Bloomberg Businessweek - USA (2020-06-29)

(Antfer) #1
“It’s like we’re saying, ‘Let’s go out and
see just how bad the virus can get’ ”

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BloombergBusinessweek June 29, 2020

mildCovid-19cases.(Initswrittenresponse,theministrysaid
thatit’sfollowing“bioethicalprinciples”bymakingthemavail-
ableandthatBrazilianstreatedwiththedrugshavehadgood
results.)TowardtheendofMay,Bolsonarosharedsomegood
news:TheU.S.wouldbesending2 milliondoses.

TheeveofBrazil’sValentine’sDay,inmid-June,isoneof
thebusiernightsoftheyearattheVillaRomapizzeria,inSão
Paulo’supscaleJardinsdistrict.In 2019 tableswerebooked
solida monthinadvance.ButthisyearownerGabrielPinheiro
wasstandingalonewearinga blackfacemaskbehindthe
woodenbar,greetingdeliverymenwhocameoneata time
andventurednomorethan 10 stepsintotherestaurant.He’d
putouta bottleofsanitizer,nexttoa littlesigninstructing
themtocleantheirbagsbeforeputtingordersinside.Thetwo-
storywindowattheback,normallylittorevealthelushplant
lifebeyond,wasdark,whilethesecondfloorwasfilledwith
stacksofpizzaboxesandnew,simplifiedmenusthatareeas-
iertocleanthanthethickbookletstheyreplaced.Runninga
restaurantatthistimeofyear“isusuallysucha goodfeeling,”
Pinheirosaid.“Nowit’sdepressing.”
VillaRomahasbeenclosedtodine-incustomerssince
mid-March,whenSãoPauloGovernorJoãoDoriaJr.defied
Bolsonarotoimposewhatbecamea morethantwo-month
lockdown,thoughitwasonlylooselyenforced.Delivery
business,announcedbycomputerbeepsthatprompted
Pinheiroandhismanager,Carolina,toshoutordersintothe
kitchen,hashelpedtherestaurantstayafloat,if barely.Sales
haveplungedtoabout20%ofthepre-shutdownlevel,andof
30 employeesonly 10 arestillatwork.Desperatetocutcosts,
Pinheirorenegotiatedhisrent,askedsuppliersformoretime
tosettlebills,andtookontaskslikebuyinggoodsandhan-
dlingpayrollhimself.“We’reaboutbreakingeven,butit’svery
tough,”hesaid.“Moreandmorerestaurantsareclosing,and
thestateis notdoinganything.”
Pinheirois relativelylucky.Nationally,restaurantsandbars
hadfiredmorethan1.2millionworkersbyearlyJune,accord-
ingtoindustryassociationAbrasel.Theorganization’spres-
identinSãoPaulo,PercivalMaricato,saysthatwhileabout
80%ofownerstriedtogetfinancingtotidethemover,thevast
majoritywereunsuccessful.Banksaresupposedtobeprovid-
ingplentyofcash—Bolsonaro’sgovernment recently slashed
reserve requirements to give them more room to lend—but
bureaucracy, demands for collateral, and high rates have pre-
vented companies from getting it. Many restaurateurs have
simply run out of money.
Unlike in the U.S. and Europe, the Brazilian government
hasn’t been able to provide much direct help to companies
or individuals. Public finances were in severe trouble even

beforethepandemic,theresultofdecadesofoverspending
by politicians of all ideological stripes and the lingering effects
of a severe recession in 2015 and 2016. The number of public
employees has more than doubled in the past three decades.
Some are paid almost twice as much as equivalent staff in
the private sector and receive outsize retirement packages,
though Bolsonaro succeeded in passing a controversial pen-
sion reform last year. That kind of spending doesn’t leave
much for essential needs such as health care.
The centerpiece of Bolsonaro’s economic response is a
600-real monthly stipend for Brazil’s huge number of infor-
malworkers,accountingforthebulkoftheroughly 400 bil-
lionreaisspentonemergencysupportsofar.(Thegovernment
hasalsousedaninsurancefundtopayfurloughedemployees
andprovidedemergencyloanstostates.)Thestipend, recently
extended to run for five months, drew praise—but at a little
more than half the minimum wage it’s not enough for many cit-
izens to get by on, especially in big cities. Disbursements have
also been delayed by problems including crashing computer
systems and a shortage of bills for cash payouts.
Bolsonaro has argued in speeches and on social media
that, with millions of Brazilians living hand to mouth, a pro-
longed recession will be deadlier than the virus—and the only
solutionistoswiftlyrestarttheeconomy.That’snotreally
inhispower,buthispronouncementsstillhavea significant
effectonpeople’s willingness to endure, and comply with,
ongoing restrictions. “You have about 30% of the people who
still support him and are influenced by his decisions,” says
Doria, the São Paulo governor. Once allies, he and Bolsonaro
are now at odds, in part because of the president’s criticism
of his decision to lock down the state, which has more than
45 million people. “If he doesn’t wear a mask, why should
they?” Doria asks. “His insistence on opening the economy
is another layer of pressure.”
São Paulo began lifting its restrictions on June 1, gradu-
ally allowing retailers and other businesses to reopen, though
restaurants and parks are still off-limits. Health experts are con-
cerned that, even in the first place in Brazil to experience a
Covid-19 outbreak, it’s too soon. The number of people in inten-
sive care has declined, but cases and deaths keep growing, par-
ticularly in rural areas that were spared early on. “Reopening
now is a gross mistake,” says Pedro Hallal, the dean of the
Federal University of Pelotas, who coordinated a large-scale
study of how many Brazilians have been exposed to the virus.
(It estimated that half a million people in Rio de Janeiro have
antibodies, 10 times the number of official cases, and that rates
in some northeastern cities are much higher.) “It’s like we’re
saying, ‘Let’s go out and see just how bad the virus can get.’ ”

In the working-class district of Nova Iguaçu, 40 minutes by
car from Rio’s glittering beaches, there’s a construction site just
down the road from an evangelical church, between a soccer
academy and an aviation school. The building was supposed
to be a temporary hospital for Covid-19 patients, and the state
government had announced its opening in May. But a reporter
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