According to the new tax reform, basic products will be tax-exempt, while the reform includes a tax on products harmful to health or the environment, such as tobacco, alcohol, sodas, and pesticides
The tax reform will result in a considerable reduction in business costs and an additional annual GDP growth of at least 1 percent.
On Wednesday, Brazilian President Lula da Silva led a session of the Parliament that brought together the entire political class for the enactment of a tax reform considered “historic.”
Approved last week, the new regulations mark a historic milestone by achieving tax simplification that had not been accomplished in the past 30 years. During this period, the tax burden had exceeded 40 percent.
“It’s a extremely important day,” said Lula, celebrating the parliamentary debate on a tax law where around 20 political parties put forth their proposals.
“The reform won’t solve all problems, but it will help address them with a fairer tax system,” the Brazilian president added.
One of the main changes in the new system is the creation of a Value Added Tax (VAT) set at around 25 percent, unifying five taxes applied to consumption.
The text reads, “What makes you happy? It is to see that ‘the economy has grown more than any economist imagined,’ President Lula said during the session in the Lower Chamber on Wednesday when the reform to the Tax Law was promulgated.”
VAT collections will be directed, on the one hand, to the federal government and, on the other hand, to state governments and municipalities.
According to the new tax reform, basic products will be tax-exempt, while the reform includes a tax on products harmful to health or the environment, such as tobacco, alcohol, sodas, and pesticides.
The Lula administration argues that the tax reform will result in a considerable reduction in business costs and an additional annual GDP growth of at least 1 percent.
In addition to worker support, the tax reform received approval from financial markets. In this regard, the credit rating agency Standard and Poor’s upgraded Brazil’s rating from BB- to BB.
The BRICS Ambassador at large, Anil Sooklal, has stated that a further 20 countries, in addition to the recently proposed six new members invited earlier this year, have applied to join the BRICS group. When discussing South Africa’s current Presidency of the BRICS, he stated in late November that “Over 20 countries have formally applied to join BRICS, while the same number have expressed interest. This is affirmation that BRICS is playing an important role in championing emerging and developing economies. There are a large number of interested parties and these will be dealt with by the respective Foreign Ministers.”
At present, the BRICS includes Brazil, Russia, India, China and South Africa, while Egypt, Ethiopia, Iran, Saudi Arabia and the UAE are expected to join from the coming January 1st.
Argentina was also invited to join however with a recent change in the political regime is now expected to decline. The five current members of BRICS are responsible for 37% of all global trade.
The 20 New BRICS Candidate Countries
In terms of the 20 new candidates, what will be attractive to many is the fact that the BRICS does not insist upon formal trade negotiations and the permanent imposition of tariff reductions. Rather than a defined tariff reduction regime, the BRICS has a far looser approach. This removes political barriers that include insistence on market and political reforms, which is more of a Western approach, and also means that tariff reductions and trade development enhancements can be implemented on an as-need basis. These are fundamental points of interests to emerging economies who may otherwise struggle to compete with cheap imports. It also allows more autocratic regimes to participate without the need to introduce unwelcome reforms that may not be considered in their national interest. Most of the 20 applicants have not been publicly identified, however in my experienced opinion are likely to include the following.
Afghanistan
An outlier, but Afghanistan has significant resources and is a member of the BRI. Diplomatic changes are required, but China, India and Russia are all keen to see redevelopment in the country once political stability can be secured.
Algeria
In terms of market size, Algeria has the tenth largest proven natural gas reserves globally, is the world’s sixth-largest gas exporter, and has the world’s third-largest untapped shale gas resources.
Bangladesh
Bangladesh is one of the world’s top five fastest growing economies and is undergoing significant infrastructure and trade development reforms. It shares a 4,100 km border with India.
Bolivia
Asset-rich but relatively poor, Bolivia has the fastest GDP growth rate in Latin America.
Cuba
Cuba’s sanctions defiance has long made it a favorite of China and Russia when wanting to annoy the United States. It also has significant agreements with China and Russia, is a member of the BRI and has significant Caribbean and LatAm influence.
Ecuador
Ecuador is negotiating Free Trade Agreements with both China and the Eurasian Economic Union. It would make sense to substitute these with a looser BRICS arrangement.
Indonesia
One of Asia’s leading economies, Indonesia’s potential has again been raised to join BRICS. In July 2023, Jakarta accepted an invitation to participate in the 2023 BRICS summit.
Kazakhstan Kazakhstan’s economy is highly dependent on oil and related products. In addition to oil, its main export commodities include natural gas, ferrous metals, copper, aluminum, zinc and uranium.
Mongolia
Mongolia is both a problem and solution, while geographically attractive. It requires extensive investment in its energy sector; yet is resource-rich and a transit point between Russia, Kazakhstan and China. It is not a member of any trade bloc, with a looser BRICS arrangement better suited to maintaining its regional impartiality.
Nicaragua
Nicaragua is a mining play and the leading gold-producing country in Central America. It has a Free Trade Agreement with the ALBA bloc, and is an influential player in the Caribbean.
Nigeria
Nigeria’s Foreign Minister Yusuf Tuggar has announced that the country intends to become a member of the BRICS group of nations within the next two years. Nigeria has a GDP of US$448 billion, a population of 213 million and a GDP per capita of US$2,500. It has the world’s 9th largest gas reserves and significant oil reserves.
Pakistan
Pakistan has filed an application to join the BRICS group of nations in 2024 and is counting on Russia’s assistance during the membership process, the country’s newly appointed Ambassador to Russia Muhammad Khalid Jamali has stated.
Senegal
Senegal is a medium capacity gold mining and energy player, with reserves in gold, oil, and gas. The energy industry is at a growth stage as reserves have only recently been found. The energy-hungry BRICS nations will be keen to secure its supplies.
Sri Lanka
Sri Lanka isn’t keen on opening up its markets yet has significant economic problems. China is interested in port and Indian Ocean access while Russian tourism investments are increasing. A BRICS agreement would be loose enough to satisfy all concerns, while India will want to keep an eye on it.
Sudan
Sudan’s top five export markets are 100% BRICS – China, Russia, Saudi Arabia, India, and the UAE. Sudan also has regional clout. It is Africa’s third-largest country by area, and is a member of the League of Arab States (LAS). Should Sudan join the BRICS it would give the group complete control of the Red Sea supply routes.
Thailand
Thailand is one of ASEAN’s largest economies, via ASEAN it has additional Free Trade Agreements with Australia, New Zealand, Japan, South Korea, China, Hong Kong and India, and agreements with Chile, and Peru. Thailand is also a signatory to the RCEP FTA between ASEAN and Australia, China, Japan, New Zealand, and South Korea.
Turkiye
Turkiye’s trade figures with the current and most of the upcoming BRICS members show significant growth. Getting access to BRICS NDB funding may also prove attractive for Ankara as talks are expected across a number of issues.
Uruguay
Uruguay has joined the BRICS New Development Bank – a sure sign that official BRICS membership is pending.
Uzbekistan
Uzbekistan is one of Central Asia’s fastest growing economies, yet it is hampered by being double-landlocked. Membership of BRICS would give it market access to China, Europe, and the rest of Asia in a more protected manner.
Venezuela
Another outlier, but its energy reserves and political stance fit well with China and Russia’s needs.
Additional candidates are also likely to include Costa Rica, El Salvador, Guatemala, Honduras, Panama, Chile, Peru, Azerbaijan, Tajikistan, Turkmenistan, Vietnam, Cameroon, DR Congo, Kenya and Tanzania among others.
Summary
At first glance this may appear a disparate and disjointed group with little in common. Yet this is part of the appeal. In the West, trade partner economies are typically viewed in terms of economic capability, and their immediate usefulness (or otherwise) to Western economies. Emerging economies that show promise are often ‘encouraged’ to embark on political and economic reforms to ‘bring them to international standards’. What has become apparent is that this tends to mean ‘Western benefits’ take precedence over these economies. That has included inadvisable World Bank loans, and the imposition of US dollar and Euro trade at the expense of their sovereign currencies.
In gathering together the ‘developing’ or ‘emerging’ economies, the BRICS have taken a bet on the future. While some potential members may fall into future difficulties created by regional conflicts, most will not. Absorbing these new members will take time – but could be completed by 2030.
Closer examination also reveals that many of the 20 listed above are significant economies, often amongst the leading players within their own respective trade blocs. These include the Greater Arab Free Trade Area (GAFTA), Latin America’s Mercosur, the African Continental Free Trade Area (AfCFTA), the Eurasian Economic Union (EAEU), and ASEAN, amongst others. Having BRICS members inserted into these regional blocs significantly enhances the BRICS own reach and influence within them. By comparison, the European Union appears strictly rigid in its approach. It resembles a closed market rather than an open one. In this way, the BRICS can be seen as an antidote to the previously over-regulated Western trade group systems, where trade negotiations are measured in decades and political conditions imposed in return for Western market access.
What is happening instead is far more revolutionary, and is leading to a rather more considered, and inclusive multi-lateral approach. The BRICS movement is developing more as a trade philosophy than a specific bloc – and will pave the way ahead in terms of global trade flows well into the coming decades.
Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates.
US policy towards Latin America and the Caribbean continued in a seamless transition from Trump to Biden, but the terrain over which it operated shifted left. The balance between the US drive to dominate its “backyard” and its counterpart, the Bolivarian cause of regional independence and integration, continued to tip portside in 2021 with major popular electoral victories in Chile, Honduras, and Peru. These follow the previous year’s reversal of the coup in Bolivia.
Central has been the struggle of the ALBA (Bolivarian Alliance for the Peoples of our America) countries – particularly Venezuela, Cuba, and Nicaragua – against the asphyxiating US blockade and other regime-change measures. Presidential candidate Biden pledged to review Trump’s policy of US sanctions against a third of humanity. The presumptive intention of the review was to ameliorate the human suffering caused by these unilateral coercive measures, considered illegal under international law. Following the review, Biden has instead tightened the screws, more effectively weaponizing the COVID crisis.
Andean Nations
The unrelenting US regime-change campaign against Venezuela has had a corrosive effect on Venezuela’s attempt to build socialism. With the economy de facto dollarized, among those hardest hit are government workers, the informal sector, and those without access to dollar remittances from abroad.
Nonetheless, Venezuela’s resistance to the continued US “maximum pressure” hybrid warfare is a triumph in itself. Recent economic indicators have shown an upturn with significant growth in national food and oil production and an end to hyperinflation. Further, the government has built 3.7 million housing units, distributed food to 7 million through the CLAP program, and adroitly handled the COVID pandemic.
When Trump recognized Juan Guaidó as president of Venezuela in 2019, the then 35-year-old US security asset had never run for a nationwide office and was unknown to over 80% of the Venezuelans. Back then some 50 of the US’s closest allies recognized Guaidó; now barely a dozen does so. Contrary to campaign trail inuendoes that Biden would enter into dialogue with the democratically elected president of Venezuela, Nicolás Maduro, Biden has continued the embarrassing Guaidó charade.
The November 21 municipal and regional elections were a double triumph for Venezuela’s Bolivarian Revolution: the ruling Socialist Party (PSUV) won significantly while the extreme right opposition (including Guaidó’s party) was compelled to participate, implicitly recognizing the Maduro government.
Venezuelan special envoy Alex Saab was extradited – really kidnapped – to the US on October 16 on the vague and difficult to disprove charge of “conspiracy” to money launder. Swiss authorities, after an exhaustive 3-year investigation, had found no evidence of money laundering. Saab’s real “crime” was trying to bring humanitarian aid to Venezuela via legal international trade but circumventing the illegal US blockade. This egregious example of US extra-territorial judicial overreach is being contested by Saab’s legal defense because, as a diplomat, he has absolute immunity from arrest under the Vienna Convention. His case has become a major cause in Venezuela and internationally.
Meanwhile, Colombia, chief regional US client state, the biggest recipient of US military aid in the hemisphere, and the largest world source of cocaine, is a staging point for paramilitary attacks on Venezuela. President Iván Duque continues to disregard the 2016 peace agreement with the guerrilla FARC as Colombia endures a pandemic of rightwing violence especially against human rights defenders and former guerillas.
On April 28, Duque’s proposed neoliberal tax bill precipitated a national strike mobilizing a broad coalition of unions, members of indigenous and Afro-descendent communities, social activists, and campesinos. They carried out sustained actions across the country for nearly two months, followed by a renewed national strike wave, starting on August 26. The approaching 2022 presidential election could portend a sea change for the popular movement where leftist Senator Gustavo Petro is leading in the polls.
In Ecuador, Andrés Arauz won the first-round presidential election on February 7 with a 13-point lead over Guillermo Lasso, but short of the 40% or more needed to avoid the April 13 runoff, which he lost. A victim of a massive disinformation campaign, Arauz was a successor of former President Rafael Correa’s leftist Citizen Revolution, which still holds the largest bloc in the National Assembly. The “NGO left,” funded by the US and its European allies, contributed to the electoral reversal. Elements of the indigenous Pachakutik party have allied with the new president, a wealthy banker, to implement a neo-liberal agenda.
In Peru, Pedro Castillo, a rural school teacher and a Marxist, won the presidency in a June 6 runoff against hard-right Keiko Fujimori, daughter of now imprisoned and former president Alberto Fujimori. Castillo won by the slimmest of margins and now faces rightwing lawfare and the possibility of a coup. Just a few weeks into his presidency, he was forced to replace his leftist foreign Minister, Hector Béjar, with someone more favorable to the rightwing opposition and the military.
In Bolivia, a US-backed coup deposed leftist President Evo Morales in 2019 and temporarily installed a rightist. Evo’s Movement Towards Socialism (MAS) party successor, Luis Arce, took back the presidency last year in a landslide election. With the rightwing still threatening, a massive weeklong March for the Homeland of Bolivian workers, campesinos, and indigenous rallied in support of the government in late November.
Voting intentions as of July 7, 2021 according to the company Poder Data. | Photo: Twitter/ @poderdata_
“We are going to have problems,” Bolsonaro said in allusion to the upcoming elections in which Lula da Silva would be the winner, as all current polls predict.
On Wednesday, Brazil’s President Jair Bolsonaro criticized the electronic voting system and threatened to disregard the outcome of the 2022 presidential elections if paper ballot voting is not adopted.
“If that method continues, we are going to have problems because one side may not accept the result. And that side, obviously, will be our side,” the far-right politician said.
“We are going to have problems next year,” Bolsonaro stressed in allusion to the upcoming elections in which the Workers’ Party (PT) leader Lula da Silva would be the winner, as all current polls predict.
In Brazil, the electronic voting system was adopted more than two decades ago and used during the 2018 elections that brought Bolsonaro to power. However, the former Capitan now says that electronic voting allows fraud and claims he has “proof” of that.
Since he claims that there was even fraud in the 2018 elections, the Superior Electoral Court demanded that he present the evidence he swears he has. Instead of proving his allegations, however, Bolsonaro demands the electoral authorities to “present some proof that there is no fraud” with the electronic ballot boxes.
Previously, the far-right President presented a bill to Congress to reestablish paper ballot voting. So far, eleven political parties, including some center and right-wing organizations, have spoken out against his proposal and in favor of keeping the electronic voting system.
In response to the lawmakers and their criticisms, Bolsonaro reiterated that “they can create many problems for next year”. He insists his bill only intends that “the vote be auditable and transparent”.
Jair Bolsonaro takes off his mask in a motorcycle shop,
Brasilia, Brazil, July 25, 2020. | Photo: EFE
In Brazil, 195,516 out of 2,419,091 COVID-19 cases belong to infected health workers.
Brazil’s Trade Union Network UniSaude filed a complaint in the International Criminal Court (ICC) against President Jair Bolsonaro for crimes against humanity and genocide during the COVID-19 crisis.
“Bolsonaro’s management of the pandemic has been criminal and negligent. He has risked the lives of health professionals and the people,” UniSaude denounced.
Despite testing COVID-19 positive, the far-right politician refuses to take preventive measures to protect citizens. He has also been seen greeting his supporters without wearing a mask, promoting meetings, and minimizing the pandemic’s impact in the country.
On Saturday, after learning that he had already overcome the disease, Bolsonaro drove his motorcycle without a mask around the Alvorada Palace.
UniSaude has also condemned the fact that Brazil has been without a health minister for over two months. Since the last health minister resigned from office in May, the inexperienced General Eduardo Pazuello has temporarily occupied this position.
“Brazil’s situation is extremely serious, and this has happened because of Bolsonaro’s unreliable decisions,” UniSaude said.
“Our accusation shows the people’s pain and concern about the health crisis,” nurse Jhuliana Rodrigues assured.
As of Monday, Brazil recorded 2,419,091 COVID-19 infections and 87,004 deaths. Among the infected people, 195,516 are health workers.
A gang of bandits arrived in Brazil’s Government thanks to that coup. The same as the Macri Administration in Argentina, they immediately started to govern for the one percent and the defense of the national sovereignty and social welfare set up by the Workers’ Party was taken to pieces. Uncontrolled financial speculation was unleashed, as well as selling natural resources and public goods to transnational companies. Though these were the most devastating defeats for the left in this analyzed period, they were not the only ones. In 2009, the Manuel Zelaya Administration was ousted by a military coup openly orchestrated by the United States, for having joined the Petrocaribe oil alliance, the ALBA treaty, and fostering a decent and sovereign foreign policy for Honduras. Four years later, Paraguay’s Fernando Lugo was overthrown by a parliamentary-media coup. He was a prominent progressive supporter.It was confirmed in 2019 that the end of the progressive cycle in Latin America and the Caribbean was nothing but a fallacy. The overwhelming victories of Andres Manuel Lopez Obrador in Mexico and Alberto Fernandez in Argentina would be enough to refute it. Nevertheless, the alleged end of this cycle was based on real and very sad but at the same time exemplary facts for popular, progressive, and revolutionary forces. After all, popular governments in this region following Venezuela’s Hugo Chavez in 1999 seemed to be not only moving backward but at a standstill as two very serious defeats were suffered by Our America’s popular movement by 2016: The victory of a neoliberal and pro-imperialist coalition headed by Mauricio Macri in Argentina; and a media-judicial-parliamentary coup d’état staged against Dilma Rousseff in Brazil on August 2016.
Moreover, Lenin Moreno’s treason to his comrades of the Citizen Revolution, the Ecuadorian people, and to his own rhetoric since he joined Rafael Correa’s first term in office until he was elected President himself, moving his country back to neoliberalism and unprecedentedly surrendering to Washington. Similarly, Brazilian ex-president, Luiz Inacio Lula da Silva was unfairly and evilly sentenced to prison on April 2019, an evident maneuver of the U.S. Empire and local oligarchies to prevent his certain victory on the October presidential elections taking place that same year. As a result of it, Jair Bolsonaro came to be a reinforcement of extreme right-wing positions not only in the region but around the world; as well as to the deepening of neoliberal policies and even more servile behavior towards imperialism, brought to their own countries by Chile’s Sebastian Piñera and Colombia’s Ivan Duque.
Regional organizations such as the Union of South American Nations (UNASUR)—today dissolved—and the intergovernmental mechanism for dialogue and political agreement CELAC—at a standstill—also suffered hard blows as a consequence of these events. Coming to existence after 2004, they had been able to help make important steps towards unity, integration, and achieving of sovereign policies in Latin America and the Caribbean. Meanwhile, Petrocaribe and ALBA were impacted by the decline in oil prices and, above all, by the increasing economic war staged by the United States against Venezuela and Cuba.
But three highly significant events can be described as the most outstanding issues during this year and they represent undeniable victories for the revolutionary and progressive forces, besides the two mentioned above victories in Mexico and Argentina. First, large people’s protests across the continent since the first quarter of the year, cornering governments in several countries of the region, particularly Chile’s Piñera and Colombia’s Alvaro Uribe-Ivan Duque. The stability and public order existing in Cuba, Venezuela, Nicaragua, and Mexico are opposite to the lack of unpopular right-wing governments, all of them hanging by a thread and basically sustained with the United States’ support. The fact is that neoliberalism cannot govern south of the Rio Grande without brutally violating the rules of liberal democracy. A second issue is Cuba’s and Venezuela’s brave resistance and struggle for their own development, each of them with their own set of circumstances against Washington’s relentless and increasing economic war, marked in Venezuelan by an ongoing coup and serious violent counter-revolutionary events. Third, the relevant role played by the Caribbean Community (CARICOM) defending the principles of the rule of law, evidenced on December 19 when the United States and Luis Almagro were defeated in the Organization of American States (OAS), as well as other events along this year. Bolivia’s coup d’état, the defeat of Uruguay’s Broad Front, and some other issues are pending for our next article.
Brazil’s President Jair Bolsonaro looks on as he leaves the
Alvorada Palace in Brasilia, Brazil December 12, 2019. | Photo: Reuters
The far-right government’s positive rating had already declined in Ibope’s four previous polls this year, falling from 35 percent in April. Its negative rating has risen from 27 percent in April.
The approval rating of Brazilian President Jair Bolsonaro’s government is dropping steadily and its negative rating is climbing, a CNI/Ibope poll showed on Friday, as his combative political style and a weak recovery weigh on his popularity.
The number of Brazilians that rate his government as great or good has slipped to 29 percent from 31 percent in September, while those that view it as bad or terrible have increased to 38 percent from 34 percent in the previous poll, the new survey said.
Public confidence in Bolsonaro’s governing style has dropped since he took office in January, the poll said. A majority of those polled, or 53 percent, do not approve of the way he is governing Brazil, up from 40 percent in April and 50 percent in September. Those who approve of his governing style has fallen to 40 percent from 51 percent in April and 44 percent in September.
The number of Brazilians who said they trusted Bolsonaro has also dropped off, within the margin of error, to 41 percent from 51 percent in April and 42 percent in September. Those who have no trust in him rose to 56 percent from 45 percent in April and 55 percent in September.
The survey polled 2,000 people and has a margin of error of plus or minus 1 percentage point. The poll commissioned by industry lobby CNI was carried out Dec. 5-8.
Left-wing forces in Latin America are warning of a revival of a Cold War era campaign by the U.S. of violent subterfuge and support for right-wing dictatorships across the region, Ben Norton reports.
Washington dubbed Nicaragua a threat to U.S. national security, and announced that it will be expanding its suffocating sanctions on the tiny Central American nation.
President Donald Trump is also turning up the heat on Mexico, baselessly linking the country to terrorism and even hinting at potential military intervention. The moves come as the country’s left-leaning President Andrés Manuel López Obrador warns of right-wing attempts at a coup.
As Washington’s rightist allies in Colombia, Brazil, Chile and Ecuador are desperately beating back massive grassroots uprisings against neoliberal austerity policies and yawning inequality gaps, the United States is ramping up its aggression against the region’s few remaining progressive governments.
These moves have led left-wing forces in Latin America to warn of a 21st-century revival of Operation Condor, the Cold War era campaign of violent subterfuge and U.S. support for right-wing dictatorships across the region.
Jair Bolsonaro takes off his mask in a motorcycle shop,
Brazil’s President Jair Bolsonaro looks on as he leaves the
JSC: Jamaicans in Solidarity with Cuba 