December 5, 2013
Adam Green – Financial Times, 12/05/2013
The BNDES, Brazil’s government-owned development bank, will open its first Africa office on Friday in South Africa’s commercial capital of Johannesburg. Only the third overseas office for the Banco Nacional de Desenvolvimento Econômico e Social after Montevideo and London, it signals the ever-growing ties between Latin America’s largest economy and the world’s fastest growing continent. Its goal is simple – to push Brazilian companies deeper into Africa.
“We feel we are latecomers. We should have been in Africa for some time but now we are ready,” says Sergio Foldes, managing director of the bank’s international division. “By being close to institutions and decision makers, by being able to cover the region better, we can take better decisions.”
The move caps a decade-long strengthening of commercial and diplomatic relations. From 2000 to 2012, trade between Brazil and Africa grew from $4.9bn to $26.5bn. Africa’s share of Brazil’s international trade has doubled from 3 per cent in the 1990s to about 6 per cent today. In the diplomatic sphere, Brazil now has 37 embassies in Africa, up from 17 in 2002. And the love is reciprocated, it seems. Since 2003, 17 African embassies have opened in Brasília, adding to the 16 already there, making the Brazilian capital home to the largest concentration of African embassies in the southern hemisphere.
December 5, 2013
Financial Times, 12/04/2013
On Friday the eyes of the world will turn to Brazil for the draw of next year’s football World Cup finals. Officials had long hoped the tournament could mark Brazil’s coming of age as a global economic superpower. Yet, as they wrestle with an economic slowdown even the traditionally cheerful Brazilians are struggling to keep up their optimism.
For much of the past decade, Brazil has sprinted like one of its outstanding footballers. In 2010, growth jumped to 7.5 per cent, thanks to China’s insatiable appetite for its commodities and credit-driven domestic consumption. The turning of the commodity cycle exposed the limits of this economic model. In the three months to September, output fell by the largest margin since early 2009. This year the economy is expected to expand by a disappointing 2 per cent.
The trouble with the Brazilian economy lies in its chronic lack of infrastructure. At 19 per cent of national income, investment is well below the typical level for an emerging market. Since domestic savings are low, Brazil must rely on external capital to finance the roads and bridges it needs. But foreign investors have become increasingly wary of Brazil because of its high taxes and excessive red tape.
December 3, 2013
Sam Borden- The New York Times, 12/02/2013
While all 32 teams that have qualified for the World Cup anxiously await this week’s draw to determine the groups for next year’s tournament, nowhere is the pressure as great as in Brazil.
Careers for Brazil’s players, coaches and team officials hinge on whether the team lifts the trophy. Concerns about the astronomical costs of hosting the World Cup may be, at least temporarily, assuaged by victory. Even the country’s president, Dilma Rousseff, has a stake — political analysts believe that if Brazil wins, Rousseff may coast to re-election.
It is a load to bear, and at the center of it all is Brazil’s coach, Luis Felipe Scolari, an affable barrel of a man known as Big Phil. So far, he has embraced the pressure with his two sizable hands.
December 2, 2013
Rodrigo Orihuela & Denyse Godoy – Bloomberg, 12/02/2013
Petroleo Brasileiro SA (PETR4) fell the most in 17 months after the government failed to meet a request by the state-run company to disclose a clear policy for phasing out fuel subsidies that have cut earnings and increased debt.
Shares in Petrobras, as the Rio de Janeiro-based crude producer is known, lost as much as 7.2 percent, the steepest intraday decline since June 25, 2012, and the most among members of the Dow Jones Oil & Gas Titans 30 Index.
While President Dilma Rousseff allowed Petrobras to raise prices for the first time since March, the Nov. 29 statement fell short of disclosing details of the methodology for future adjustments. Selling imported gasoline below cost drove down profit the most among major producers last quarter. The fuel losses, a controversial capital increase and record-high debt have made Petrobras, once the sixth most valuable company, the worst-performing major oil stock in the past five years.
December 2, 2013
Anthony Boadle – Reuters, 12/01/2013
They were heckled and called slaves of a communist state when they first landed, but in the poorest corners of Brazil the arrival of 5,400 Cuban doctors is being welcomed as a godsend.
The program to fill gaps in the national health system with foreign doctors, mainly from Cuba, could become a big vote-winner for President Dilma Rousseff as she eyes a second term in next year’s election despite fierce opposition from Brazil’s medical class.
The move to tap Cuba’s doctors-for-export program begun by former leader Fidel Castro became a priority for Rousseff after massive protests against corruption and shoddy public transport, education and healthcare services rocked Brazil in June.
November 25, 2013
Matthew Malinowski – Bloomberg, 11/25/2013
Brazil economists raised their 2014 key rate forecast to the highest level all year as a weakening currency complicates efforts to slow inflation.
Brazil’s central bank will raise the benchmark Selic to 10.50 percent next year, compared with the previous week’s forecast of 10.25 percent, according to the Nov. 22 central bank survey of about 100 analysts published today. Analysts also see the real at 2.30 per dollar by the end of this year, compared to last week’s estimate of 2.27.
President Dilma Rousseff’s administration has struggled to spark economic activity while taming inflation persisting near the upper limit of the central bank’s target range. Consumer prices have come under added pressure from a double-digit drop in the real in 2013. The central bank will extend the world’s biggest rate increase by raising the Selic by 50 basis points this week, according all estimates from 25 economists surveyed by Bloomberg.
November 25, 2013
Shobhan Saxena – The Hindu, 11/24/2013
Alarmed by large-scale spying on their state-owned oil and mining firms and monitoring of personal communication of their top leaders and bureaucrats by the U.S. National Security Agency (NSA), South America’s two biggest countries are urging all other countries in the region to form a joint cyber shield to deflect such surveillance. The move, led by Brazil and Argentina, is the first such effort by a group of countries since NSA revelations about mass surveillance began to come out in June.
In a crucial meeting in Brasilia on Friday, Argentine Defence Minister Agustin Rossi met his Brazilian counterpart, Celso Amorim, and the two leaders agreed to incorporate all the 12 countries in the continent, which together form the UNASUR (Union of South American Nations), in their bilateral treaty on cyber defence.
In August, when top-secret documents released by NSA whistleblower Edward Snowden had revealed that Brazil was one of the most-monitored countries by U.S. intelligence agency, the two ministers had met in Buenos Aires to discuss how to jointly fight the existing and potential cyber threats — mostly coming from the North.
November 22, 2013
Brian Winter & Cesar Bianconi – Reuters, 11/22/2013
Seen from Brazil’s modernist, glass-walled presidential palace, 2014 looks like a minefield.
The economy, already sputtering, will probably slow even further. A downgrade of Brazil’s credit rating seems possible, if not likely. The World Cup of soccer, which Brazil will host in June and July, could end up revealing to billions of TV viewers the shoddy government planning and transportation bottlenecks that have frustrated investors here for years.
To top it all off, leftist President Dilma Rousseff is up for re-election in October – meaning if any of those things go horribly awry, she might lose her job.
November 22, 2013
Paulo Winterstein – Wall Street Journal, 11/21/2013
Brazil plans to hand over two of the country’s biggest airports to private operators Friday in a crucial test of President Dilma Rousseff’s efforts to attract tens of billions of dollars of investment and restore confidence amid sluggish economic growth.
Bottlenecks affecting the country’s roads, railways and ports are widely blamed for choking off faster economic growth. The government drew up a plan to spend about $230 billion over the next few years, and it toured European, Asian and U.S. capitals to try to attract financing. It has bet heavily that the concessions program will counter accusations that it has taken a heavy-handed approach to the private sector.
The Galeão international airport in Rio de Janeiro and Belo Horizonte’s Confins airport are important pieces of the government’s plan. Both are already stretched in terms of capacity, and traffic is expected to triple over the concessions’ lifetime. which is 25 years in the case of Galeão and 30 years in the case of Confins. The airport in Rio will be a major gateway for the hundreds of thousands of tourists who are expected to flood Brazil when it hosts the soccer World Cup in 2014 and the Summer Olympics in 2016.
November 21, 2013
Raymond Colitt – Bloomberg, 11/20/2013
Investors have never been more pessimistic about Brazil President Dilma Rousseff’s policies, with only 10 percent saying the nation can avoid a credit-rating downgrade in the next year, a Bloomberg Global Poll shows.
Fifty-one percent say they are pessimistic about Rousseff’s policies, compared with 22 percent when she took office in January 2011, according to the poll of 750 analysts, investors and traders who are Bloomberg subscribers. The world’s second-largest emerging market will offer one of the worst opportunities over the next year compared with the U.S., U.K., European Union, Japan, India, Russia and China, respondents say.
The government has been struggling to revive the economy as above-target inflation and a widening budget deficit erode investor and consumer confidence. Rousseff will end her first term next year with the slowest four-year expansion of gross domestic product since 1990, according to the latest central bank survey of economists. Standard & Poor’s in June placed Brazil’s rating on negative outlook, citing weak growth.