Insight: Brazil’s slump hits job market as election approaches

August 25, 2014

Brad Haynes and Silvio Cascione – Chicago Tribune, 8/22/2014

Many of Brazil’s biggest retailers, homebuilders and carmakers are cutting jobs as Latin America’s largest economy teeters on the edge of recession, a fresh blow to President Dilma Rousseff’s re-election bid.

For years, low unemployment was key to Brazil’s emergence as an economic power and important gains in the fight against poverty.

The unemployment rate remains near record lows of around 5 percent and the leftist Rousseff regularly touts it as a success of the ruling Workers’ Party over the last 12 years.

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How Argentina’s Debt Crisis and Brazil’s Civil Unrest are Eclipsing Latin America Opportunities

August 21, 2014

Tim Pennington – International Business Times, 8/21/2014

News stories emanating from Latin America rarely frame the region’s economy in a positive light.

This summer’s excellent World Cup – while not eclipsed on the field – was against a backdrop of strikes and civil unrest in Brazil’s major cities. Similarly, Argentina’s President Cristina Kirchner and her government were forced to default on their debts for a second time in thirteen years.

The negative image that these high-profile stories create does not do justice to the economic transformation taking place in Latin America or the investment opportunities the region now offers to business.

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Japan PM tells Brazil ‘Abenomics’ working, time to do more business

August 6, 2014

Anthony Boadle – Reuters, 8/1/2014

Japan’s Prime Minister Shinzo Abe touted the success of his economic policies on a visit to Brazil on Friday and said it was time for the two nations to expand their trade and investment partnership.

On the first visit to Brazil in a decade by a Japanese prime minister, Japanese banks extended $700 million in loans to boost Brazilian soy and corn exports to Japan and help finance oil platform construction for Brazil’s growing offshore oil industry.

Abe told Brazilian business leaders that Japan has closed a 15-year deflation cycle since his stimulus policies began to kick in and there is great potential to expand trade and investment with Latin America’s biggest economy.

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Japan Inc. Seeks to Recover Influence in Brazil

August 5, 2014

Juan Pablo Spinetto – Bloomberg, 8/4/2014

In the 1950s, Japan helped Brazil establish industries such as steelmaking and initiated key purchases of Brazilian iron ore. Now the Asian nation is seeking to regain influence in Latin America’s largest economy, where China is the No. 1 trading partner.

Japan has signed deals from energy to food and health care during Prime Minister Shinzo Abe’s visit to the country, the first by a Japanese leader in a decade. Abe wants to strengthen ties with Brazil, where about 1.6 million people of Japanese descent live, as he urges his country’s companies to seek more business outside their domestic market.

Top representatives from Toyota Motor Corp., Nippon Steel & Sumitomo Metal Corp. and Sumitomo Mitsui Financial Group Inc. were among the business people accompanying Abe in Brasilia and Sao Paulo, the last destinations of a nine-day tour through Latin American and the Caribbean. Brazil is important for Japan because it has industries such as infrastructure and is a safe jurisdiction, said Yutaka Kase, the chairman of Tokyo-based commodity supplier Sojitz Corp.

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UBS Brazil CEO Plans Wealth-Management Expansion

August 4, 2014

Cristiane Lucchesi – Bloomberg, 8/3/2014

UBS AG (UBS), the biggest Swiss bank, is considering buying a wealth-management firm in Brazil as it seeks to expand that business sevenfold by 2020, said Sylvia Coutinho, chief executive officer of the lender’s Brazil unit.

“We are looking for acquisition opportunities in the Brazilian market,” Coutinho said July 31 in her first interview since taking the job last year.

UBS plans to hire more people for its wealth business and open offices in Rio de Janeiro and Belo Horizonte to serve high-net-worth clients even if it can’t find a firm to buy, she said. The focus will be on those with assets of 5 million reais ($2.2 million) or more to invest, said Coutinho, formerly head of retail banking and wealth management for Latin America at HSBC Holdings Plc.

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Israel Faces Latin American Backlash

July 31, 2014

Robert Kozak – The Wall Street Journal, 7/30/2014

Bolivian President Evo Morales on Wednesday labeled Israel a “terrorist state” and announced that Israelis need visas to visit, the latest in a series of measures Latin American countries have leveled against Israel for the violence in the Gaza Strip.

Criticism of Israeli policies has come from some parts of the world. Latin American countries have stood out by coordinating a range of diplomatic measures, including recalling their ambassadors for consultations and issuing sharply worded statements, political analysts said.

“Israel doesn’t guarantee the principle of respect for life, and the basic right to live in harmony and peace in the international community,” Mr. Morales said Wednesday in a speech in the Bolivian city of Cochabamba. There was no immediate Israeli response to Mr. Morale’s accusations or Bolivia’s decision to require that Israeli visitors apply for visas.

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Brazil Real Intervention Out of Sync With Slowdown, IMF Says

July 30, 2014

Sebastian Boyd – Bloomberg, 7/29/2014

The International Monetary Fund said Brazilian central bank President Alexandre Tombini shouldn’t shore up the real as Latin America’s largest economy stalls and inflation accelerates.

Adjusting for inflation, Brazil’s currency was 5 percent to 15 percent stronger than “implied by fundamentals and desirable policies” in 2013, IMF economists wrote in a research report published today. The real has appreciated 5.9 percent this year against the dollar while inflation accelerated to a 13-month high and economic growth slowed.

The central bank said last month it was extending through the end of 2014 a currency intervention program aimed at helping to boost the real and curb prices for imports. After nine consecutive increases in the target lending rate, policy makers held it at 11 percent on July 16 for a second straight meeting. The central bank didn’t return phone and e-mail messages seeking comment today.

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