The Pandemic’s Worst-Case Scenario Is Unfolding in Brazil

(Bloomberg Businessweek) -- On a recent afternoon in São Luís, the capital of Maranhão state in northeastern Brazil, Hosana Lima Castro sat on a flimsy plastic chair in front of her house as stray dogs sniffed potholes in the narrow street and a few neighborhood kids launched kites. The bar across the way, where a few months ago an acquaintance of Castro’s had been shot, was closed because of the pandemic..Her job at a convenience store had disappeared too, so Castro, who’s 43 and shares her modest home with her father, two brothers, and two of her kids, had nowhere else to be. Although the novel coronavirus is widespread across Brazil’s northeast, she wasn’t wearing a mask. Nor was anyone else in her crowded neighborhood, where basic services have been so neglected that many residents have no access to clean water..Castro’s brother Moises, a garbage collector, was the first in her family to get sick. Then her other brother, Luciano, did too, followed by their father, Francisco, who has diabetes. He suffered badly, struggling to breathe and running a soaring fever. But no one in Castro’s household went to the hospital—a place that some in São Luís believe makes patients sicker than when they came in, or worse. “That would be a death sentence,” Castro said..As Asia, Western Europe, and parts of the U.S. emerge from what will hopefully be the worst of the pandemic, the virus in Brazil isn’t slowing down. Between late May and mid-June the country galloped past Spain, Italy, and the U.K. in total fatalities, which now exceed 51,000, the second-highest toll after the U.S. It’s second in overall cases too, with more than 1 million confirmed infections. With local officials now lifting quarantines despite continued growth in cases, it’s conceivable that, when Covid-19 finally recedes, Brazil will have been hit harder than any other country..The reasons Brazil has made such a perfect host for the coronavirus are diverse and not yet fully understood. Like the U.S. it never issued nationwide rules for social distancing. Even if the government had wanted to, the rules would have been impossible to enforce in a country of 210 million where some states are larger in land area than France. That left local officials to do as they saw fit, issuing orders that varied wildly and sometimes contradicted each other. Poverty is certainly also part of the picture: In the densely packed favelas threaded through Brazilian cities, social distancing isn’t feasible, and not working means not eating, especially with the cash-strapped state unable to provide enough support. So is the dysfunction of the government. Overcrowding in public hospitals is a long-standing problem, as is graft among the people who are supposed to build new ones..And then there’s President Jair Bolsonaro, a right-wing populist who came to power with a 2018 campaign that echoed Donald Trump’s pledges to “drain the swamp.” Since the coronavirus appeared in Brazil in late February, Bolsonaro has frequently obstructed efforts to contain it, demanding local officials abandon severe tactics like shuttering businesses, firing a health minister who pushed for a more aggressive response, and at one point limiting the disclosure of epidemiological data, saying that without the numbers there would “no longer be a story” on the evening news. (The Supreme Court ordered the government to resume releasing the figures.) While in the early weeks of the outbreak Bolsonaro’s intransigence resembled what was happening in the White House, even Trump grudgingly conceded the severity of the situation once the body count started to soar. Bolsonaro, meanwhile, has doubled down, insisting that the anti-malarial drug chloroquine is an effective treatment and claiming the number of cases is being exaggerated..The president’s office did not respond to requests for comment on this story. In a written response to questions, Brazil’s Health Ministry said it’s acted aggressively to test patients and add intensive-care beds, protective gear, and ventilators across the country, spending more than 11 billion reais ($2.1 billion) so far..Most local and state leaders have ignored Bolsonaro’s push to end lockdowns. Brazil has a federal system, and governors have wide powers over public health. But his continued dismissal of the pandemic’s seriousness has undermined distancing measures, while mismanagement and corruption at all levels of government have prevented help from getting to where it’s needed..The consequences are severe. In Pará, a vast and underdeveloped state that neighbors Maranhão, Covid-19 has been killing about 50 out of every 100,000 citizens, more than double the national average. “I saw people getting to the hospital with family members already dead in the passenger seat, people given CPR on the sidewalks because the hospitals are full,” says Alberto Beltrame, the state health secretary. One day in April, he visited the morgue in the capital, Belém. “There were 120 bodies, scattered everywhere. It’s something you’d see in a war.” As the virus’s spread continues, Brazil may be turning into the true worst-case scenario, a laboratory for what happens when a deadly and little-understood pathogen spreads without much restriction..Unlike past plagues, the coronavirus has spread in substantial part from the rich to the poor, with prosperous and well-connected global cities—Milan, London, New York—among the earliest hot spots outside China. The story in Brazil was similar. The first clusters emerged in São Paulo, Brazil’s financial capital, in early March as wealthy residents returned from overseas trips..One of the first so-called superspreader events was the wedding of a social media star, held at a beach-side resort in Bahia state on March 7. A 27-year-old São Paulo lawyer named Pedro Pacífico—an Instagram personality himself, with hundreds of thousands of followers for a feed devoted mainly to literary recommendations—was one of the guests. He felt lousy when he got home, figuring he had an exceptionally bad hangover. When he found out that another guest had been diagnosed with Covid-19, Pacífico went for a test. He had it too—as, he gradually learned, did about 15 of his friends. But at that point, Pacífico says over a video call, the disease seemed more like a nuisance than a threat. He isolated at home, suggesting quarantine reading to his followers and trading virus stories with other well-off paulistanos. “It was the novelty of it,” Pacífico says. “No one saw it coming, or thought it would be so bad.”.On the weekend of the Bahia wedding Bolsonaro was in Florida, visiting Trump at Mar-a-Lago in Palm Beach. The two leaders’ entourages took no real precautions, shaking hands and hugging as usual. The first person to test positive after returning home was Fabio Wajngarten, Bolsonaro’s communications chief. As everyone who deals with him knows, Wajngarten is what Jerry Seinfeld would call a close talker, with a habit of leaning in when he speaks. Five of the eight people who sat at his table at a Mar-a-Lago dinner tested positive, and in all 30 people on the trip got sick. One was Alexandre Fernandes, an athletic 44-year-old who’s developing a grain-export terminal in southern Brazil. After four days isolating in his apartment, Fernandes was so weak he couldn’t walk to the bathroom. He went to the hospital, where he was placed in intensive care. “I couldn’t pull the covers up in bed,” he says. At one point doctors thought he wouldn’t make it: “The nurse had to help me hold the phone so I could Facetime with my daughters to say goodbye.”.Even as the virus spread through his inner circle, the president was sending contradictory signals. On March 12 he asked supporters to call off planned rallies to support his government—but then turned up at one in Brasília anyway, unmasked and fist-bumping with attendees. Later that month he urged state governors to curb their quarantines and claimed that, even though he’s 65, as a “former athlete” he had nothing to fear from Covid-19. “The virus is here,” he said after walking around visiting shops one Sunday. “We’re going to have to face it, but face it like a f---ing man.”.Still, in those early weeks Brazilians took heart in the actions of the health minister, a 55-year-old doctor named Luiz Henrique Mandetta. He spoke calmly to the press almost daily, presenting the latest data and pushing lawmakers to buy ventilators and face masks. Mandetta acknowledged that the virus was a severe threat that could be contained only through distancing measures and intensive preparation. He also said that counting on unproven treatments like chloroquine—being heavily promoted at the time by Bolsonaro and his supporters, mimicking a similar campaign by Trump—was counterproductive, or even dangerous..During a visit to the site of a temporary hospital near Brasília in mid-April, Mandetta stood to one side as the president walked into a dense crowd of fans, some of them climbing over each other to get a better look. One woman asked him to autograph her soccer jersey; after Bolsonaro obliged, she leaned in and kissed his hand. In a TV interview the next day, Mandetta said it was “clearly a mistake” that people were “going into bakeries and markets and putting themselves in crowded situations.” He didn’t name Bolsonaro, but he didn’t have to. A few days later he was fired..Mandetta’s replacement, an oncologist named Nelson Teich, quit after less than a month. He was replaced by a general—Bolsonaro is a former army officer and has named soldiers to several top posts—with no medical experience. With the national caseload nearing 300,000, the ministry issued guidelines allowing doctors in the public health system to prescribe chloroquine and its sister drug, hydroxychloroquine, for even mild Covid-19 cases. (In its written response, the ministry said it’s following “bioethical principles” by making them available and that Brazilians treated with the drugs have had good results.) Toward the end of May, Bolsonaro shared some good news: The U.S. would be sending 2 million doses..The eve of Brazil’s Valentine’s Day, in mid-June, is one of the busier nights of the year at the Villa Roma pizzeria, in São Paulo’s upscale Jardins district. In 2019 tables were booked solid a month in advance. But this year owner Gabriel Pinheiro was standing alone wearing a black face mask behind the wooden bar, greeting deliverymen who came one at a time and ventured no more than 10 steps into the restaurant. He’d put out a bottle of sanitizer, next to a little sign instructing them to clean their bags before putting orders inside. The two-story window at the back, normally lit to reveal lush plant life beyond, was dark, while the second floor was filled with stacks of pizza boxes and new, simplified menus that are easier to clean than the thick booklets they replaced. Running a restaurant at this time of year “is usually such a good feeling,” Pinheiro said. “Now it’s depressing.”.Villa Roma has been closed to dine-in customers since mid-March, when São Paulo Governor João Doria Jr. defied Bolsonaro to impose what became a more than two-month lockdown, although it was only loosely enforced. Delivery business, announced by computer beeps that prompted Pinheiro and his manager, Carolina, to shout orders into the kitchen, has helped the restaurant stay afloat, if barely. Sales have plunged to about 20% of the preshutdown level, and of 30 employees only 10 are still at work. Desperate to cut costs, Pinheiro renegotiated his rent, asked suppliers for more time to settle bills, and took on tasks like buying goods and handling payroll himself. “We’re about breaking even, but it’s very tough,” he said. “More and more restaurants are closing, and the state is not doing anything.”.Pinheiro is relatively lucky. Nationally, restaurants and bars had fired more than 1.2 million workers by early June, according to industry association Abrasel. The organization’s president in São Paulo, Percival Maricato, says that while about 80% of owners tried to get financing to tide them over, the vast majority were unsuccessful. Banks are supposed to be providing plenty of cash—Bolsonaro’s government recently slashed reserve requirements to give them more room to lend—but bureaucracy, demands for collateral, and high rates have prevented 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 before the pandemic, the result of decades of overspending 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 last three decades. Some are paid almost twice as much as equivalent staff in the private sector and receive outsize retirement packages, although Bolsonaro succeeded in passing a controversial pension 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 to Covid-19 is a 600-real monthly stipend for Brazil’s huge number of informal workers, accounting for the bulk of the roughly 400 billion reais spent on emergency support so far. (The government has also used an insurance fund to pay furloughed employees and provided emergency loans to states.) The stipend, recently extended to run for five months, drew praise—but at a little over half the minimum wage it’s not enough for many citizens to get by, especially in big cities. Disbursements have also been delayed by problems that included 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 prolonged recession will be deadlier than the virus—and the only solution is to swiftly restart the economy. That’s not really in his power, but his pronouncements still have a significant effect on people’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 Doria’s 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 lockdown restrictions on June 1, gradually allowing retailers and other businesses to reopen, although restaurants and parks are still off-limits. Health experts are concerned that, even in the first place in Brazil to experience a Covid-19 outbreak, it’s too soon. The number of people in intensive care has declined, but cases and deaths continue to grow, particularly 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 coronavirus. (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 for Bloomberg Businessweek who visited in June found it far from finished, with no obvious signs of ongoing construction, let alone patients. That hadn’t stopped someone from papering a concrete wall at the edge of the site with posters touting the government’s Covid-19 response efforts. “It wasn’t ready when we needed it most,” said Auria Almeida, a middle-aged woman who was standing in the shade nearby. The facility seemed to have made little impression on the locals. A teenage boy who was selling oranges on a street corner had never heard of it. Waiting in line at an auto parts store, a man named Fabio Carvalho took it as a given that funds for the hospital had been misappropriated. “The money has gone all over the place,” he said..The story in Nova Iguaçu has played out in cities across the country, with promised temporary hospitals sitting unfinished or unequipped months into the pandemic. The challenges in getting them up and running are a reminder that, of all Brazil’s handicaps in fighting Covid-19, corruption—and the state’s related failures in delivering essential projects—might be the most disheartening. Brazil has a rich history of graft, ranging from palm-greasing to outright theft. Luiz Inácio Lula da Silva, who served as president from 2003 to 2010, was jailed on charges stemming from Operation Carwash, a sprawling investigation into bribery involving the state oil company, Petrobras. Bolsonaro, who pledged to clean up scandals associated with Lula and his successor, Dilma Rousseff, has been embroiled in allegations that he tried to prevent federal police from investigating his family. (Both the current and former president deny wrongdoing.).Not surprisingly, Brazil’s sudden need for more masks, gowns, ventilators, and hospital beds, already complicated by a global rush for the same equipment, wasn’t wasted by bureaucrats and politicians looking to make some extra cash. Police in several states are investigating the suspected misuse of funds, overpayments for supplies that never arrived, and contract-padding for politically connected businesspeople. Health officials in the states of Pará and Rio de Janeiro have been fired, while lawmakers in the latter are trying to oust Governor Wilson Witzel over suspicions he used hospital contracts to line his pockets. (Witzel says the allegations are politically motivated and he did nothing wrong.).Brazil has nowhere near the medical resources to handle a second wave of cases—let alone the first, which is still expanding, spreading along bus routes and waterways deep into the interior. To make matters worse, July, August, and September are winter months in the southern hemisphere, potentially bringing an even faster uptick in infections. Researchers at the Pontifical Catholic University of Rio de Janeiro estimate cases could reach 1.4 million before the end of June, bringing the death toll to almost 60,000. By mid-July, says the University of Washington’s Institute for Health Metrics and Evaluation, Brazil will overtake the U.S. in per-capita fatalities..“We have many months still to go,” says Julio Croda, an epidemiologist who previously worked in infectious-disease surveillance at the Brazilian health ministry. “What’s sad to see is that the curve is still steepening.” —With Peter Millard Read next: Pandemic Exposes Plight of Portugal’s African Migrants.©2020 Bloomberg L.P.

The Pandemic’s Worst-Case Scenario Is Unfolding in Brazil

It’s conceivable that, when Covid-19 finally recedes, Brazil will have been hit harder than any other country.

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