At Brazil auto show, industry wonders if it can get any worse

October 29, 2014

Brad Haynes and Albert Alerigi – Reuters, 10/29/2014

Automakers in Brazil are facing the sharpest slowdown since 1999 and it could be a year or more before things turn the corner.

It is tough to find a sunny 2015 forecast at the Sao Paulo Auto Show this week, where companies accustomed to a market growing by double digits are now considering three straight years of declining sales.

“It looks like the market is in for a difficult time until 2016,” said Koji Kondo, Toyota Motor Corp’s (7203.T) chief executive in Brazil, citing labor costs, rising taxes and infrastructure bottlenecks as a persistent problem. “It’s hard for Brazil’s economic conditions to recover in the short term.”

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Brazilians close their eyes and hope for the best

October 29, 2014

Rogério Simões, CNN – 10/27/2014

Uncertainty normally comes with the new. This year’s Brazilian presidential elections, though, have been like no other. After Sunday’s polls gave President Dilma Rousseff, from the left-wing Worker’s Party (PT), another four-year term with a narrow margin of victory, Brazilians embarked on a guessing exercise about what her next government will look like.

On the surface it doesn’t seem a vote for change, but the President knows it should be. There were exuberant celebrations in the PT camp and frustration in the faces of supporters of the defeated centrist candidate, Aecio Neves, from PSDB. But no one could say for sure what the result means for the next four years.

Since massive street protests in June 2013 called for change in Brazilian politics and economy, that word has been around in almost every political statement — including Rousseff’s victory speech on Sunday night. As she addressed supporters in Brasilia, the President said she had not forgotten the message from the streets. “The most repeated word in these elections has been ‘change’. And I know that I have been re-elected to make the big changes the Brazilian society demands.”

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Brazil falls nine positions in ranking of gender equality [PORTUGUESE]

October 29, 2014

BBC Brasil, 10/28/2014

Brazil fell nine positions in gender equality rankings released by the “Global Economic Forum,” a group known for their meetings in Davos, Switzerland. The country now appears at 71st on the list, when it used to be 62nd.

The organization evaluated the differences between men and women in terms of health, education, economy, and political indicators in 142 countries. Iceland ranks first, followed by other Nordic countries.

Despite having kept equal health and education levels for both men and women, Brazil fell in the rankings that measure female participation in the economy and politics. The largest drop occurred in the evaluations that considered wages and female participation and leadership in the labor market.

Read more [in PORTUGUESE]…

Hopes for Rebound in Brazil Rest With Dilma Rousseff, Re-elected President

October 28, 2014

Dan Horch – The New York Times, 10/27/2014

Business leaders and market strategists are hoping that Brazil, one of the world’s largest economies, can regain its footing in the wake of the re-election of Dilma Rousseff as president.

After Ms. Rousseff’s victory, markets, as expected, swooned on Monday. Brazil’s currency, the real, fell 2.7 percent against the dollar, while the stock market fell 2.8 percent, largely in reaction to the election. For the year, the Brazilian markets have been stuck in a malaise, down 2 percent this year, after a slide of 15.5 percent in 2013.

Since Ms. Rousseff took office in January 2011, the stock market has fallen 27 percent. Taking the currency’s depreciation into account, the loss for a foreign investor, in dollar terms, has been nearly 50 percent.

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The Market Votes on Brazil

October 28, 2014

The Wall Street Journal, 10/27/2014

Brazilians had their democratic say on Sunday, voting narrowly to re-elect President Dilma Rousseff of the left-leaning Workers’ Party to another four-year term. On Monday the world voted on Brazil’s choice, and this time the result was a resounding no confidence.

Brazil’s currency, the real, fell almost 2% and was trading at about 2.52 against the dollar at the end of Monday, close to its lowest point in a decade. Brazil’s main stock market index was down 2.8% to its lowest close in six months. Those markets had rallied some in the last few weeks as challenger Aécio Neves had come close to Ms. Rousseff in the polls. So the Monday selloff was a case of investors pricing in the discount of continuing bad economic policy. A Brazil credit downgrade to “junk” status is likely on present trend.

Brazil is proof that democracy is no guarantee of prosperity. A country rich in resources and people has managed to squander both with an overweening state that buys votes via income redistribution and price controls on gasoline that force losses on producers. Those are Third World policy blunders in a country that fancies itself a First World aspirant. This explains Brazil’s consistent economic underperformance (0.5% growth this year, following 2.5% in 2013) and 6.75% inflation rate.

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Dilma Rousseff Prevails in Campaign Marred by Violence

October 28, 2014

Belén Marty – Pan AM Post, 10/28/2014

On Sunday evening, the Brazilian Superior Electoral Court officially declared President Dilma Rousseff the winner of a highly contested presidential election. Rousseff obtained 51.64 percent of the vote in the final runoff, defeating opposition leader Aécio Neves of the Brazilian Social Democracy Party. This means the Workers’ Party (PT) have secured their fourth consecutivevictory for Brazil’s highest office, and will remain in power until at least 2019.

As the campaign slogan “One, two, three, Dilma once again” rang throughout the PT headquarters in San Paulo, Rousseff took the stage on Sunday to celebrate her narrow victory. With a difference of just 3.4 million of votes, out of a total of 142.8 million people eligible to vote, Rousseff reaffirmed her commitment to dialogue and said she does not believe the election has divided the country.

“This president before you is open to dialogue, and this is the first promise I make in my second term,” said the president. Rousseff addressed concerns over the nation’s economy and promised the crowd of supporters in attendance to put the country back on track: “My friends, every election has to be seen as a peaceful and secure form of change for a country. Every election is a form of change, especially for us who live in one of the largest democracies in the world.”

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Reelected, Rousseff Promises She Will be “A Better President”

October 28, 2014

Paulo Sotero – Brazil Institute, 10/27/2014

A narrow victory after a divisive campaign leaves a weakened leader with few options to revive Brazil’s slowing economy

President Dilma Rousseff’s narrow reelection last Sunday gave her a political victory without a clear political mandate. A highly negative and bruising campaign marked by personal attacks and allegations of corruption exchanged between Rousseff and her challenger, senator Aécio Neves, left a divided and angered public wondering whether the government and the opposition, which includes the vast majority of the business community, will be able to reconcile their differences and work together to reignite a paralyzed economy and put Brazil back on a more promising path than it has been on in recent years.

Rousseff received 51.65% of the votes, or 54.5 million, against Neves’ 48.69%, or 51 million, in the narrowest victory by a candidate in the seven presidential elections Brazil has held since the 1980s. Her triumph became clear only after 80% of the votes were counted.

Speaking to supporters, she said she did not believe the elections had left the country divided and called for dialogue. “Sometimes in history, tighter election results produce stronger and faster changes than ample victories,” she said, expressing hope that this will be the case in Brazil. In her victory speech, Rousseff promised to be “a better president” in her second term and move aggressively to promote a political reform she first proposed but failed to advance after the massive street protests of June 2013. It is improbable, however, that the proposal will be welcomed in Congress, where Rousseff’s Workers’ Party has lost ground and will have to deal with stronger and more demanding partners in the PMDB.

Read more… 

Paulo Sotero is the director of the Brazil Institute at the Wilson Center.

Photo courtesy of Flickr user Rede Brasil Atual.


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