Lula’s turn (again): some things change, some stay the same

Lula’s turn (again): some things change, some stay the same

Billionaire Richard Branson declines a debate on Singapore’s death penalty, the US sends nuclear-capable bombers to Australia, and Volkswagen complains of persistent semiconductor shortages

Hi there Intriguer. The very online among you might have caught Mariah Carey proclaiming the start of the holiday season yesterday. Nothing like an extra month of ‘All I Want for Christmas Is You’ royalties to beat inflationary pressures, eh Mariah? Some are even speculating that her gun-jumping announcement might actually be the proof climate activists have been waiting for.

Today’s briefing is a ~4.7 min read:

  • 🇧🇷 Lula’s turn (again): some things change, and some stay the same.
  • ➕ Plus: Billionaire Richard Branson declines a debate on Singapore’s death penalty, the US sends nuclear-capable bombers to Australia, and Volkswagen complains of persistent semiconductor shortages.

The remarkable political resurrection of Lula

In brief:

  • Former Brazilian President Luiz Inácio Lula da Silva has won a third term in office, narrowly beating incumbent Jair Bolsonaro.
  • Analysts predict that Lula’s victory will herald environmental and economic policy changes but is unlikely to impact Brazil’s foreign policy, including the country’s neutral position on the Russo-Ukraine War.

Lula da Silva (left) defeated Jair Bolsonaro in Sunday’s Brazilian election.

The comeback

Three years ago, Luiz Inácio Lula da Silva was sitting in prison on corruption charges. Today, only 17 months after those charges were annulled, the 77-year-old is the President-elect of Latin America’s largest economy.

  • The departing President Jair Bolsonaro now has the embarrassing title of being the first president since Brazil returned to democracy in 1985 not to win reelection.

The 1.8% margin of victory for Lula surprised many pollsters who again underestimated the conservative electorate’s strength and size. Still, a win’s a win, and credit to Lula’s team; they gave 110% out there, and they’ll be thrilled to come away with the presidency (sorry, we might have watched too much sport last weekend).

Four things we’re watching

1. 🌿 The environment

Bolsonaro believed that developing the Amazon was critical to Brazil’s growth, leading to surging deforestation rates. In contrast, Lula has promised to safeguard the rainforest, a position he reiterated in his first speech as president-elect:

“Let’s fight for zero deforestation. […] Brazil is ready to resume its leading role in the fight against the climate crisis, protecting all our biomes, especially the Amazon Forest.”

2. 💰 The economy 

Brazil experienced relatively high economic growth during Lula’s first term as President from 2003-2010. He’ll face steeper economic challenges this time around:

“There is a lack of trust [in] his party’s economic policies, considering the difficult scenario ahead for 2023. There will also be consequences of the recent fiscal excesses which will contribute to a deteriorating economy.” 

Zeina Latif, Chief Economist, Grupo XP

3. ⚔️ The Russo-Ukraine War 

Despite their many (many) differences, Lula and Bolsonaro share the same neutral approach to the Russo-Ukraine War, primarily because Brazil relies on Russia for fertiliser.

Latin American analyst Andre Pagliarini says the relationship between Brazil and Ukraine “will present a major early test of Lula’s new diplomacy.”

4. 🤝 Regional Relations 

Lula’s election may help Brazil rebuild relationships with allies who soured on Brazil during Bolsonaro’s tenure, especially other Latin American leftist leaders.

  • If the original President Lula offers any indications, Brazil under Lula 2.0 will maintain cordial but arm’s length relationships with Western partners (despite Western leaders’ overwhelming support for da Silva).

The Bolsonaro variable

Despite the tense atmosphere leading up to the vote, no major disruptions were noted, except for some reports of targeted police roadblocks in Lula-leaning areas.

President Bolsonaro took two full days before addressing the election results:

  • On the plus side, he ordered the government to begin transferring power to Lula.
  • On the downside, he hasn’t officially conceded the election, suggesting he’s trying to maintain his long-term political viability without publicly admitting he lost.

As Brian Winter, Editor-in-Chief at Americas Quarterly put it:

“Some people believed Bolsonaro would lose big, and he would go down in Brazilian history as a kind of aberration. That’s over now. He and his movement are here to stay.”


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Southeast Asia & the Pacific

🇦🇺 Australia

The US will send six B-52 bombers to Australia amid mounting tensions with China.

  • The bombers, which can carry both nuclear and conventional weapons, will be deployed as part of a task force that conducts military exercises with allies.
  • Senior Fellow for Indo-Pacific Security at the Carnegie Endowment, Ashley Townshend, says, There’s nothing new about B-52s deploying to Australia… [b]ut the strategic significance of this has been missed… [T]his is a new role for Australia and a big step up from simply hosting fly-in/out bombers”.

🇫🇯 Fiji

The Fijian government has announced it will hold its next general election on 14 December.

  • The upcoming elections will be a crucial test for Prime Minister Frank Bainimarama, who has governed the country since 2006.
  • Both Bainimarama and his main contender, Sitiveni Rabuka, instigated military coups in the past, but appear to be keeping things above board this time around.

🇮🇳 India

Last Friday, the Indian government announced it will establish grievance committees to oversee content moderation on social media platforms.

  • The new committees will have the power to overrule companies’ decisions, effectively giving the government authority over online content moderation.
  • Advocacy groups worry that the new regulation will curb free speech rather than enhance security online.

🇮🇩 Indonesia

Indonesia is looking to put blockchain technology to good use by building a digital carbon registry for Indonesia’s Stock Exchange’s 2025 emission trading system.

  • Emission trading is when companies buy and sell credits that allow the credit holder to emit greenhouse gases.
  • Using blockchain technology in such schemes would allow authorities to create a tamper-proof ledger of the creation and ownership of emission credits.

🇸🇬 Singapore

Virgin Group founder Richard Branson has turned down an invite from Singaporean authorities to participate in a televised debate on Singapore’s death penalty.

  • The British billionaire was contacted by Kasiviswanathan Shanmugam, Singapore’s Minister for Home Affairs, after he criticised Singapore’s use of the death penalty.
  • Singaporean law approves capital punishment for 33 offences, including drug trafficking.

We were promised jetpacks, now we can’t even get cars

The news: Volkswagen, Europe’s largest car manufacturer, downgraded its delivery targets last week because as many as 150,000 cars are unfinished due to a lack of parts.

  • Volkswagen chief executive Oliver Blume warned that “challenges to our supply chains will become the rule, not the exception.”

An industry-wide problem: Volvo, Ford, and Toyota also complained about semiconductor scarcity in their quarterly results last week, which means we’ll probably be talking about the Great Chip Shortage™ for a while longer.

  • With that said, Volkswagen does “anticipate that the supply of semiconductors will improve further in the fourth quarter.” 

Compounding the problem: Beyond the structural bottlenecks caused by the last two years of rolling binfires difficulties, geopolitical volatility is pushing increased protectionism in the tech industry.

  • Earlier this month, the US unveiled a set of new regulations to block the export of advanced chips to China to undermine its technological advancement.

Bad for business: While the Biden Administration insists the new export controls are necessary to enhance national security, business leaders aren’t too pleased:

“There are worrying geopolitical developments, particularly the rise of nationalism and protectionism. This includes growing barriers to technology transfer between the east and west.”

Volkswagen CEO Oliver Blume

👋 We’re excited to introduce a new section in which Intrigue co-founders John Fowler and Helen Zhang will answer your questions every Wednesday!

  • It’s a chance for us to have a more two-way interaction with you, our intimidatingly smart and experienced Intriguers.
  • All you have to do is tweet us or drop your question here and we’ll select one or two to answer each week. (PS: You can ask anything!)

So get asking, our inquisitive friends, and we’ll be back in this space next week with some answers!

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