assessments

What Brazil's New Administration Means for Business

4 MINS READJan 9, 2019 | 06:30 GMT
General view of the National Congress before Jair Bolsonaro's Jan. 1, 2019, swearing into the presidency in Brasilia.
(NELSON ALMEIDA/AFP/Getty Images)

General view of the National Congress before Jair Bolsonaro's Jan. 1, 2019, swearing into the presidency in Brasilia.

Highlights
  • Brazilian President Jair Bolsonaro's more aggressive stance on fighting crime will relax rules of engagement for, and increase the use of lethal force by, law enforcement, putting bystanders at risk.
  • His pro-business policies will agitate campaigners for indigenous rights and left-wing groups more broadly, putting commercial interests in their target set.
  • And his possible move to Jerusalem of the Brazilian Embassy to Israel would likely agitate jihadists, though the threat would remain low in Brazil itself.

Editor's Note: This security-focused assessment is one of many such analyses found at Stratfor Threat Lens, a unique protective intelligence product designed with corporate security leaders in mind. Threat Lens enables industry professionals and organizations to anticipate, identify, measure and mitigate emerging threats to people, assets, and intellectual property the world over. Threat Lens is the only unified solution that analyzes and forecasts security risk from a holistic perspective, bringing all the most relevant global insights into a single, interactive threat dashboard.

The administration of Jair Bolsonaro, sworn into office Jan. 1 as Brazil's president, faces numerous security challenges, including high crime rates in several of Brazil's major urban areas, a major refugee influx from neighboring Venezuela, and the threat of criminal militias continuing to expand their operations out of Colombia and Venezuela into northern Brazil. His policies may exacerbate the risks to foreign organizations from crime, political unrest, and left-wing and jihadist violence.

Crime

Bolsonaro has called on Brazil's security forces to fight criminals in Brazil's major cities more aggressively. But increased federal pressure will likely follow patterns seen before in which violence temporarily drops in areas where law enforcement resources are expanded, only to increase in areas where criminals move to avoid stepped-up police operations or in areas where police resources decline. Another pattern likely to repeat itself is spillovers of violence sparked by anti-crime operations inside Brazil's enormous shantytowns known as favelas into nearby affluent areas or onto major roadways.

Meanwhile, Bolsonaro's call to make it easier for police to use lethal force on suspects without inviting legal scrutiny will likely inspire security personnel to use deadly force more liberally regardless of whether the law changes to accommodate to this. Whether or not this dampens crime, it will put bystanders — including tourists  — at risk of becoming collateral damage.

Political Unrest

Shortly after his inauguration, Bolsonaro began acting on promises to create a more welcoming environment for foreign investment. To this end, the administration has already reorganized how the federal government interacts with indigenous Brazilians. Bolsonaro eventually will likely encourage foreign investment in agricultural and energy projects in environmentally sensitive areas that indigenous groups could also claim — a move that would spur major anti-government protests.

This graphic shows the recent trends in Brazil's gross domestic product, as well as unemployment and suicide rates.

This graphic shows the recent trends in Brazil's gross domestic product, as well as unemployment and suicide rates. 

Overseas companies with investment in controversial projects in ecologically sensitive or indigenous territory could also see individuals and groups sympathetic to indigenous rights protest their offices and events, whether in Brazil or abroad. Groups such as Greenpeace and the Rainforest Action Network have an international presence, and often look to capitalize on controversial projects.  

A wide array of nonindigenous-focused groups, including labor unions, is also likely to protest Bolsonaro's moves to welcome foreign investment when and as they affect their interests. Previous protest actions of this sort, especially those carried out by labor unions, have caused severe disruptions nationwide.

Terrorism

Bolsonaro's approach to fighting crime and his expressions of admiration for Brazil's former military dictatorship could prompt far-left elements to launch attacks. Such groups have long been active in Brazil, but have typically posed a minor threat focused on using parcel bombs to target infrastructure. The risk they might shift their target set to include state institutions or private interests should not be ruled out. Firms operating in Brazil should, therefore, ensure they have strong mail screening procedures in place, and that their staff understands how to handle suspicious packages.

Less likely is a jihadist backlash to the potential move to Jerusalem by Bolsonaro — who enjoys strong support from Brazil's evangelical community — of Brazil's Embassy to Israel. The jihadist threat in Brazil is currently low, and likely to stay that way no matter what course on the embassy Bolsonaro takes, though it could put Brazilian citizens or companies abroad at greater risk of jihadist attack. Shiite militant group Hezbollah, which maintains a presence in Brazil as part of its overseas criminal operations, would likely not carry out such an attack since it would not want to jeopardize its lucrative operations there.

Forecast

Overall, Bolsonaro's administration is unlikely to improve the security situation in Brazil. Instead, his policies will likely lead to:

  • Moderate increases in violence in urban centers.
  • Increased violence in rural areas.  
  • Sustained labor protest and possible strikes.

Organizations and travelers to Brazil should maintain a heightened degree of caution, and plan for increased disruption.

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