Brazilians to elect a new president in an atypically sour mood

October 24, 2014

Paulo Sotero – The Brazil Institute, 10/24/2014

With their country’s economy at a standstill, Brazilians go back to the polls this Sunday in an atypically sour mood to decide whether to extend the mandate of President Dilma Rousseff for four more years or replace her with Senator Aécio Neves, a popular former governor of Minas Gerais, Brazil’s second richest state after São Paulo. Opinion polls released this week showed Rousseff gaining on Neves for the first time, who pulled a stunning turnaround to end in second place in the October 5th first round of vote, way ahead of once favorite candidate, environmentalist Marina Silva. Failures in first round opinion polls were made. However, the unusual volatility of the race even made analysts that seemed convinced of Rousseff’s reelection hedge their bets by avoiding making definitive predictions. One pollster who worked for campaigns of gubernatorial candidates of the president’s coalition told former president Luiz Inácio Lula da Silva at a rally held in the Southern capital of Porto Alegre on Wednesday that his analyses indicated Aécio Neves could win the race.

Three weeks of second round campaigning that ended Friday, October 24th, with a nationally televised debate between the two contenders did little to lighten the poisonous political atmosphere created in the race’s initial 40-days of highly negative electoral tactics used by all major candidates, but especially by Rousseff’s camp. Read the rest of this entry »


How to Fix Brazil’s Broken Economy

October 24, 2014

Joshua Kempf and Mark Kennedy – Foreign Policy, 10/23/2014

The last two decades made obvious a life’s-not-fair fact: Big countries can get away with bad economic policy. Size matters to investors, global corporations, and entrepreneurs because a winning payout is large and can justify the costs of bureaucracy, compliance, and corruption.

China, India, and Brazil attract big investor dollars not because they are business paradises — check out their World Bank’s “Doing Business” rankings. To understand how business leaders think, let’s imagine you built a company with 85 percent market share in more business friendly Estonia. Congrats, they’ll say, those size revenues are in a multinational’s second footnote once removed.

Which brings us to Brazil. Despite its numerical advantages, Brazil has stagnated, and is expected to have just 0.4 percent economic growth this year. What’s wrong? Many analysts have pointed out the obvious: Brazil needs to improve its education, healthcare, and infrastructure. Few economists would disagree, but these are deeply rooted problems with decades-long solutions. Brazilians go to the polls on Sunday to select a president. What reforms can be done during one term to unleash Brazil’s charmed bequest, its size? Here’s the policies we think should be on the agenda.

Read more…


Brazilians Are Shocked, Shocked at Corruption!

October 21, 2014

Antonio Prata – The New York Times, 10/21/2014

We Brazilians suffer from a curious cognitive dysfunction, which occurs with the same frequency in our population as lactose intolerance does among the Japanese, or the inclination for punning among the English. We have the ability to be outraged by corruption, while engaging in our own petty versions of it.

As the second round of presidential voting approaches on Sunday, this evil is spreading like an epidemic. In bars, on the streets and on social networks, advocates of Dilma Rousseff, the Workers Party candidate for re-election, and Senator Aécio Neves, of the Brazilian Social Democracy Party, never tire of reminding us of the “robberies” that their rivals commit.

Workers Party supporters cite the re-election scandal in which Social Democrats were accused of bribing congressmen to approve a constitutional amendment allowing Fernando Henrique Cardoso to compete again for the presidency in 1998. Social Democrats’ supporters mention the “Mensalão,” a case in which congressmen allied with the Workers Party regularly received money diverted from Luiz Inácio Lula da Silva’s illegal campaign contributions. Those not involved in the party squabbles tend to blame all the politicians, as if the politicians were a separate species, able to corrupt our reputable citizens.

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Brazil Fixated as ‘Human Bomb’ Revelations Rock Elections

October 21, 2014

Sabrina Valle and Juan Pablo Spinetto – Bloomberg Businessweek, 10/20/2014

When in April 2012 Paulo Roberto Costa was eased out of his job as the refinery chief for Brazil’s Petroleo Brasileiro SA (PETR4), the state-run oil giant, it was treated as a routine shakeup, with Chief Executive Officer Maria das Gracas Foster praising him as a “dear colleague” who would be “hard to replace.”

Costa, who was also a company director, seemed unruffled. Within months, he had set up a consulting company in Rio de Janeiro’s up-and-coming Barra de Tijuca beach district, with ambitions to raise about $120 million to build a shipyard and marine repair terminal.

This would be a family affair. During a champagne party to celebrate, he showed reporters the tidy office –- holding mementos from his 35 years at the company known as Petrobras –- that he said his wife had decorated and that he planned to share with one of his two daughters who would work alongside him.

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Brazil’s Rousseff Admits There Was Wrongdoing at Petrobras

October 20, 2014

Paulo Trevisani – The Wall Street Journal, 10/19/2014

Brazil’s President Dilma Rousseff said Saturday that there was embezzlement at government-controlled oil producer Petróleo Brasileiro SA .

The company, known as Petrobras, has been at the center of a corruption scandal allegedly involving people connected to Mr. Rousseff’s Workers Party, or PT.

“I will do all I can to reimburse the country,” Ms. Rousseff said during a news conference at the presidential residence late in the afternoon. “There was” deviation of public money, she said according to a transcript of the interview published on her official campaign website.

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Scandal Over Brazilian Oil Company Adds Turmoil to the Presidential Race

October 20, 2014

Simon Romero – The New York Times, 10/19/2014

Paulo Roberto Costa was living an oilman’s dream.

He had a house in a luxurious gated community here. He bought a yacht and drove an armored Range Rover. He had more than $25 million stashed in bank accounts in Switzerland and the Cayman Islands.

But that dream evaporated recently when the police arrested Mr. Costa and charged him with orchestrating a bribery scheme on an epic scale at Petrobras, Brazil’s national oil company, and funneling the proceeds to the governing Workers Party and its allies while enriching himself.

Read more…


Perennial Nightmare Petrobras Pushes Brazil Stocks Lower

October 17, 2014

Kenneth Rapoza – Forbes, 10/15/2014

Presidential polls are not to blame for this one.  Brazil’s stock market decline is a mix of oil giant Petrobras, and lackluster consumer sales. Though for true followers of the Brazilian stock market, Petrobras is public enemy No. 1.

Brazilian equities were the worst performing of the BRIC markets on Wednesday due to Brazil’s perennial stock market disaster — Petrobras — which fell by 9.06%. The iShares MSCI Brazil (EWZ) exchange traded fund settled 5.11% lower today while the MSCI Emerging Markets settled 1.26% lower.

Petrobras remains a government story, mired in electoral politics and fiscal policies.

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