Brazil’s Gol to increase flights at expanding Viracopos airport

Dow Jones Newswires/Fox Business, 05/24/2013

Gol Linhas Aereas Inteligentes (GOLL4.BR, GOL) said Friday it is seeking to double the number of flights it operates out of Viracopos airport, the privately-controlled airport currently undergoing a sizable expansion.

Gol, Brazil’s second-biggest airline by market share, said in a regulatory filing it is seeking regulatory approval to operate six more flights out of Viracopos airport, located in the city of Campinas about 100 kilometers north of Sao Paulo.

Viracopos was handed over to private operators last year as part of the Brazilian government’s move to increase airport investment, especially ahead of the 2014 World Cup and the 2016 Summer Olympics. The airport, which currently serves as a hub for regional carrier Azul Linhas Aereas Brasileiras, could become Brazil’s biggest airport in about two decades if all the expansions proposed by the government ahead of the handover are carried out.

Read more…

Economics lessons from China and Brazil can teach each other

Katy Barnato – CNBC, 05/23/2013

They may both be “BRICs“, but China and Brazil face opposite problems and should take tips from each other, according to a report by Capital Economics published on Thursday.

“Brazil in essence needs to become more like China, with its investment growth, and China needs to learn from Brazil in how to support consumer spending,” said Capital Economics’ chief emerging markets economist, Neil Shearing, in a pan-EM report.

Growth has slowed in both the EM giants, as the impact of euro zone woes and a sluggish U.S. economy is felt in countries with previously robust economies. However, Shearing said that Brazil’s and China’s difficulties were largely rooted in country-specific, but contrasting, problems.

Read more…

The view toward closer U.S.-Brazil Relations

Julia E. Sweig – Council of Foreign Relations, 05/22/2013

Vice President Joe Biden will visit Brazil, Colombia, and Trinidad and Tobago next week. Don’t assume this American vice president is merely ceremonial: he has a significant domestic portfolio including immigration, guns, and the budget. Nor is his visit one of those bloated good will trips meant to dole out patronage or shore up support for some American foreign venture. Rather, it seems the Obama administration has decided to try and seize a huge, and to date largely missed opportunity related to jobs, energy, and prosperity in Latin America.

Why the sudden awakening? Immigration reform, the President’s top legislative priority this year, and a political must for both parties, has alerted the White House to the potential foreign policy benefit in Latin America, and not just Mexico, of solving a major domestic problem. In fact, the White House and the American public’s disposition to deal with once untouchable domestic politics around immigration, guns, energy, marijuana legalization, and maybe even Cuba, open the door for potential convergence with Latin America. And provide a chance to get beyond the usual ideological battles that too often sap diplomatic energy and patience.

Biden arrives in Brazil five months before President Rousseff’s state visit to the United States and ten years since President Bush and President Lula convened their cabinets for a joint ministerial meeting, their recognition of the strategic potential for the two democracies and their economies. Since then, dozens, if not hundreds, of ministerial and sub-ministerial meetings have followed. And we have stitched together dozens of inter-governmental dialogues, initiatives, defense, business, scientific, and educational exchanges. Yet there is still something missing between the two powers—call it a lack of ambition.

Read more…

Brazil to eliminate payroll tax on bus fares – finance minister

Reuters, 05/23/2013

Brazil will eliminate a payroll tax on bus fares, Finance Minister Guido Mantega said on Thursday, in another measure to curb consumer price increases as inflation hovers near the ceiling of the government’s target.

The change in the so-called PIS/Cofins tax will be announced through a provisional measure by President Dilma Rousseff in coming days, Mantega told journalists. The current tax rate was not immediately clear.

Stubbornly high inflation has dented business and consumer confidence in Latin America’s largest economy, complicating Rousseff’s efforts to boost economic growth.

Read more…

Brazil freezes $13.7 billion from budget to meet fiscal goal

Maria Luiza Rabello, Matthew Malinowski – Bloomberg, 05/22/2013

Brazil’s government has frozen 28 billion reais ($13.7 billion) in its 2013 budget as it tries to meet its primary surplus target, Finance Minister Guido Mantega said.

Officials did not freeze portions of the budget set aside for investments and hosting the World Cup soccer tournament, Mantega told reporters today in Brasilia. The government may increase abatements against this year’s fiscal surplus goal to 45 billion reais, Mantega said, up from February’s estimate of 25 billion reais.

President Dilma Rousseff’s administration this year is seeking to meet Brazil’s primary surplus goal of 155.9 billion reais without undermining economic growth. Authorities have extended tax cuts and increased spending to spur the economy, even as such measures have helped keep annual inflation near the 6.5 percent upper limit of the central bank’s target range.

Read more…

Despite risks, Brazil courts the millisecond investor

Dan Horch, Nathaniel Popper – The New York Times, 05/22/2013

At a time when the mere phrase “high-frequency trading” makes some investors queasy, Brazil’s stock exchange is putting out the digital welcome mat.

In recent years, the BM&F Bovespa stock exchange in São Paulo has taken steps to make its market more friendly to high-speed traders, even as many regulators around the world are casting an increasingly skeptical eye on the sector after a series of well-publicized market malfunctions in the United States.

Lawmakers in Canada, Australia and the European Union have been looking at imposing limits on such traders, whose investment time horizons are measured in milliseconds rather than months.

Read more…

Roberto Azevedo’s WTO appointment gives Brazil a seat at the top table

Nicolas Bourcier – The Guardian, 05/21/2013

Earlier this month the World Trade Organisation (WTO) announced that it had chosen the Brazilian Roberto Azevedo, 55, as its next director general. In September he will take over from France’s Pascal Lamy, who has served two four-year terms.

It is a personal success for this career diplomat, but it is also a victory for Brazil on the international scene. The Brazilian diplomatic corps pulled out all the stops to convince a majority of the 159 member states that their candidate was the right choice. But Azevedo’s appointment is also a new departure, this being the first time that a Brazilian has headed one of the key bodies in the postwar Bretton Woods system. The country at last has a seat at the top table.

The vote “shows a global order in transformation”, said foreign minister Antonio Patriota, with “emerging markets [showing] leadership”.

Read more…

Brazil economists forecast 2013 growth below 3% for first time

Raymond Colitt – Bloomberg, 05/20/2013

Brazil’s economy will grow below 3 percent in 2013, economists predicted for the first time in a central bank survey of about 100 analysts published today.

Latin America’s largest economy will grow 2.98 percent this year, down from the previous week’s projection of 3 percent. It would be the first time in a decade that Brazil grows below 3 percent for three consecutive years.

Brazil’s economy has struggled to recover from last year’s expansion of 0.9 percent as accelerating inflation undermines consumer demand. While economists raised their 12-month inflation forecast to 5.64 percent from 5.57 percent, they maintained their projection for inflation this year and next at 5.8 percent, according to the survey.

Read more…

Amazon be damned: deforestation undermines future viability of Brazil’s hydropower projects

Erin Brodwin – Scientific American, 05/15/2013

The Amazon Basin is the epicenter of the world’s hydropower plants—the same gushing rains that give the region its lush foliage make it a prime destination for developers seeking to capitalize on this allegedly renewable energy source. But the long-term sustainability of these projects, which use the natural flow of water to generate electricity, is now under scrutiny.

A new study of the Belo Monte Dam, one of the world’s largest hydropower energy complexes currently under construction on the Xingu River in the eastern region of the basin, found that large-scale deforestation in the Amazon poses a significant threat to a dam’s energy-generating potential.

Although many studies have examined the impacts of deforestation on the immediate vicinity of hydropower projects, less attention has been paid to its effects on a regional scale. In fact, earlier studies found that a loss of trees within the water basin of hydropower sites increased the energy-generating capacity of the dam in the short-term, because less trees were available to suck water from the ground and export it outside the watershed in a process known as evapotranspiration.

Read more…

Brazil’s No. 2 finance ministry official to quit post in June

Reuters, 05/13/2013

Brazil’s deputy Finance Minister Nelson Barbosa, who helped design some of the government’s flagship economic projects, has handed in his resignation for personal reasons and will leave the post in June, the ministry said on Monday.

Folha de S. Paulo newspaper reported his departure over the weekend, citing loss of influence within President Dilma Rousseff’s government as the reason for his resignation.

Folha said Barbosa, once a close advisor to Rousseff, had lost access to the president with the rise of Treasury Secretary Arno Agustin, who is expected to take his place as the ministry’s executive secretary.

Read more…