July 28, 2014
Kenneth Rapoza – Forbes, 7/27/2014
Brazil’s economy might be growing near zero, and it’s currency isn’t as strong as it was in the heyday of the U.S. housing bubble of 2008, but that hasn’t stopped the country from becoming more expensive than the entire euro zone. In fact, according to The Economist magazine’s latest edition of the Big Mac index, Brazil’s currency is overvalued, and is third behind mega rich nations like Norway and Switzerland.
Brazil is the most expensive emerging market nation, and the locals are feeling it.
According to the magazine’s Big Mac index, the Brazilian real is overvalued by 5.86% as of July 23, more so than it was in 2009. The Brazilian real is worth R$2.23. But it used to be a lot stronger. In July of 2008, it hit a strong R$1.55. Despite a weaker currency, Brazil’s cost of living is on the rise. For those living there, it’s a cause of frustration. This is still very much a country where roads flood in the rain in major cities like São Paulo, and World Cup and Olympic quality cities like Rio de Janeiro have a whopping 500,000+ living in squalor in hillside slums. The views are nice, but the poverty, the crime, the violence and the lackluster government services to those stuck there remain a national embarrassment.
July 25, 2014
Jim Cahn – Nasdaq, 7/25/2014
With the World Cup having put it in the spotlight, Brazil is getting a lot of critical attention, including reports that the country is unprepared to host the 2016 Olympics. Between those two events are the pivotal October elections, which will determine if South America’s largest country is going to stick with populist policies and price controls or start doing some very unpopular things to mitigate inflation and revitalize the stagnating economy.
Its domestic growth production is restrained in the 2% range, its foreign imbalances have grown, the currency is being hammered and even the often slow-to-react ratings agencies have cut Brazil from BBB to BBB-.
But frankly, it’s not all that bad. In fact, the outlook for certain sectors is quite good, especially consumer goods, finance and infrastructure.
July 21, 2014
Erica Kliment – Brazil Institute, 7/21/2014
The leaders at the 2014 BRICS Summit in Brazil
Is the rest of the world ready for a new order upheld by developing nations? In 2010, when former President Luiz Inácio Lula da Silva invited then-President Mahmoud Ahmadinejad of Iran to the Itamaraty Palace in Brazil, the meeting was highly criticized by the Obama administration. Lula, who had seemed to enjoy international acclaim when dealing with regional politics, was then chastised when he had reached too far out of the western hemisphere. His response was that he was merely attempting to better situate Brazil on the global stage, yet could the criticism have come from the fact that larger power players did not believe Brazil was ready to graduate from the role of regional babysitter?
Four years later, with an unexpectedly successful World Cup under Brazil’s belt and planning on another fruitful mega-event in just two years, the Summer Olympics in Rio de Janeiro, the developed world seems slightly more willing to accept developing nations’ role in the international sphere. Individually, these nations’ global clout is diminishing with slowing economic growth rates, yet collectively, they have the potential to create a new platform upon which they and future developing nations can flourish. Towards the close of the most recent BRICS Summit, five of those countries reached an agreement that, depending on its success, could bring developing nations one step closer to the position they desire – the forefront of international affairs.
During the 2014 BRICS Summit in Fortaleza, the leaders of Brazil, Russia, India, China, and South Africa jointly created the New Development Bank, a multinational fund of $150 billion in capital to provide stability and finance infrastructure for the five developing nations involved in the negotiations as well as future emerging markets. It will be headquartered in Shanghai with its first president from India, on a five-year rotating schedule, and with Brazil taking chairmanship of the board. Read the rest of this entry »
July 18, 2014
Anthony Boadle and Alonso Soto – Reuters, 7/17/2014
China and Brazil sealed their expanding commercial partnership on Thursday with a $5 billion credit line for Brazilian miner Vale and the purchase of 60 passenger jets from Brazilian planemaker Embraer.
In a raft of energy, finance and industry accords signed before presidents Xi Jinping and Dilma Rousseff, the two nations agreed to join forces to build railways to help Brazil cut its infrastructure deficit and feed China’s appetite for commodities.
Trade between China and Brazil soared to $83.3 billion last year from $3.2 billion in 2002, with iron ore, soy and oil making up the bulk of Brazilian exports, making China the South American nation’s biggest trade partner.
July 17, 2014
Daniel A. Medina – Quartz, 7/16/2014
Last summer, long before before Brazil was demolished 7-1 by Germany in the World Cup, the country faced a crisis of another sort. Millions of citizens marched in cities across the country to demand wholesale reforms to the country’s crippled public health care system, which faced huge shortages of doctors and a failing infrastructure.
That’s when the tiny island nation of Cuba stepped in to this neglected area of the world’s seventh-largest economy.
Under Brazil’s Mais Médicos (“More Doctors”) program, which pays foreign physicians to work in underserved areas of the country, Cuba sent 4,500 doctors to rural areas in the Amazon and to the underserved slums known as favelas in its booming cities. The move angered Brazil’s doctors’ unions, who protested outside hospitals, and the Brazilian Medical Association filed a lawsuit in the country’s Supreme Court questioning its existence. Protestors denounced the program as only a temporary solution to a systemic problem, saying the changes should come internally, not by importing doctors.
July 17, 2014
Post & Parcel, 7/16/2014
The logistics giant said it will improve its transit times and territorial coverage in the world’s fifth biggest country under the plan, which will extend the company’s reach to more than 200 cities.
UPS is planning nine new operating facilities in the cities of Sao Carlos, Ribeirao Preto, Franca, Bauru, Sao Jose dos Campos, Sao Jose do Rio Preto, Botucatu, Aracatuba and Presidente Prudente.
The expansion programme should be completed by May 2015, it said.
July 17, 2014
Anthony Boadle – Reuters, 7/16/2014
Brazil hopes that during a visit by Chinese President Xi Jinping it can boost ties with its biggest trade partner beyond the exchange of commodities for manufactured goods, but that may be wishful thinking.
Accords China will sign with Brazil when Xi meets with President Dilma Rousseff on Thursday focus on improving infrastructure to make sure raw materials China is hungry for make it to port, with railways a top priority.
Brazilian officials are portraying Xi’s state visit as a milestone in deepening a strategic partnership that will lead to Chinese investments in Brazil’s manufacturing industry.
July 15, 2014
Paul Kiernan – The Wall Street Journal, 7/14/2014
RIO DE JANEIRO—It’s one sports megaevent down, one to go for this Brazilian city, where authorities have little time to savor Sunday’s World Cup final as they now look ahead to the Olympics.
The 2016 Games start in little more than two years, and most of the sports venues, a new subway line, a rapid-bus line and other facilities remain to be finished.
A largely smooth World Cup has given Brazilian officials and the International Olympic Committee a shot of optimism. Despite widespread concern about the country’s 11th-hour scramble to finish some stadiums and other infrastructure, the monthlong tournament was an operational success.
July 15, 2014
Graham Dunbar – ABC News, 7/14/2014
Brazil got 9.25 out of 10 from FIFA President Sepp Blatter for organizing a World Cup that was “very special” because of high quality football.
Giving his tournament report on Monday, Blatter also criticized the organization he heads for not better tackling incidents of fan discrimination in stadiums.
Blatter said he spoke with Russia President Vladimir Putin at Sunday’s final about making the issue a priority at the 2018 World Cup there.