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Carnival and coronavouchers: Brazil’s economic struggles

A member of Imperio Serrano Samba School gestures during their 2019 parade

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The celebration usually brings millions out onto the streets

They call it the greatest spectacle on earth and for Brazil, carnival is everything.

While Rio de Janeiro’s carnival is Brazil’s most famous, cities such as São Paulo have in the past few years been starting to make a name for themselves.

With a spectacle of such proportions, preparation is everything and samba schools would normally already be getting ready for next year’s carnival, due to be held in February 2021.

Currently, São Paulo’s carnival parade – the highlight of the festivities – has already been delayed by eight months until October 2021.

But depending on how the crisis unravels, there is no guarantee it will not be delayed further. There are question marks over what Rio’s plans are, too.

At this point of the year, Imperio da Casa Verde, one of São Paulo’s leading samba schools, would have already planned their storyline and started thinking about the costumes, ready to start the physical training in October.

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Carnival, held in the days leading up to Ash Wednesday, is a major draw for tourists visiting Brazil

But this year, the samba school’s warehouse has fallen silent. The floats from February’s revelries are yet to be fully dismantled. A massive furry tiger, the school’s symbol, stands at the door, about seven metres (23ft) high and 15 metres long. A symbol, too, of how time has stood still for these past few months.

Uncertainty over carnival

“It’s hugely difficult,” says Sergio Luis de Oliveira, who is head of harmony at Imperio da Casa Verde. “We have families who directly or indirectly depend on carnival and without knowing for sure if carnival is going ahead, all our staff are furloughed, they can’t work.”

Mr Oliveira says that without a vaccine, he cannot see carnival being viable and the future is uncertain.

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Plans for next year have already been heavily disrupted by the virus

“The economic effect is huge,” says Mr Oliveira. “Carnival generates huge revenue not just for a city but for the neighbourhood, too. When you think of the water sellers, the popcorn, the industries that feed into the samba school – I can’t even measure the damage.”

Carnival is probably the most well-known casualty of Brazil’s economic crisis. Tourism represents about 8% of Brazil’s GDP. But businesses in all sectors across the country have been struggling.

Struggling industry

Between March and April, Brazil’s industrial production fell nearly 20%, the largest drop on record.

Julio Cesar has suffered from that fallout. He used to have a full-time job in a clothes factory and he supplemented that income with making costumes for carnival.

But when the pandemic hit, the factory ended his contract and with carnival delayed, he does not have that work coming in either. He used to earn around $500 (£380) a month but now he is lucky to earn $50.

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Julio Cesar is one of millions being helped with a payment dubbed a “coronavoucher”

He does however receive 600 reais ($107; £82) in the form of a monthly government handout for informal workers.

“The government help went some way but I have to choose what my money goes towards each month – rent, bills or food,” says Mr Cesar.

Mr Cesar used to dream of buying a house or a car, even having his own studio. But he cannot see how he can do that now.

“I won’t give up though. We can’t lack hope – the only thing people of humble means can do is fight to survive.”

Mr Cesar is one of more than 60 million people who have received the so-called “coronavoucher”. Experts say that it has helped soften the blow of the pandemic in Brazil.

Popular president

But it has also helped boost President Jair Bolsonaro’s approval ratings, the biggest example of that being in the poor north-east of the country, a region that was traditionally very supportive of leftist former President Luiz Inácio Lula da Silva because of his social welfare support. But now, far-right Jair Bolsonaro has become an unexpected saviour there.

“Given how substantial the cash relief programme was in terms of Brazilian average income, half of the population was able to end up with an income higher than what they had when the pandemic arrived,” explains economist Laura Carvalho.

But it comes at a price. According to President Bolsonaro, the programme costs R$50bn ($8.9bn; £6.8bn) a month. And considering how popular it has made him, it will not be an easy programme to put a stop to.

Fears for Brazil’s future

“He’s a very authoritarian person and it’s a risk for Brazilian democracy – and if he gets popular with his handouts, it’s even worse,” says Marcelo Kfoury of the Getúlio Vargas Foundation in São Paulo.

“We might start to see something similar to what happened in Venezuela with Chávez,” he says, referring to the former Venezuelan leader who gained wide popularity with his country’s poor through generous handouts, but who is accused by his critics of undermining Venezuela’s democratic institutions and mismanaging its economy.

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Jair Bolsonaro, who himself has had the virus, has faced criticism for his handling of the pandemic

For several years, Brazil had slowly been climbing out of a deep economic crisis and then came another hard blow. Between the start of the pandemic and mid-July, more than 700,000 businesses closed down – 99.8% of those businesses had fewer than 49 employees.

There is no clearer evidence of this downturn than the increasing number of unemployed people begging for food at traffic lights.

Political difference as the economy reopens

As the country slowly reopens, businesses and experts are assessing the economic damage.

“The discourse from the government from the start was that it wasn’t responsible for the economic crisis,” says Laura Carvalho.

Ms Carvalho says that the government instead blamed state and local governments and the lockdowns they imposed for the economic downturn.

“Obviously there is an attempt to transfer responsibility of this crisis,” she says. “And it’s also why state governors and mayors ended up reopening quickly because there’s a lot of pressure to reopen.”

Brazil’s economy is expected to shrink by 5.7% this year and most experts agree that Brazil’s crisis would have been worse if the most vulnerable had been left with nothing.

But what now? Inevitable austerity measures in the years ahead mean Brazilians will be paying for the pandemic for years to come.

And the political blame game is yet to get properly started.

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Media captionBrazil’s vice-president says the authorities have struggled to enforce social distancing measures

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