WEBVTT - The Pandemic's Worst-Case Scenario 0:00:00.240 --> 0:00:03.000 High. I'm Carol Masser and I'm Jason Kelly in Bloomberg 0:00:03.040 --> 0:00:06.200 Business Week. This week, the magazine continues to tackle the 0:00:06.280 --> 0:00:09.480 global pandemic and Carol as Asia, Western Europe, and parts 0:00:09.520 --> 0:00:11.760 of the US emerge from what will hopefully be the 0:00:11.760 --> 0:00:15.600 worst of the pandemic. The virus in Brazil isn't slowing down. 0:00:15.720 --> 0:00:19.040 You're so right, Jason, Brazil Maybe the Pandemics Perfect Storm. 0:00:19.160 --> 0:00:23.280 Total fatalities now exceed fifty one thousand. That's the second 0:00:23.360 --> 0:00:26.960 highest toll after the United States. It's second in overall 0:00:27.000 --> 0:00:30.360 cases as well, with more than one million confirmed infections. 0:00:30.480 --> 0:00:32.960 And to make matters worse, it's almost winter in the 0:00:33.000 --> 0:00:37.760 Southern Hemisphere, potentially bringing even faster uptick in infections and 0:00:37.800 --> 0:00:40.360 providing a glimpse of how the virus might fare later 0:00:40.400 --> 0:00:43.120 in the year elsewhere in the world. And Jason, when 0:00:43.120 --> 0:00:46.120 COVID nineteen finally receives While Brazil may very well have 0:00:46.200 --> 0:00:50.360 been hit harder than any other country, worst case scenario, 0:00:51.760 --> 0:00:55.680 cash strapped, dysfunctional, and led by a chloro queen obsessed 0:00:55.720 --> 0:01:01.320 populist Brazil Maybe the Pandemics Perfect Storm? By Julia Lte, 0:01:01.680 --> 0:01:07.440 Simone Iglesias, Martha Beck and Ethan Brauner. On a recent 0:01:07.520 --> 0:01:11.760 afternoon in Sauluis, the capital of Marenno State in northeastern Brazil, 0:01:12.200 --> 0:01:15.680 hosan Alima Castro sat on a flimsy plastic chair in 0:01:15.720 --> 0:01:19.000 front of her house as stray dogs sniffed potholes in 0:01:19.040 --> 0:01:22.480 the narrow street and a few neighborhood kids launched kites. 0:01:23.240 --> 0:01:25.720 The bar across the way, where a few months ago 0:01:25.800 --> 0:01:29.240 an acquaintance of Castro's had been shot, was closed because 0:01:29.240 --> 0:01:32.399 of the pandemic. Her job at a convenience store had 0:01:32.440 --> 0:01:36.720 disappeared too, so Castro, whose forty three and shares her 0:01:36.760 --> 0:01:39.120 modest home with her father, two brothers, and two of 0:01:39.120 --> 0:01:43.160 her kids, had nowhere else to be. Although the coronavirus 0:01:43.200 --> 0:01:46.880 is widespread across Brazil's northeast, she wasn't wearing a mask, 0:01:47.640 --> 0:01:50.240 nor was any one else in her crowded neighborhood, where 0:01:50.280 --> 0:01:53.320 basic services have been so neglected that many residents have 0:01:53.440 --> 0:01:58.160 no access to clean water. Castro's brother, Moises, a garbage collector, 0:01:58.440 --> 0:02:01.120 was the first in her family to get Then her 0:02:01.160 --> 0:02:05.200 other brother and Luciano did too, followed by their father, Francisco, 0:02:05.320 --> 0:02:09.280 who has diabetes. He suffered badly struggling to breathe and 0:02:09.360 --> 0:02:12.880 running a soaring fever. But no one in Castro's household 0:02:12.880 --> 0:02:15.359 went to the hospital, a place that some in su 0:02:15.440 --> 0:02:19.800 Luis believe makes patients sicker or worse. That would be 0:02:19.840 --> 0:02:24.000 a death sentence, she said. As Asia, Western Europe, and 0:02:24.040 --> 0:02:26.440 parts of the US emerged from what will hopefully be 0:02:26.480 --> 0:02:29.680 the worst of the pandemic, the virus in Brazil isn't 0:02:29.680 --> 0:02:33.360 slowing down. Between late May and mid June, the country 0:02:33.400 --> 0:02:37.160 galloped past Spain, Italy and the UK in total fatalities, 0:02:37.520 --> 0:02:40.919 which now exceed fifty one, the second highest toll after 0:02:40.960 --> 0:02:44.440 that of the US. It's second in overall cases too, 0:02:44.800 --> 0:02:49.440 with more than one million confirmed infections, with local officials 0:02:49.520 --> 0:02:54.440 now lifting quarantines despite continued growth in cases, It's conceivable 0:02:54.480 --> 0:02:58.160 that when COVID nineteen finally recedes, Brazil will have been 0:02:58.240 --> 0:03:02.560 hit harder than any other tree. The reasons Brazil has 0:03:02.600 --> 0:03:05.600 made such a perfect host for the coronavirus are diverse 0:03:06.000 --> 0:03:09.400 and not yet fully understood. Like the US, it never 0:03:09.480 --> 0:03:13.400 issued nationwide rules for social distancing, even if the government 0:03:13.440 --> 0:03:16.000 had wanted to, the rules would have been impossible to 0:03:16.080 --> 0:03:19.440 enforce in a country of two million where some states 0:03:19.440 --> 0:03:22.760 are larger in land area than France. That left local 0:03:22.760 --> 0:03:25.840 officials to do as they saw fit, issuing orders that 0:03:25.960 --> 0:03:30.760 varied widely and sometimes contradicted one another. Poverty is certainly 0:03:30.800 --> 0:03:34.040 also part of the picture, and the densely packed favelas 0:03:34.080 --> 0:03:38.400 threaded through Brazilian cities. Social distancing isn't feasible, and not 0:03:38.560 --> 0:03:42.240 working means not eating, especially with the cash strapped state 0:03:42.360 --> 0:03:45.760 unable to provide enough support. So is the dysfunction of 0:03:45.800 --> 0:03:50.560 the government. Overcrowding in public hospitals is a long standing problem, 0:03:50.600 --> 0:03:52.840 as is graft among the people who are supposed to 0:03:52.880 --> 0:03:57.480 build new ones. And then there's President Gayre Bosonaro, a 0:03:57.600 --> 0:04:00.160 right wing populist who came to power with the teen 0:04:00.240 --> 0:04:03.800 campaign that echoed Donald Trump's pledges to drain the swamp. 0:04:04.480 --> 0:04:08.400 Since the coronavirus appeared in Brazil in late February, Bolsonaro 0:04:08.520 --> 0:04:12.520 has frequently obstructed efforts to contain it, demanding local officials 0:04:12.560 --> 0:04:16.760 abandoned severe tactics like shuttering businesses, firing a health minister 0:04:16.800 --> 0:04:19.560 who pushed for a more aggressive response, and at one 0:04:19.600 --> 0:04:23.839 point limiting the disclosure of epidemiological data, saying that without 0:04:23.839 --> 0:04:26.320 the numbers there would no longer be a story on 0:04:26.400 --> 0:04:30.240 the evening News. The Supreme Court ordered the government to 0:04:30.279 --> 0:04:33.680 resume releasing the figures. While in the early weeks of 0:04:33.720 --> 0:04:37.160 the outbreak, Bolsonaro's intransigence resembled what was happening in the 0:04:37.200 --> 0:04:40.839 White House, even Trump grudgingly conceded the severity of the 0:04:40.880 --> 0:04:45.080 situation once the body count started to soar. Bolsonaro, meanwhile, 0:04:45.200 --> 0:04:49.440 has doubled down, insisting that the antimalarial drug chloroquine is 0:04:49.440 --> 0:04:52.599 an effective treatment and claiming the number of cases is 0:04:52.640 --> 0:04:57.279 being exaggerated. Bolsonaro's office did not respond to requests for 0:04:57.440 --> 0:05:00.920 comment on this story. In a written risk bonds to questions, 0:05:01.240 --> 0:05:04.800 Brazil's health ministry said it's acted aggressively to test patients 0:05:04.800 --> 0:05:08.480 and add intensive care beds, protective gear, and ventilators across 0:05:08.520 --> 0:05:11.800 the country, spending more than eleven billion rays or two 0:05:11.839 --> 0:05:15.920 point one billion dollars so far. Most local and state 0:05:16.000 --> 0:05:20.440 leaders have ignored Bolsonnaro's push to end lockdowns. Brazil has 0:05:20.480 --> 0:05:24.200 a federal system and governors have wide powers over public health, 0:05:24.839 --> 0:05:28.720 but his continued dismissal of the pandemic seriousness has undermined 0:05:28.800 --> 0:05:32.560 distancing measures, while mismanagement and corruption at all levels of 0:05:32.600 --> 0:05:35.440 government have prevented help from getting to where it's needed. 0:05:36.480 --> 0:05:41.280 The consequences are severe. In Parah, a vast and underdeveloped 0:05:41.320 --> 0:05:44.880 state that neighbors Marino, COVID nineteen has been killing about 0:05:44.960 --> 0:05:48.080 fifty out of every one hundred thousand citizens, more than 0:05:48.160 --> 0:05:51.400 double the national average. I saw people getting to the 0:05:51.440 --> 0:05:54.760 hospital with family members already dead in the passenger seat. 0:05:55.320 --> 0:05:58.760 People given CPR on the sidewalks because the hospitals are full, 0:05:59.240 --> 0:06:03.880 says Alberto Beltrame, the state health secretary. One day in April, 0:06:04.040 --> 0:06:08.040 he visited the morgue in the capital. There were twenty 0:06:08.080 --> 0:06:11.839 bodies scattered everywhere. It's something you'd see in a war. 0:06:12.839 --> 0:06:16.080 As the virus continues to spread, Brazil may be turning 0:06:16.120 --> 0:06:20.000 into the true worst case scenario, a laboratory for what 0:06:20.160 --> 0:06:23.880 happens when a deadly and little understood pathogen spreads without 0:06:23.960 --> 0:06:31.000 much restriction. Unlike past plagues, the coronavirus has spread in 0:06:31.040 --> 0:06:34.640 substantial part from the rich to the poor, with prosperous 0:06:34.640 --> 0:06:38.640 and well connected global cities Milan, London, New York among 0:06:38.720 --> 0:06:43.120 the earliest hotspots outside China. The story in Brazil was similar. 0:06:43.520 --> 0:06:47.359 The first clusters emerged in Salt Paulo, Brazil's financial capital, 0:06:47.600 --> 0:06:51.640 in early March, as wealthy residents returned from overseas trips. 0:06:52.600 --> 0:06:55.479 One of the first so called super spreader events was 0:06:55.520 --> 0:06:58.120 the wedding of a social media star, held at a 0:06:58.160 --> 0:07:01.880 beach side resort in Bahia State in March seven. Twenty 0:07:01.920 --> 0:07:05.320 seven year old sal Polo lawyer named Pedro Pacifico, an 0:07:05.320 --> 0:07:09.159 Instagram personality himself with hundreds of thousands of followers for 0:07:09.200 --> 0:07:13.040 a feed devoted mainly to literary recommendations, was one of 0:07:13.040 --> 0:07:16.320 the guests. He felt lousy when he got home, but 0:07:16.440 --> 0:07:20.080 figured he had an exceptionally bad hangover. When he found 0:07:20.080 --> 0:07:22.640 out that another guest had been diagnosed with COVID nineteen, 0:07:23.080 --> 0:07:26.960 Pacifico went for a test. He had it too, as 0:07:27.000 --> 0:07:30.680 he gradually learned, did about fifteen of his friends. But 0:07:30.760 --> 0:07:33.840 at that point, Pacifico says over a video call, the 0:07:33.880 --> 0:07:36.880 disease seemed more like a nuisance than a threat. He 0:07:37.040 --> 0:07:41.080 isolated at home, suggesting quarantine, reading to his followers, and 0:07:41.080 --> 0:07:44.920 trading virus stories with other well off Palistano's It was 0:07:44.960 --> 0:07:47.880 the novelty of it, Pacifico says. No one saw it 0:07:47.960 --> 0:07:51.080 coming or thought it would be so bad. On the 0:07:51.120 --> 0:07:55.280 weekend of the Bahia wedding, Bolsonaro was in Florida visiting 0:07:55.320 --> 0:07:58.680 Trump at Mara Lago in Palm Beach. The two leaders 0:07:58.800 --> 0:08:03.000 entourages took no real precautions, shaking hands and hugging as usual. 0:08:03.720 --> 0:08:06.600 The first person to test positive after returning home was 0:08:06.680 --> 0:08:11.760 Fabio wine Garden, Bilsonnaro's communications chief. As everyone who deals 0:08:11.760 --> 0:08:15.160 with him knows, Winegarden is what Jerry Seinfeld would call 0:08:15.200 --> 0:08:18.080 a close talker with a habit of leaning in when 0:08:18.080 --> 0:08:21.160 he speaks. Five of the eight people who sat at 0:08:21.160 --> 0:08:24.880 his table at amar A Lago dinner tested positive. In all, 0:08:25.080 --> 0:08:29.040 thirty people on the trip got sick. One was Alexander Fernandez, 0:08:29.320 --> 0:08:31.920 an athletic forty four year old who's developing a grain 0:08:32.000 --> 0:08:35.920 export terminal in southern Brazil. After four days isolating in 0:08:36.000 --> 0:08:38.920 his apartment, Fernandez was so weak he couldn't walk to 0:08:38.920 --> 0:08:41.559 the bathroom. He went to the hospital, where he was 0:08:41.600 --> 0:08:45.000 placed in intensive care. I couldn't pull the covers up 0:08:45.040 --> 0:08:48.240 in bed, he says. At one point doctors thought he 0:08:48.240 --> 0:08:50.760 wouldn't make it. The nurse had to help me hold 0:08:50.760 --> 0:08:53.040 the phone so I could face time with my daughters 0:08:53.120 --> 0:08:56.440 to say goodbye. Even as the virus spread through his 0:08:56.480 --> 0:09:01.320 inner circle, the president was sending contradictory signals. On March twelfth, 0:09:01.320 --> 0:09:04.120 he asked supporters to call off planned rallies to support 0:09:04.120 --> 0:09:07.360 his government, but then turned up at one in Brasilia anyway, 0:09:07.840 --> 0:09:11.800 unmasked and fist bumping with attendees. Later that month, he 0:09:11.920 --> 0:09:15.400 urged state governors to curb their quarantines and claimed that 0:09:15.480 --> 0:09:18.640 even though he sixty five, as a former athlete, he 0:09:18.720 --> 0:09:22.120 had nothing to fear from COVID nineteen. The virus is here, 0:09:22.240 --> 0:09:25.880 he said, after walking around visiting shops one Sunday. We're 0:09:25.880 --> 0:09:28.040 going to have to face it, but face it like 0:09:28.080 --> 0:09:32.960 a fucking man. Still, in those early weeks, Brazilians took 0:09:33.000 --> 0:09:35.680 heart in the actions of the Health Minister, a fifty 0:09:35.679 --> 0:09:39.560 five year old doctor named Louise Henrique Mendetta. He spoke 0:09:39.600 --> 0:09:42.800 calmly to the press almost daily, presenting the latest data 0:09:42.880 --> 0:09:46.800 and pushing lawmakers to buy ventilators and face masks. Mandetta 0:09:46.880 --> 0:09:50.000 acknowledged that the virus was a severe threat that could 0:09:50.000 --> 0:09:53.960 be contained only through distancing measures and intensive preparation. He 0:09:54.040 --> 0:09:57.439 also said that counting on unproven treatments such as chloroquine 0:09:57.840 --> 0:10:00.360 being heavily promoted at the time by bolson Arrow and 0:10:00.400 --> 0:10:04.959 his supporters, mimicking a similar campaign by Trump was counterproductive 0:10:05.200 --> 0:10:08.720 or even dangerous. During a visit to the side of 0:10:08.720 --> 0:10:12.720 a temporary hospital near Brazilia in mid April, Mandetta stood 0:10:12.720 --> 0:10:15.079 to one side as the president walked into a dense 0:10:15.080 --> 0:10:17.920 crowd of fans, some of them climbing over each other 0:10:17.920 --> 0:10:20.240 to get a better look. One woman asked him to 0:10:20.280 --> 0:10:24.600 autograph her soccer jersey. After Bolsonaro obliged, she leaned in 0:10:24.679 --> 0:10:27.960 and kissed his hand. In a TV interview the next day, 0:10:28.200 --> 0:10:31.160 Mandetta said it was clearly a mistake that people were 0:10:31.200 --> 0:10:34.840 going into bakeries and markets and putting themselves in crowded situations. 0:10:35.480 --> 0:10:38.960 He didn't name Bolsonaro, but he didn't have to. A 0:10:39.000 --> 0:10:44.240 few days later, he was fired. Mandetta's replacement, an oncologist 0:10:44.360 --> 0:10:48.079 named Nelson Tyke, quit after less than a month. He 0:10:48.120 --> 0:10:51.160 was replaced by a general. Bolsonaro is a former army 0:10:51.200 --> 0:10:54.640 officer and has named soldiers to several top posts with 0:10:54.720 --> 0:10:59.480 no medical experience. With the national caseload nearing three hundred thousand, 0:10:59.760 --> 0:11:02.600 the industry issued guidelines allowing doctors in the public Health 0:11:02.640 --> 0:11:06.760 system to prescribe chloroquine and its sister drug, hydroxy chloroquine 0:11:07.080 --> 0:11:11.720 for even mild COVID nineteen cases. In its written response, 0:11:11.800 --> 0:11:15.200 the ministry said that it's following bioethical principles by making 0:11:15.240 --> 0:11:17.920 them available and that Brazilians treated with the drugs have 0:11:18.000 --> 0:11:22.080 had good results. Towards the end of May, Bolsonaro shared 0:11:22.120 --> 0:11:25.880 some good news the US would be sending two million doses. 0:11:29.040 --> 0:11:32.480 The eve of Brazil's Valentine's Day in mid June is 0:11:32.520 --> 0:11:34.160 one of the busier nights of the year. At the 0:11:34.240 --> 0:11:38.480 Villa Roma pizzeria and Salt Bolo's upscale Jardine's district. In 0:11:38.520 --> 0:11:41.839 twenty nineteen, tables were booked solid a month in advance, 0:11:42.440 --> 0:11:45.880 but this year, owner Gabriel Pinero was standing alone, wearing 0:11:45.920 --> 0:11:49.400 a black face mask behind the wooden bar, greeting deliverymen 0:11:49.440 --> 0:11:51.480 who came in one at a time and ventured no 0:11:51.559 --> 0:11:54.800 more than ten steps into the restaurant. He'd put out 0:11:54.800 --> 0:11:57.800 a bottle of sanitizer next to a little sign instructing 0:11:57.840 --> 0:12:00.400 them to clean their bags before putting orders in side. 0:12:01.000 --> 0:12:03.840 The two story window at the back, normally lit to 0:12:03.840 --> 0:12:07.320 reveal the lush plant life beyond was dark, while the 0:12:07.360 --> 0:12:10.240 second floor was filled with stacks of pizza boxes and 0:12:10.360 --> 0:12:13.280 new simplified menus that are easier to clean than the 0:12:13.280 --> 0:12:16.880 thick booklets they replaced. Running a restaurant at this time 0:12:16.920 --> 0:12:20.000 of year is usually such a good feeling, Pinero said, 0:12:20.679 --> 0:12:24.560 Now it's depressing. Villa Roma has been closed to dine 0:12:24.600 --> 0:12:28.600 in customers since mid March, when Salpolo Governor Joao Doria 0:12:28.960 --> 0:12:31.960 defied Bolsonnaro to impose what became a more than two 0:12:31.960 --> 0:12:36.760 month lockdown. Though it was only loosely enforced. Delivery business 0:12:36.760 --> 0:12:39.920 announced by computer beaps that prompted Pinero and his manager 0:12:40.000 --> 0:12:43.160 Carolina to shout orders into the kitchen, has helped the 0:12:43.240 --> 0:12:47.360 restaurants stay afloat, if barely. Sales have plunged to about 0:12:47.440 --> 0:12:51.240 twenty at the pre shutdown level, and of thirty employees, 0:12:51.280 --> 0:12:54.760 only ten are still at work. Desperate to cut costs, 0:12:54.960 --> 0:12:58.920 Piniero renegotiated his rent, asked suppliers for more time to 0:12:58.920 --> 0:13:02.120 settle bills, and took on tasks like buying goods and 0:13:02.200 --> 0:13:06.760 handling payroll himself. We're about breaking even, but it's very tough, 0:13:06.880 --> 0:13:09.880 he said. More and more restaurants are closing and the 0:13:09.920 --> 0:13:15.400 state is not doing anything. Pinero is relatively lucky. Nationally, 0:13:15.520 --> 0:13:18.040 restaurants and bars had fired more than one point two 0:13:18.080 --> 0:13:22.440 million workers by early June, according to Industry Association A Brazil. 0:13:23.160 --> 0:13:27.720 The organization's president in San Paulo, Percival Maracato, says that 0:13:27.760 --> 0:13:30.839 while about eighty percent of owners tried to get financing 0:13:30.880 --> 0:13:34.920 to tie them over, the vast majority were unsuccessful. Banks 0:13:34.920 --> 0:13:38.800 are supposed to be providing plenty of cash. Vulsonaro's government 0:13:38.840 --> 0:13:42.200 recently slashed reserve requirements to give them more room to lend, 0:13:42.679 --> 0:13:46.800 but bureaucracy, demands for collateral and high rates have prevented 0:13:46.800 --> 0:13:50.480 companies from getting it. Many restaurateurs have simply run out 0:13:50.480 --> 0:13:54.319 of money. Unlike in the US and Europe, the Brazilian 0:13:54.360 --> 0:13:56.920 government hasn't been able to provide much direct help to 0:13:56.960 --> 0:14:01.200 companies or individuals. Public finances were in severe trouble even 0:14:01.200 --> 0:14:05.199 before the pandemic, the result of decades of overspending by 0:14:05.280 --> 0:14:09.120 politicians of all ideological stripes and the lingering effects of 0:14:09.120 --> 0:14:14.240 a severe recession in twenty The number of public employees 0:14:14.280 --> 0:14:17.400 has more than doubled in the past three decades. Summer 0:14:17.400 --> 0:14:19.840 paid almost twice as much as equivalent staff in the 0:14:19.880 --> 0:14:24.840 private sector and receive outsize retirement packages. Though Bolsonaro succeeded 0:14:24.880 --> 0:14:28.760 in passing a controversial pension reform last year, that kind 0:14:28.800 --> 0:14:32.040 of spending doesn't leave much for essential needs, such as healthcare. 0:14:33.320 --> 0:14:36.800 The centerpiece of Bolsonaro's economic response is a six hundred 0:14:36.840 --> 0:14:40.680 real monthly stipend for Brazil's huge number of informal workers, 0:14:41.120 --> 0:14:43.560 accounting for the bulk of the roughly four hundred billion 0:14:43.600 --> 0:14:47.680 really spent on emergency support so far. The government has 0:14:47.720 --> 0:14:50.920 also used an insurance fund to pay furload employees and 0:14:50.960 --> 0:14:55.560 provided emergency loans to states. The stipend, recently extended to 0:14:55.640 --> 0:14:58.640 run for five months, drew praise, but at a little 0:14:58.680 --> 0:15:00.920 more than half the minimum way age, it's not enough 0:15:00.960 --> 0:15:04.480 for many citizens to get by on, especially in big cities. 0:15:05.080 --> 0:15:08.760 Disbursements have also been delayed by problems including crashing computer 0:15:08.800 --> 0:15:13.440 systems and a shortage of bills for cash payouts. Bulsonaro 0:15:13.560 --> 0:15:16.440 has argued in speeches and on social media that with 0:15:16.600 --> 0:15:20.080 millions of Brazilians living hand to mouth, a prolonged recession 0:15:20.080 --> 0:15:23.000 will be deadlier than the virus, and the only solution 0:15:23.160 --> 0:15:26.560 is to swiftly restart the economy. That's not really in 0:15:26.720 --> 0:15:29.760 his power, but his pronouncements still have a significant effect 0:15:29.800 --> 0:15:33.680 on people's willingness to endure and comply with ongoing restrictions. 0:15:34.560 --> 0:15:36.800 You have about thirty percent of the people who still 0:15:36.800 --> 0:15:40.160 support him and are influenced by his decisions, says Doria, 0:15:40.320 --> 0:15:44.480 The Salpollo governor, once allies, he and Bulsonaro are now 0:15:44.520 --> 0:15:47.480 at odds, in part because of the president's criticism of 0:15:47.520 --> 0:15:50.040 his decision to lock down the state, which has more 0:15:50.080 --> 0:15:53.320 than forty five million people. If he doesn't wear a mask, 0:15:53.440 --> 0:15:57.280 why should they, Doria asks. His insistence on opening the 0:15:57.280 --> 0:16:01.400 economy is another layer of pressure. How Paulo began lifting 0:16:01.400 --> 0:16:04.960 its restrictions on June one, gradually allowing retailers and other 0:16:05.000 --> 0:16:08.920 businesses to reopen, though restaurants and parks are still off limits. 0:16:09.480 --> 0:16:12.360 Health experts are concerned that even in the first place 0:16:12.360 --> 0:16:15.920 in Brazil to experience a COVID nineteen outbreak, it's too soon. 0:16:16.680 --> 0:16:19.640 The number of people in intensive care has declined, but 0:16:19.800 --> 0:16:23.720 cases and deaths keep growing, particularly in rural areas that 0:16:23.720 --> 0:16:27.440 were spared early on. Reopening now is a gross mistake, 0:16:27.760 --> 0:16:31.680 says Pedro Halal the dean of the Federal University of Pelotas, 0:16:31.720 --> 0:16:34.600 who coordinated a large scale study of how many Brazilians 0:16:34.600 --> 0:16:38.000 have been exposed to the virus. It estimated that half 0:16:38.040 --> 0:16:41.480 a million people in Rio de Janeiro have antibodies, ten 0:16:41.600 --> 0:16:44.440 times the number of official cases, and that rates in 0:16:44.480 --> 0:16:48.040 some northeastern cities are much higher. It's like we're saying, 0:16:48.360 --> 0:16:50.720 let's go out and see just how bad the virus 0:16:50.760 --> 0:16:56.000 can get. In the working class district of Nova u 0:16:56.120 --> 0:16:59.320 s who forty minutes by car from Rio's glittering beaches, 0:16:59.760 --> 0:17:02.120 there is a construction site just down the road from 0:17:02.160 --> 0:17:06.280 an evangelical church, between a soccer academy and an aviation school. 0:17:06.960 --> 0:17:09.320 The building was supposed to be a temporary hospital for 0:17:09.400 --> 0:17:12.560 COVID nineteen patients, and the state government had announced its 0:17:12.600 --> 0:17:16.280 opening in May, but a reporter for Bloomberg Business Week 0:17:16.320 --> 0:17:19.720 who visited in June found it far from finished, with 0:17:19.760 --> 0:17:24.080 no obvious signs of ongoing construction, let alone patients. That 0:17:24.119 --> 0:17:26.960 hadn't stopped someone from papering a concrete wall at the 0:17:27.040 --> 0:17:29.920 edge of the site with posters touting the government's pandemic 0:17:29.960 --> 0:17:33.439 response efforts. It wasn't ready when we needed it most, 0:17:33.640 --> 0:17:36.879 said Aria Almeida, a middle aged woman who was standing 0:17:36.880 --> 0:17:39.880 in the shade nearby. The facilities seemed to have made 0:17:39.880 --> 0:17:43.040 little impression on the locals. A teenage boy who was 0:17:43.040 --> 0:17:45.600 selling oranges on a street corner had never heard of it. 0:17:46.160 --> 0:17:48.640 Waiting in line at an auto parts store, a man 0:17:48.720 --> 0:17:51.679 named Fabio Corvalio took it as a given that funds 0:17:51.680 --> 0:17:54.920 for the hospital had been misappropriated. The money has gone 0:17:54.920 --> 0:17:58.600 all over the place, he said. The story in Novaya 0:17:58.720 --> 0:18:01.760 Su has played out in cities across the country, with 0:18:01.840 --> 0:18:06.879 promised temporary hospitals sitting unfinished or unequipped months into the pandemic. 0:18:07.440 --> 0:18:09.399 The challenges and getting them up and running are a 0:18:09.400 --> 0:18:13.040 reminder that of all Brazil's handicaps and fighting COVID nineteen, 0:18:13.480 --> 0:18:17.520 corruption and the state's related failures in delivering essential projects 0:18:17.880 --> 0:18:21.440 might be the most disheartening. Brazil has a rich history 0:18:21.440 --> 0:18:25.600 of graft, ranging from palm greasing to outright theft. Luis 0:18:25.720 --> 0:18:28.840 Nacio Lula da Silva, who served as president from two 0:18:28.840 --> 0:18:33.040 thousand three to was jailed on charges stemming from Operation 0:18:33.119 --> 0:18:36.880 car Wash, a sprawling investigation into bribery involving the state 0:18:36.880 --> 0:18:41.760 oil company Petrobras Bolsonnaro, who pledged to clean up scandals 0:18:41.760 --> 0:18:45.800 associated with Lula and his successor, Dilmarussef, has been embroiled 0:18:45.800 --> 0:18:48.720 in allegations that he tried to prevent federal police from 0:18:48.720 --> 0:18:53.679 investigating his family. Both the current and former president deny wrongdoing. 0:18:55.160 --> 0:18:59.320 Not surprisingly, Brazil's sudden need for more masks, gowns, ventilators, 0:18:59.320 --> 0:19:03.639 and hospitals, already complicated by global rush for the same equipment, 0:19:04.040 --> 0:19:07.040 wasn't wasted by bureaucrats and politicians looking to make some 0:19:07.119 --> 0:19:11.200 extra cash. Police in several states are investigating the suspected 0:19:11.240 --> 0:19:15.040 misuse of funds, over payments for supplies that never arrived, 0:19:15.440 --> 0:19:19.920 and contract padding for politically connected business people. Health officials 0:19:19.920 --> 0:19:22.480 in the states of Para and Rio de Janeiro have 0:19:22.600 --> 0:19:26.000 been fired, while lawmakers in the Ladder are trying to 0:19:26.040 --> 0:19:30.000 oust Governor Wilson Whitzell over suspicions he used hospital contracts 0:19:30.000 --> 0:19:33.880 to line his pockets. Witzel says the allegations are politically 0:19:33.880 --> 0:19:38.520 motivated and he did nothing wrong. Brazil has nowhere near 0:19:38.560 --> 0:19:41.440 the medical resources to handle a second wave of cases, 0:19:41.920 --> 0:19:45.200 let alone the first, which is still expanding, spreading along 0:19:45.280 --> 0:19:48.720 bus routes and waterways deep into the interior. To make 0:19:48.760 --> 0:19:52.280 matters worse, July, August, and September are winter months in 0:19:52.320 --> 0:19:56.879 the southern Hemisphere, potentially bringing an even faster uptick in infections. 0:19:57.560 --> 0:20:01.679 Researchers at the Pontifical Catholic University Rio de Janeiro estimate 0:20:01.720 --> 0:20:04.199 cases could reach one point four million before the end 0:20:04.240 --> 0:20:08.640 of June, bringing the death toll to almost sixty by 0:20:08.680 --> 0:20:11.840 mid July, says the University of Washington's Institute for Health 0:20:11.880 --> 0:20:15.560 Metrics and Evaluation. Brazil will overtake the US in per 0:20:15.600 --> 0:20:19.920 capita fatalities. We have many months still to go, says 0:20:20.000 --> 0:20:24.440 Julio Croda, an epidemiologist who previously worked in infectious disease 0:20:24.480 --> 0:20:28.119 surveillance at the Brazilian Health Ministry. What's sad to see 0:20:28.280 --> 0:20:33.520 is that the curve is still steepening. With Peter Millard 0:20:35.240 --> 0:20:37.440 and that's the story of how the pandemics worst case 0:20:37.440 --> 0:20:40.240 scenario is unfolding in Brazil, and check out that story 0:20:40.280 --> 0:20:43.000 and so much more in this week's magazine. It's on newsstands, 0:20:43.000 --> 0:20:46.360 it's online, and of course on the Bloomberg Terminal, including 0:20:46.720 --> 0:20:50.560 my partner's cover story on Lebron James Business off the Court. 0:20:50.600 --> 0:20:53.160 I'm Carol Masser and I'm Jason Kelly. Joined us every 0:20:53.240 --> 0:20:55.680 day on the radio two pm to six pm Wall 0:20:55.720 --> 0:20:59.080 Street Time. Also check out our podcast for any of 0:20:59.080 --> 0:21:01.879 the interviews you missed. This is Bloomberg.