came to be associated with President Lula and President Dilma

25/04/2019 Solenidade de Assinatura do Decreto que revoga o Hor

(Brasília – DF, 25/04/2019) Presidente da República Jair Bolsonaro chega ao local da solenidade. Foto: Marcos Corrêa/PR

Josefa F. Negromonte is an artist, who paints in oil and acrylic. She was born in 1928, is in her early 90’s, doing well and I know a lot about her as I married her daughter.

She is from Recife in Brazil’s Northeast but has lived in Belo Horizonte since 1949. She and  her late husband, Ezequias Negromonte, got married very young and had 7 children.   He became a well-known attorney, but passed away in the mid-80’s when he was still in his 50’s. Like most ladies of her generation, she finished middle school but had no further formal instruction. And as in most families, she followed her husband’s lead in the urns.   But after his death, which came as Brazil was striving for direct elections and a new Constitution, her political and social considerations awoke in support of the working party, mostly because of Luis Inacio Lula da Silva, the then presidential candidate. Lula was a simple guy with very little education, but a keen intelligence and unique and unparalleled communication skills. She also liked the fact that he also was a migrant from Pernambuco and both had made their way to southeast Brazil at mid-century.

Her parents were not particularly poor but had a large family of 17 children, she one of the 3 youngest. Her husband came from a very poor but religious family.  Ezequias’ mother devoted most of her time to itinerant street preaching and not the family.. So, both of them grew up without much guidance. But this did not stop them from achieving a better life through education and hard work. Thus Dona Jo held the fort at home, ensuring  that all their children received and education and achieved professional careers.

Over time, Dona Jo went from authoritarian control of the daughters to an opening up and greater recognition of changing mores and norms. So, while she initially supported the law and order of the military governments, and practiced dictatorial control at home, she too had to loosen and soon came to chafe under the arbitrary repression, censorship and violence of the soldiers in power. Up to the last presidential election, she had cast votes for Giulio, Juscelino, Janio, Collor, Fernando Henrique, Lula, Dilma and Bolsonaro. Her votes were tied to aspirations, family and geographic influences. Her desires reflect those of a majority of Brazilians in that they have hope, want to be rid of corruption, and want to have a say in the country’s destiny. In voting for Bolsonaro in 2018, she wanted change and even though she liked Lula and his policies, she could no longer justify a vote for the PT, given her perception of robbery amidst decline.

She has always been suspicious and unwilling to trust politicians but at the same time values the electoral process. Today, she is disappointed in Bolsonaro as he has failed on many fronts, not only in the pandemic and the economy but also in controlling health costs and threatening social security, which impact her directly. Her private health plan gets more expensive every year, her pension does not increase and she could not survive without some support from the family, even though she and her husband ensconced themselves firmly in Brazil’s middle class. Today, her lifestyle is quite modest as  she enters her 10th decade, fortunate to have family support.


img_9520Photo by author

So, we have three Brazilian of different generations and different backgrounds and periods. Dona Jo is perhaps the most experienced as she has lived the longest. In spite of everything, her political skepticism is tempered by a love for Brazil and a belief in better days. Would she vote for Bolsonaro again? Probably not. Gilberto Gil has the history of musicality and political participation. He is known, loved and respected across a broad spectrum of Brazilian society. Bolsonaro, in turn, is now in that hard place. He won his election with 57 million votes but today, even as his supporters believe he is valiantly trying, he is surrounded by problems, many of his own creation.  Brazil’s Covid pandemic advances and the leaderless Ministry of Health has proven ineffective in taking control. Likewise, the economy has suffered an unprecedented set back and will shrink between 6 and 10 percent this year. All of this on top of the anemic growth from of the last years following the deep recession of 2015 and 2016 which contributed to President Dilma’s impeachment. Lack of economic growth means greater poverty and increased inequality. Consequently, Bolsonaro witnesses his decline in popularity and there is a broadening sense of failure.

Amidst the pessimism, there is resistance. Gilberto Gil consciously chose faith as the theme of his birthday presentation. While Dona Jo has witnessed and lived through all of the regimes since the Estado Novo, she continues to have hope that Brazil will improve as her life improved from her poor beginnings in the Northeast. Although Bolsonaro maintains his angry and vindictive persona, he too, needs to find the love of his evangelical faith in God and Brazil to get his government going or certainly lose any chance at reelection in 2022.

What can we conclude?  My mother-in-law has the wisdom of the years.  She lives and hopes but her expectations are tempered with experience.  Gil has the joy and tranquility unique to Bahia, the knowledge that one acquires through poetry and rhythm.  Bolsonaro and his followers have ire but need to learn and are beginning to recognize that the energy from anger burns out quickly and leaves much bitterness.  The radicals in the government will have to conclude that while there is much to lament, Brazil cannot prosper with exclusion, isolation, and a false sense of righteousness.

*Curiously, the President’s official government site lists his birthplace as Campinas, SP.


Cansado-del-camino-o-cansado-en-el-caminoFonte foto:


Estamos cansados, chateados, e frustrados.  Afinal já estamos com 120 dias de “lockdown” e sem muita perspectiva de melhoria.  O racismo continua, “black lives” parecem não importar com o perigo do Covid19 já que a perseguição racial mata mais do que o vírus.  As mortes pelos xerifes continuam, assim como a violação e saque de pequenos e grandes negócios praticados por oportunistas e rebeldes.  Covid19 está nas ruas com mais de 100 mil mortos nos EUA e mais de 40 mil no Brasil.  Enfrentando a polícia, a segurança pública e o vírus, as pessoas protestam enquanto se expõem a um risco duplo.  O Presidente Trump ameaça com as forças armadas em Washington mas felizmente não encontrou o respaldo que ele desejava entre os militares.  No Brasil, o Senhor Presidente Jair Bolsonaro continua tentando proteger seu mandato através de nomeações de soldados e com ameaças não tão veladas de intervenção militar caso a oposição “estique a corda”.

A tormenta “perfeita” continua, e como sempre quando chove muito, ficamos presos dentro de casa deprimidos.  A vontade de sair e encontrar os amigos e parentes é grande, mas como e onde?  Atualmente, Brasil e os EUA estão traçando caminhos paralelos.  Há receio por parte de pessoas do partido democrata que caso o Biden ganhe no voto, o Trump invente uma desculpa do tipo “os votos foram roubados”, e não sairá da Casa Branca.  Da mesma forma, muitas pessoas de esquerda no Brasil identificam o ataque da direita às instituições e já temem o golpe do Presidente com uma intervenção militar, o fechamento do Congresso, e a saída dos juízes do Supremo Tribunal Federal para o xilindró.

No dia dos namorados, por exemplo, um grupo de apoiadores do Presidente lançou bombas de efeito e foguetes de festa ou de jogo de futebol na direção do Supremo. Eventualmente foram retirados de perto e pelo menos uma pessoa da liderança foi presa.  Todo fim de semana em Brasília e outros locais há manifestações pedindo o afastamento dos Presidentes da Câmara e do Senado.  Bolsonaristas também estão “invadindo” alguns hospitais públicos supostamente para mostrar que Covid19 não é problema para o sistema de saúde.

É certo que existem ameaças e o desejo de fechamento do sistema político por certos setores da sociedade, e talvez por parte de certos militares, em sua maioria aposentados, que fazem parte do governo Bolsonaro.   Trump pelo seu lado, tem vontade de dispensar com as formalidades e usar a força como exemplificou em Lafayette Park.

Desvalorizar a democracia e participação política acaba desmerecendo o sistema.  Da mesma forma, populismo de um líder messiânico e a criação de mensagens sem embasamento (fake news) também emperram as engrenagens.  A corrupção também contribui para o desencanto e o descrédito da máquina púiblica.  A tentativa do Ministério de Saúde de não repassar os dados dos óbitos e dos novos casos de Corona exemplifica a tendência de pensamento autoritário e militar, que acabou não funcionando.  Da mesma forma, Trump conseguiu impor sua versão de “lei e ordem” com a anuência do Partido Republicano.

Lembremos que a tomada de poder pelos militares em 1964 também foi feita em nome da democracia e em defesa das instituições.  Sempre nos golpes ou nas rupturas institucionais os mandantes procuram criar uma narrativa aceitável pela população.  A dificuldade, talvez a impossibilidade, de um autogolpe do Presidente Bolsonaro hoje reside em várias falta e falhas:

  1. Falta apoio para uma nova aventura visando o fechamento do sistema democrático. O Presidente procura alavancar seus 57 milhões de votos mas ele não consegue nem o apoio militar, nem a legitimação econômica, e nem o respaldo político.  Enfim prevalece uma Constituição acima da pessoa do Presidente.  Ele, embora “autêntico” e grosseiro acaba se curvando quando não consegue impor suas ideias.  Em sua fala, ele ameaça, mas seus atos publicados no Diário Oficial reforçam suas limitações e mostram como ele é muito mais fraco do que pode parecer.
  2. Falta um projeto e um plano para realização. Existe sem dúvida no Brasil, canseira de corrupção, apoio aos valores tradicionais da família e religião, e a vontade de reduzir a criminalidade e violência.  Enfim, o deputado do baixo clero foi eleito com esse discurso.  Por isso, o apoio de Sergio Moro e sua alçada ao posto de Ministro da Justiça foram importantes na eleição.  Entretanto, a falta de combate à corrupção, o defenestramento do Moro, e a aproximação do governo ao Centrão revelam que não havia substância suficiente para se cumprir as promessas.  Enfim, o Presidente encontra-se politicamente isolado.
  3. Falta a economia. A reforma da previdência, as mexidas fiscais observando o teto de gastos, as prometidas reformas no sistema tributário e a ideia de menos governo, menos burocracia e menos Brasília para ter mais Brasil também ficaram no meio do caminho.  Havia dois super-Ministros e hoje só sobra o Guedes.  Ele, por sua vez, acaba de perder seu Secretario do Tesouro, Mansueto Almeida, e é certo que os dias do Guedes como suprassumo já ficaram para traz.  Ele não tem a competência e nem a vontade de negociar com os políticos tradicionais do Centrão, inviabilizando seu plano de arrumação o qual já foi atropelado pelo alastramento do vírus.
  4. Além das medidas paliativas, o governo precisa alavancar os investimentos. Há grandes necessidades de infraestrutura, em especial saneamento básico, havendo também obra paradas de todo tipo. Este e o resultado do desarranjo político que incapacita e dificulta arregimentar os recursos econômicos para tocar obras e efetivar investimentos.  O governo não tem demonstrado nenhuma competência em equacionar a tradicional briga entre o “desenvolvimento” e a “economia.” Vide a recente disputa ministerial entre Guedes e os criadores do novo “Plano de Desenvolvimento”.

Embora a administração demonstre fraqueza, não há por outro lado um projeto de poder alternativo.  Não há novas lideranças e na falta de novas ideias e novas composições, gerando canseira e frustração, que vão continuar.  A alternativa do momento deve ser se resguardar do vírus, depois a ativação gradativa do comercio, aliada às medidas paliativas.  Enquanto isso, foca-se nas eleições municipais, no papel das ideias, e no lento desenvolvimento de novas lideranças.  O Brasil é um país imenso com uma economia razoavelmente sofisticada.  No passado, os militares tentaram sem sucesso sua gestão política e econômica mas rapidamente perderam legitimidade.  Tiveram que editar um AI-5 e impor a repressão que não funcionou na década de 70 e tem muito menos condições de funcionar 50 anos depois.

Com certeza estamos frustrados, e reclamamos do sistema democrático e todos os seus defeitos, mas quando ele desaparece e instala-se a arbitrariedade, todos irão sentir falta de algo que era bom mas que não sabiam.

La Jolla Energy Conference: Pandemic, Reality and Hubris?



The 29th La Jolla Energy Conference ended last week.  Given the current COVID19 emergency, the event faced unprecedented challenges.  Up until March, the plan was for the annual 3-day meeting to take place in La Jolla with energy executives, analysts, academics and US/Latin American officials and experts in the hundreds gathering and sharing the beauty of Pacific shores and sunsets.  Obviously, everything changed quickly and the Institute of the Americas, through its Vice President for Energy Programs, Jeremy Martin and staff, made a quick pivot taking the conference not only tieless but totally remote and online.  The Americas, Europe and the Pacific Rim were all connected in an almost flawless virtual setting.  The Conference moved from a full 3-day format to a Monday through Friday with sessions occurring typically from 8:00 am Pacific time to early afternoon.  Handshakes, hugs, cocktails and dining with views will have to wait until 2021 or?

Here is the link to the full program:

Over the years, this conference has been unique in that it is set in one of the most attractive sites in the US and, most importantly, because it focuses on the evolution and potential of the energy sector in Latin America.  Over the years, the spotlight has been on oil and gas but with a notable shift to renewables.  With the worldwide public health crisis and fall in energy consumption, the conference began by addressing two questions: “Will the changes from the pandemic be permanent or temporary?” and “Is oil dead?”.

In reflecting on the conference answers to these questions, I won’t fully review the whole five days but instead focus on specific regions or countries, specific promises and challenges in the sectors and finally the larger political and economic panorama.

In pre pandemic times, political leaders and the markets expected, if not smooth sailing due to the US versus China trade conflict, at least fairly decent growth and a year of recovery especially in Latin America.  COVID19 reversed optimistic forecasts and brought the energy sector and the larger scale economy to a quick full stop with a total reversal in gains in investment, employment and income.

By Country

In Latin America, all the different countries have gone into emergency mode.  However, those countries such as Venezuela, Ecuador and Argentina which were already having substantial problems are in much worse shape.  Argentina has missed it bond payment and is negotiating a new bail out with the IMF.  Without resources, it cannot develop the Vaca Muerta fields and, as the joke goes, make it Vaca Viva.  Ecuador, with dollarization, finds its treasury empty as there is no demand for its oil.  At the same time, indigenous communities and the poor have pressured the government due to oil spills, environmental disasters and the need for wealth redistribution.   Venezuela’s tragic saga continues with the impasse between Maduro and Guaido while neither side shows any capability in restoring or building institutions and business.  As a result, the massive reserves sit and the Venezuelan oil company (PDVSA) may well be forced out of business within a year or two.

Brazil, on the other hand, was looking to a potentially good year for Petrobras and a year of less anemic growth in the national economy.  Like all oil producing companies, Petrobras (PBR) has been forced to idle much of its production but was still able to export a record amount of oil in April.  The immediate future does not look promising, but PBR has resources and lower levels of international debt.  Its expansion programs will be put on hold, but long term the company will survive and could even thrive with its technical competence and past investments in the pre-salt offshore fields.

Mexico, in turn, is a rather unique case in the international oil business.  PEMEX, the national oil champion, continues to produce in spite of low demand and even with the cost of production outstripping the sale price of a barrel of oil.  President Andres Lopez Amador (AMLO) is doubling down on his bets and his attempt to revive national production.  The conference participants and the market seem skeptical, so much so, that an overwhelming number of participants see PEMEX bankruptcy in the short term.  AMLO seems intent on denying reality and putting a nationalist face on things at least until Mexico’s midterm elections in 2021 where he hopes to be able further legitimize his presidential mandate, halfway through his term.  If AMLO can maintain control of the Mexican Congress, it will be interesting to see if the economic realities of production costs will bend ideological commitment.

Guyana, one of South America’s smallest countries with less than 1 million people, now attracts major interest because its offshore oil reserves are now calculated at over 8 billion barrels.  Exxon Mobil is the major player but with great wealth comes great greed and the country is currently in the throes of a political and presidential succession crisis.  Institutional weakness and corruption threaten the country’s attempt to achieve substantial wealth and economic growth.


Before COVID19 and over the past decade, the talk has been about energy transition, wind, solar and other alternative source in accord with the Paris agreement to reduce carbon emissions.  The dilemma is that the world infrastructure and energy costs all favor fossil fuel.  With the pandemic, the oil sector has become increasingly cost competitive not only because of diminished demand but also due to increase in supply with fracking and new discoveries. With renewables, there is a dearth of distribution infrastructure and the high cost of financing.  Petrobras for example continues to flare off gas from its offshore wells.  PEMEX has doubled its flaring to over 500 million cubic feet per day and this waste was described as an “atrocity”.  In the case of Mexico, panelists agreed that a pragmatic approach (meaning market rational) cannot be an option due to the President’s ideological commitment to making PEMEX great again by using it in promotion of AMLO’s Morena philosophy.  Given the prospective worsening of the fiscal crisis, the question arises:  Can the mayor of CDMX (Mexico City), opposition governors, politicians, and businesspeople unite in the promotion of a different energy policy?

Political instability and shifting rules of the game add to the technical uncertainties inherent in oil exploration and production to make investing in Latin America fraught with risks.   High risk, in turn, makes financing more costly even in a low interest environment.

The Political Economy of Energy in Latin America

The La Jolla Energy Conference completed its 29th annual meeting and there is something of value in longevity.  Through good times and bad, there is still reason to meet and attempt to understand and interact with the different players in an ever-changing market.  It is amazing to remember that in the 90’s, the discussions often centered around “peak oil”, OPEC control and loss of oil from the Middle East, especially Iraq and Iran.  Today, in Latin America there are recent discoveries, the possible success of fracking, and a concern about being able to extract a resource while it is still valuable.  Everyone hopes that the COVID19 pandemic will run its course over the next year and that there will be a “new normal”.  For the Western Hemisphere, this means trying to use hydrocarbon resources in a world that is addressing climate change and environmental issues through renewables.  At the conference, there was serious pessimism about the future of national oil companies (NOCs), especially PEMEX, PDVSA, and YPF.  In addition, there was uncertainty about Ecuador, Guyana and PBR in Brazil.  The world public health crisis certainly put a spotlight on the political economy of the sector.  The hydrocarbon reserves are physically available in known and abundant quantities.  The demand crisis threatens values and makes extraction unprofitable in many cases and certainly places question marks around the viability of the state-owned models.  The political realities of the day and the market pressures the NOCs as they cannot operate profitably due to the political intervention of the national governments.  YFP, PEMEX, and PDVSA will continue to fail as long as the politicians attempt to use these entities as cash cows and nationalist political support mechanisms.  Even Brazil’s Petrobras is being forced to change its model for pre-salt exploration and production as last year’s auctions failed to attract international interest.  If this pressure was obvious before the pandemic, it is even more present now.  If production costs are higher than the market will accept and if profit is not readily apparent, the international oil companies will prefer to leave the oil and gas in the ground until they are able to develop a new model and negotiate the terms of presence and “partnership” in Latin American countries.

Back in the last century in the late seventies, there were long lines for gas, high interest rates and something called “dependency theory” as the vogue for explaining authoritarian governments and the role of the US and multinational corporations.  Of course, the shift has been to democracy, regular elections, the opening of markets and the globalization of trade.  However, a populist president in the USA and imitators such as Jair Bolsonaro in Brazil or AMLO, on the left, in Mexico once again show the limits.  With the prospect of world depression and the looming bankruptcies of many companies including NOCs, the Latin American countries and their business elites are once again dependent, and perhaps more than ever on Washington, but not only DC, but also China.  The world’s second largest and fastest growing economy has replaced or is replacing the USA and other western countries as the leading destiny for oil and is the main new source for foreign direct investment (FDI).  China is looking long term at investments in energy distribution, alternative energy, and lithium for the electric car industry and for energy storage.

Going back to the opening questions: Oil is not dead.  Hydrocarbon have a long future especially at low and moderate prices say in the 35 to 40 dollars per barrel range.  The world needs the “lights on” and because fossil fuels they are cheap and available, they will slow alternatives for a period.  However, it remains to be seen how much Latin America can take advantage of this window.  Brazil, for example, lost time in the past two decades due to its back and forth policies on the development of its offshore oil.  Now it lacks funding to move ahead and it is questionable as to what accommodations have to be made to entice China or the western international oil companies to actually enter and produce.  Other Latin American countries are behind Brazil both in diversity of resources for the energy matrix as well as in resources for investment.  So, the future appears disheartening.

Amazingly though, the conference speakers were all relatively upbeat given the gravity of the situation.  There was no firm consensus on if changes would be temporary or permanent, but there was the sense that the changes and challenges could be met.  I would not call it hubris but then again the industry does not have a reputation for humility.

The Conference will hopefully be back live and in person next year in La Jolla and there will another opportunity to evaluate the changes post pandemic and see what the new normal might look like.

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La Jolla Conference speaker and lithium expert, Emily Hersh, illustrates how to go “tieless”.









Tristes Tropiques or 10 Reasons Why People Love Jair Bolsonaro


The past week has been eventful in Brazil to say the least.  Justice Minister and Lava Jato mega-star Sergio Moro resigned.  His resignation followed the ousting Health Minister Mandetta as the President has pushed to deny the health consequences of the Corona virus pandemic and senses that he can only lose more popularity if the economy remains shut down with social distancing practices.  The number of Covid19 cases continues to rise (over 50000 confirmed cases with more than 4500 deaths by April 27) and already major capitals such as Manaus, Fortaleza, Rio de Janeiro and Sao Paulo are running out of hospital beds, equipment and personnel trained to adequately treat victims.  The economy has grounded to a halt and Brazil, in spite of extraordinary spending measures, and will shrink at least 5% this year with no quick recovery or remedy in sight.  Moreover, Argentina is now threatening to drop out of the South American Free Trade Area known as Mercosur.

The impact of the deadly pandemic is obvious not only in the hospitals and cemeteries but also on how people are managing their individual activities to guarantee survival.  It is a time for political and economic leadership and President Bolsonaro occupies Brazil’s center stage.  His rating in the polls have dropped by over 35% of the population supports him.  In thinking about this, I believe we can look at the points that resonate with his followers.

First, Bolsonaro appeals to Brazil’s religiosity.  Brazilians are believers and ultimately they oppose those who do not have core beliefs in an Almighty God.  Bolsonaro’s theme is God above everything else and he confirms this almost daily.  He likes to repeat the cliché that “God is a Brazilian.”

Second, Bolsonaro appeals to patriotism also present in his slogan: Brazil above everyone.  This appeal to the nation is potent as it unites people against anything seen as a common enemy.  Thus, Bolsonaro and Ministers such Ernesto Araujo wave the flag against communists and their leftist supporters who have a foreign ideology detrimental to the Brazilian way.

Third, Bolsonaro is an advocate for Brazilian traditions.  He goes to Church, he was baptized in the Jordan River and supports Christians, both Catholic and evangelical.  He is against abortion and anything non-traditional.

Fourth, Bolsonaro enlisted in the Brazilian Army, trained as a paratrooper and although his highest rank was Captain, he was an ardent supporter of the military regime, as were the majority of Brazilians in the sixties and seventies.

Fifth, as a military man, Bolsonaro believes in authority and claims legitimate authority through his election with over 57 million votes.  He has taken the reins of government to reestablish everything that the previous leftist administrations had undermined.

Sixth, aside from having legitimate authority conferred by the ballot box, Bolsonaro is also authentic.  He credits God with saving him from death at the hand of a would-be assassin, he wades into crowds and to take pictures and shake hands unconcerned about contamination from some little virus that might cause, in his words, a slight cold.

Seventh, Bolsonaro crusades against the corrupt.  He not only rejoices with Lula’s condemnation and prison term and attacks the malfeasance of past administrations going all the way back to 1985 for their stuffing of their pockets, taking advantage of the state apparatus, and draining away Brazil’s resources in the name of a socialist project that was nothing more than a cover for stealing from the Treasury and the people.

Eighth, Bolsonaro is manly.  For years, he has advocated for the strong hand of the patriarch.  He would cast out any son who might show signs of being effeminate and believes that anything LBGT is not an individual lifestyle choice but rather a communist conspiracy to break down family and religious values.  His symbolic use of his hands as pistols shows that Brazilians (especially men) have the power to protect their women, their families, and their property from the onslaught of criminals and the left who have in the past worked in conjunction.  Loosening restrictions on handguns and their use is another of his trademarks.

Ninth, Bolsonaro sees his family as a model for Brazil and something to be not only protected but promoted.  Thus, shows of favoritism are only natural for him.  It makes sense for his youngest son to work as his assistant in Brasilia controlling his social media and creating an aura of natural, yet legitimate, dominance.  It is completely normal to want another son to be his ambassador to Washington.  As Bolsonaro states, he is the Constitution and thus has the authority to do what is perfect in benefit of his office and his family and by extension the nation.

Tenth, aside from politics and being raised (by the hand of God) to Presidency, Bolsonaro is a man of the people.  He dresses in popular style going up the ramps of the Palacio in his flip-flops and shirt of the National team.  He enjoys Coca-Cola with his rice and beans.  Every weekend there is a Brazilian churrasco with the sons, their families.  The TV is turned on to the game and everyone has a beer or perhaps a caipirinha in hand. 

While some now call for the impeachment of Bolsonaro, it seems smart to consider if this is actually a real option in the current context.  The President has been rude, bombastic, erratic in behavior and has many defects, but he also reflects the culture where he is rooted and still appreciated by a significant parcel of the population.

Here is a link to a Data Folha survey confirming Bolsonaro’s levels of support: