Reopening of commerce in the United States has caused a spike in new coronavirus cases, with local governments already reversing the decision. Unabated, Brazil’s major cities are following its example.
Investor interest is being prioritised over the health of the population. This Brazilian echo of the US Covid-19 response reflects the loss of Brazilian political decision making to foreign companies such as Boston Consulting Group, which is advising the São Paulo state government on the pandemic, despite having no known expertise.
After New York, São Paulo has the second highest number of confirmed coronavirus cases in the world. With a population of 44.04 million, the state currently has 302,000 confirmed cases, and 15,351 deaths. Estimated totals are far higher, and this undercount reflects not just lack of testing, but intentional hiding of data.
With 1.5 million confirmed cases and 62,045 deaths, Brazil has still to overcome the peak of its pandemic, and easing of lockdown measures look dangerously premature.
The city and state of São Paulo were the early Brazilian epicentres of Covid-19. They were also amongst the earliest to implement isolation and quarantine measures, under Governor João Doria and his former deputy, city mayor Bruno Covas. Both Doria and Covas belong to the neoliberal, traditionally US-favoured PSDB, which has controlled São Paulo state government for twenty years.
São Paulo’s pandemic response was initially seen as rational and well organised compared to that of the Bolsonaro regime in Brasilia. That wasn’t hard.
Yet something changed. On May 27, Covas announced that the Coronavirus R (reproduction) rate in the municipality was down to 1, and in turn Governor Doria and his secretary of economic development, Patrícia Ellen da Silva, announced the beginning of a plan to reopen the economy across the entire state, beginning on June 15, which saw shopping malls reopen, followed by the return of bars and restaurants, called “Plano São Paulo”.
Experts responded with dismay and warned it would bring a wave of new infections.
Our American friends
The decision was seen as a victory for two US firms which have been advising São Paulo on its pandemic strategy; Oliver Wyman; and Boston Consulting Group (BCG) – a member of Wall Street lobby and think-tank Council of the Americas (AS/COA). BCG’s president, Rich Lesser, is within Donald Trump’s Strategic and Policy Forum.
The reasoning behind the decision had obvious problems for those familiar with São Paulo’s pandemic: Control indicators depend on at least an honest statistical estimate of the number of confirmed cases, and the lack of mass testing in Brazil means there is no way to calculate the R rate reliably.
Writing in Exame, Sergio Praça cited an unnamed state government official concerned about the plans to reopen commerce, who complained the situation may worsen in the city of São Paulo if socioeconomic and neighbourhood differences are not considered: “Reproduction of the virus started with the upper class and is rapidly spreading among the poorest. By not considering transmission between classes, using a general R for the entire city, there is a danger of an explosion of cases” they warned.
In early May, Guilherme Benchimol, president and founder of the influential fund XP Investimentos, another Council of the Americas corporate member, claimed that Brazil was handling the pandemic well, and boasted that the peak among its upper classes had already passed.
“Following our numbers a little, I would say that Brazil is doing well. Our curves are not exponential yet, we have been able to flatten them. We will have a clearer picture in the next two to three weeks. The peak of the disease has passed when we analyze the middle class, upper middle class. The challenge is that Brazil is a country with a lot of communities a lot of favelas, which makes the whole process difficult”, Benchimol told newspaper O Estado de S. Paulo.
Benchimol’s remarks reflected a view that protecting Brazil’s poor from the disease was not a priority of business.
One month since it began, the reopening strategy implemented by the Doria government has hit setbacks as was feared, with many regions having to implement stricter isolation measures again. At the beginning, three regions were under maximum restriction. And even though the pandemic is still far from being controlled in São Paulo, the government decided to change their initial plan, and brought forward the reopening of gyms, theaters, cinemas and concert halls for municipalities that are in the “yellow phase”. In the first version of the so-called “Plano São Paulo”, these activities could only return in the final phase of flexibility, the blue phase.
On June 30, Journalist Kennedy Alencar wrote of the parallels with mistakes made in the United States being repeated in Brazil.
“What happens in the United States serves as a warning to Brazil, a country that had its quarantine openly boycotted by President Jair Bolsonaro and a good part of society, especially by sectors of the business community. Governed by Donald Trump and Jair Bolsonaro, two presidents who deny science and downplay the use of the mask in public, the U.S. and Brazil have the highest number of covid-19 cases and deaths worldwide. This is no coincidence, but the result of incompetent responses to the biggest health crisis in 100 years”
“Bolsonaro and irresponsible governors grotesquely copy the worst of the United States. They commit crimes against public health and deserve to be held criminally and politically responsible for it.” Alencar concluded.
Founded in 1963, The Boston Consulting Group Inc. is a global management-consulting firm which employs 21,000 people in over 50 countries, with yearly revenue of $8.5 billion dollars. It’s strategic think tank, the BCG Henderson Institute, has been focussed on economic impact since the early stages of the pandemic.
BCG’s São Paulo office opened in 1997.*
“Three sources consulted, from different departments, regarding BCG’s work claim that the consultancy had access to very detailed data about the state of São Paulo – known as “microdata”, to which no one outside the government has access.” wrote Sergio Praça in Exame.
The involvement of BCG in São Paulo’s planning mirrors a story emerging from India, of BCG’s mystery role in steering Health Ministry policy, despite having no visible expertise in disease control strategy.
Use of such consultants is seen as unprecedented in a pandemic.
Sujata Rao, former Union Health Secretary, told NDTV: “We have never ever allowed any foreign, or even Indian management consultancy firms to be there. We have always worked with the WHO (World Health Organisation). We have always requested organisations like the CDC (the US government’s Centre for Disease Control and Prevention) to come and help us. But neither in HIV-AIDS nor in any of the viral epidemics we have faced like H1N1, H5N1, or for that matter, the polio programme did we ever have any such arrangements where… consultancy firms like this would be working within the ministry’s control room,” she said.
A former executive director of the Indian government’s National Health Systems Resource Centre, T Sundararaman, voiced concern about using such consultancy groups and their client-driven research for public policy: “There are so many assumptions (in such models). So you know your business model wants more orders from the client, then you tend to look at those assumptions that are favourable,”
Chairman of BCG India, Janmejaya Sinha confirmed that there is a BCG team working in the Health Ministry: “We don’t claim we are epidemiologists. But we certainly know what crisis reforms should be. We work with companies, governments doing that. And some of these are things that require discipline, and actually good consulting skills,”
Boston Consulting Group has been advising US states on their reopening strategies. On 13th May it was announced that Connecticut Governor Ned Lamont had contracted BCG for $2 million for 8 weeks strategic guidance. 5 days later it was announced that the state would begin reopening immediately, similarly against the advice of public health experts at Yale. Fearing a second wave, the state has now finally paused its plans for the reopening of restaurants, bars and other commerce, and delayed school reopenings until the autumn.
In New York, it was McKinsey whom Governor Cuomo enlisted to draw up a so called “Trump proof” strategy, with echoes of the confrontation between Doria and Bolsonaro.
The São Paulo State Government’s Coronavirus crisis office is headed by Patricia Ellen da Silva, a former McKinsey consultant for 18 years. Da Silva was previously president of Optum Brazil, a pharmacy benefit manager and private healthcare services subsidiary of the United Health group. Although not employed by BCG, Da Silva is considered close to the company.
With daily televised briefings placing her in the spotlight, Da Silva was asked in a Marie Claire interview about opposition to reopening of economic activity from doctors on her team: “There was consensus, although there is never 100% agreement. There is no decision of this dimension that leaves us in a comfortable position. What I am learning about public management, especially at the moment we are living, is that it is necessary to seek consensus, yes, but to understand that there will never be a comfort zone.”
Harvard graduate Da Silva is already positioned as a possible candidate for the São Paulo Governorship in 2022 if João Doria decides to run for the Presidency. She, along with television personality Luciano Huck, co-founded Agora! – a movement for political renewal which, “proposes public policy guidelines for the principal and urgent challenges to improvement of Brazilians quality of life. We do this by consolidating diagnoses of the problems, dialoguing with experts and suggesting alternatives, always based on evidence, for priority areas.”
Agora! represents a shift toward the consultantization of Brazilian politics. Both it and Huck’s RenovaBR, which is bankrolled by billionaire Jorge Paulo Lemann, are components in an ongoing, internationally promoted effort to shape a future post-Bolsonaro political scenario, and prevent the return of Brazil’s left to government, by repackaging neoliberal policy as progressive, neutral, rational and evidence-based.
Such presentation is however at odds with São Paulo’s moves to end quarantine early, especially when contrasted with the case of neighbouring Argentina, which with a 44.49 million population similar to that of São Paulo, has so far suffered less than 70,000 cases, and 1400 total deaths, under strict quarantine measures implemented by the government of Alberto Fernandez – less than 10% of São Paulo’s current toll.
Chair of São Paulo state economic committee is Ana Carla Abrão, an Oliver Wyman consultant and long term advisor to Governor Doria. Emphasising how closely associated the corporate forces shaping Brazil’s pandemic response are, Abrão is married to Pérsio Arida, president of investment bank BTG Pactual, which was founded by Bolsonaro’s Finance Minister, Paulo Guedes.
Wall Street darling Guedes’ initial response to the pandemic was to claim that his ultraliberal economic reforms were the answer to the crisis, which Bolsonaro himself claimed was pure hysteria, as he came into confrontation with Governors such as Doria who contradicted his position.
It is notable that this open conflict between federal and state strategy appears to be all but over in São Paulo and Rio de Janeiro, with a push towards a loosening of already weak isolation measures winning the day.
Brazil is not without dissenting voices against this prioritising of investor interest over public health. North Eastern states continue to adopt strategies independent of federal government thinking, or lack thereof, led by the C4 group of scientists and Dr. Miguel Nicolelis and are resisting premature moves to end lockdowns.
For some time, the US business community was expressing frustration with quarantine measures in Brazil through its media. WSJ’s notorious pro-Bolsonaro editor Mary Anastasia O’Grady complained that lockdowns in the South American giant would cost lives through the contraction of economic activity, rather than help control the disease. Bloomberg has since referred to Brazil becoming a “laboratory” for what happens when the disease is allowed to spread effectively unhindered.
This comes as initially hopeful news of a vaccine being tested on the São Paulo population came with the caveat of no guarantee that Brazilians will recieve life-saving access to it.
As the economic centre and transport hub of Brazil’s south-east, the premature reopening of São Paulo could have grave consequences for the region, whilst US consulting firms behind the strategy are unlikely to ever be held accountable.
Boston Consulting Group were contacted by Brasil Wire for comment on this story, with a request for information about their workforce and role in pandemic planning in São Paulo and elsewhere in Brazil.
Update: Boston Consulting Group eventually responded on Monday 6 July:
“The Boston Consulting Group (BCG) clarifies that it carries out pro bono work for the Government of São Paulo. Due to internal confidentiality policies, BCG does not comment on the work carried out with its clients.”
Additional reporting by Nathália Urban.