Each Friday, through the Brazil Portal feature “The Week in Review”, the Brazil Institute will highlight Brazil’s news topics in one concise summary.
News this week continued to revolve around Brazil’s continued measures to stimulate the economy. With a falling trade surplus and factory output on the decline, the government has been eager to recoup their losses, accelerate production, and encourage consumer spending. Cuts to steep oil taxes are being discussed to reinvigorate ethanol production, as well as tax cuts on common household goods aimed at increasing stagnating sales. Some of these stimulus measures have seen results; car sales have jumped markedly after a similar tax cut, although auto output itself has not rebounded. However, the results of similar stimuli, such as the monumental new agricultural loan program announced this week, have yet to be seen.
In hemispheric news, Brazil’s ties to its Latin American neighbors have been both tested and strengthened this week. On the one hand, regional tensions have been high since the expulsion of Paraguay from Mercosur after last week’s demi-coup/impeachment that ousted Fernando Lugo. Though Brazil was one of the many nations that criticized the impeachment proceedings and questioned their constitutionality, the country also stands to benefit. Given that the coup led to Paraguay’s removal from Mercosur, lawmakers in Asunción can no longer block Venezuela’s entrance into the trade union, a development which could potentially profit Brazil greatly. Outside of South America, Brazil and Mexico are strengthening their relationship, as Mexico’s newly elected President vowed to ally with the South American giant.
The case pitting Brazilian laborers against corporate giants BASF and Shell Oil has also seen some development this week. Investigations into workers’ claims that they were exposed to harmful pesticides are ongoing. The workers’ victory seemed ensured when a judge mandated that Shell and BASF put aside 328 million for their compensation, however this measure was blocked later in the week by a different judge.
July 1 marked the 18th anniversary of the Plano Real, the landmark fiscal legislation that introduced the real as Brazil’s currency. O Estado de S.Paulo interviewed Persio Arida, a former Wilson Center Public Policy Scholar and one of the men responsible for the plan’s design and implementation, about the plan’s success almost two decades later.