Brazil mulls actions to shield air travel industry

Leonardo Goy and Alonso Soto – Reuters, 05/31/2012

(Reuters) – Brazil is considering measures to shield its air travel industry from global markets turmoil even as domestic demand for trips remains strong in Latin America’s most populated nation, Civil Aviation Minister Wagner Bittencourt said on Wednesday.

Demand for domestic flights will likely grow between 8 percent to 10 percent this year, outpacing the local economy, but below the 17 percent expansion seen last year.

“It is a very volatile sector, a risky sector that could easily see instability in the viability of the business during a period of crisis or when volatility hits the exchange rate and oil prices,” Bittencourt told the Reuters Latin America Investment Summit on Wednesday.

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Brazil primary budget surplus in April drops from year ago

Raymond Collitt – Bloomberg, 05/31/2012

Brazil’s April budget surplus before interest payments fell from a year earlier, as the central government saved less amid a faltering economic recovery.

Federal and local governments, including state companies, had a primary surplus in April of 14.2 billion reais ($7 billion), down from 18.1 billion reais a year earlier, the central bank said today in a report distributed in Brasilia. Analysts expected a surplus of 16.3 billion reais, according to the median estimate of 14 economists surveyed by Bloomberg. The April number was up from 10.4 billion in March.

President Dilma Rousseff’s government targets a primary surplus of 139.8 billion reais this year, or 3.1 percent of gross domestic product. The government has cut taxes and boosted lending to the state development bank in an effort to spur an economy that is recovering more slowly than expected from last year’s third-quarter contraction, said central bank President Alexandre Tombini.

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Brazil’s political class jolted by claim that ex-leader pressed a high court judge

Simon Romero – The New York Times, 05/30/2012

RIO DE JANEIRO — Brazil’s political establishment is being shaken by a claim that Luiz Inácio Lula da Silva, the country’s most influential contemporary political leader, put pressure on a high court judge to delay a trial over a vote-buying scandal involving high-ranking members of the governing Workers Party.

Judge Gilmar Mendes has asserted that Mr. da Silva, 66, a former president who recently underwent treatment for throat cancer, asked him in April in Brasília, the capital, to postpone the trial, set for August. More than 30 politicians are implicated in the scandal referred to as the center of the trial, the “mensalão” or “big allowance”; the nickname refers to the monthly payments said to have been made to legislators during Mr. da Silva’s presidency.

The claim by Judge Mendes, made in an article over the weekend in the newsmagazine Veja, has opened a bitter feud between him and Mr. da Silva. The former president confirmed that the meeting in Brasília took place, but dismissed the judge’s assertion about asking for a delay as “untrue.” In a statement, he expressed his “indignation” with the judge, a member of the Supreme Federal Tribunal who was appointed in 2002 by Mr. da Silva’s predecessor.

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Brazil to boost defense to protect borders, resources

Jeferson Ribeiro and Paulo Prada – Reuters, 05/30/2012

(Reuters) – Brazilian Defense Minister Celso Amorim said on Wednesday the country’s growing need to protect its borders, the Amazon rainforest, and massive offshore oil discoveries would lead it to gradually increase defense spending by a quarter to reach roughly 2 percent of Brazil’s economy.

During an interview at the Reuters Latin America Investment Summit, Amorim said the country’s valuable food, water, and energy supplies could eventually make it the target of a “scramble for natural resources.” Given the country’s recent economic growth, he added, Brazil must spend more on preparedness and its ability to “react or dissuade any effort to invade our territory.”

Brazil has good relations with all 10 of its South American neighbors, and hasn’t been to war with any of them since the 19th century, so defense spending has historically been seen as a second-tier priority.

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Bombardier is back on track in Brazil

Gustavo Vieira – Maclean’s, 05/28/2012

The trade relationship between Canada and Brazil has long been rocky, due largely to an ugly dispute over government subsidies to their respective airplane manufacturers—Bombardier and Embraer—in the late 1990s. During a visit to São Paulo last year, Prime Minister Stephen Harper lamented the “barely $6 billion in business” between the countries in 2010, vowing to renew relations with the South American powerhouse.

Now, the company leading the rebuilding of that estranged relationship is none other than Bombardier. Last month, it opened a state-of-the-art monorail factory in São Paulo. As part of a $816-million contract for a new line of the city’s rapid transit system, Bombardier will build 53 of its INNOVIA Monorail 300 trains in the factory. Designed and tested in Kingston, Ont., the São Paulo monorail trains are a newer version of the ones running on Vancouver’s Canada Line.

At the opening of the plant, the president of Bombardier’s transportation arm, André Navarri, said the facility would be “the world centre of monorail production” for the firm. It may only be the start. Brazil plans to spend $25 billion on railroads and urban transportation in the next five years, including a high-speed train link between Rio de Janeiro and São Paulo. Bombardier, though, has so far said it will stay out of that project as local officials struggle with delays plaguing the bidding process.

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Stevedores strike at Brazil’s biggest port

Roberto Samora and Peter Murphy – Reuters, 05/30/2012

SAO PAULO, May 30 (Reuters) – Stevedores at Brazil’s largest port, Santos, went on strike on Wednesday, threatening delays to shipments of coffee, sugar and other commodities and manufactured goods, the port authority said.

A port spokesman could not immediately confirm the reason for the strike nor its planned duration but said it mostly affected container ships while loading of liquid cargoes was continuing as normal.

Senior representatives from the stevedores’ association were not immediately available for comment. They are expected to meet on Wednesday morning to discuss the stoppage, one shipping operator said.

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Where the jobs are: Brazil

Shasta Darlington – CNN Money, 05/30/2012

Sao Paulo (CNN) — Looking for a job? Try moving to Brazil.

Just ten years ago, Brazilian professionals were fleeing the country in search of better jobs and higher pay elsewhere. But these days, white-collar workers from around the globe are pouring into Brazil to find work.

In 2011, the number of legal foreign workers jumped 57% to 1.51 million, according to the Justice Ministry.

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Rio’s housing prices spell trouble in paradise

Fox Business/Associated Press, 05/30/2012

RIO DE JANEIRO –  Moving to Rio, I had visions of paradise, of a sprawling apartment with panoramic views over a palm-lined beach.

Instead, I found myself plunged into the inferno of one of the hottest real estate markets in the world.

Brazil’s burgeoning middle class is moving up in the world, into fancier high-rises. The discovery of vast oil deposits off the coast has flooded the city with renters carrying fistfuls of petrodollars. And property owners already are hiking rents in anticipation of Rio’s upcoming mega-events, the 2014 soccer World Cup and 2016 Olympics.

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Brazilian indigenous groups demand better healthcare

BBC, 05/30/2012

Groups of indigenous people in Brazil blocked roads and occupied government buildings to demand better healthcare for their communities.

Several ethnic groups staged a protest at the Health Ministry building in the capital, Brasilia, asking for a meeting with a senior official.

In a statement, the movement’s leaders called for better facilities and access to more doctors.

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Brazil readies 7th straight interest rate cut

Alonso Soto – Reuters, 05/30/2012

BRASILIA, May 30 (Reuters) – Brazil’s central bank will likely slash its benchmark interest rate on Wednesday to a record low of 8.50 percent from 9 percent, in what would be the seventh straight rate cut as policymakers race to shore up a sluggish economy.

Faced with a surprisingly sharp slowdown at home and a worsening global economic outlook, Brazil’s central bank has embarked on an aggressive easing cycle, lopping 350 basis points off its overnight lending rate since August.

Thirty-eight out of 41 economists surveyed by Reuters expect the bank to lower the so-called Selic rate by 50 basis points at the conclusion of a two-day monetary policy meeting later on Wednesday. Two economists bet on a deeper cut of 75 basis points, while one predicted a reduction of just 25 basis points.

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