Paulo Sotero – Financial Times, 5/12/2015
The severity of the crisis that has engulfed Brazil in the early part of President Dilma Rousseff’s second term has generated an unusual degree of candour among officials and politicians.
“State capitalism does not work well in a democracy,” said finance minister Joaquim Levy after the gigantic March 15 street protests that revealed the extent of popular anger caused by the nation’s reversal of fortunes, and turned Ms Rousseff into a highly unpopular and isolated leader less than six months after her re-election.
Mr Levy was referring to the part of the crisis he is in charge of fixing: the debilitating effects of large-scale state intervention in the economy during Ms Rousseff’s first term. It turned fiscal surpluses into deficits, brought inflation back, compromised investors’ confidence and threw the nation into a recession expected to last for a while. Mr Levy’s task is probably the easier one.
Interview with Thomas Lovejoy – Veja, 5/20/2015
In an interview with the Brazilian publication Veja, Thomas Lovejoy, Senior Fellow at the UN Foundation, Professor at George Mason University and member of the Brazil Institute Advisory Board , argues that infrastructural development and environmental conservation can – and should – coexist in Brazil. Lovejoy elaborates on two fundamental pillars necessary for sustainable development: research and development as well as political will. According to his extensive research in the Amazon over the last fifty years, Brazilian scientists have gained credibility and prominence for their research worldwide. However it is essential for that ‘know-how’ to be implemented in projects locally, such as hydroelectric dams, enabling their construction and maintenance to become as environmentally friendly as possible. Yet, Lovejoy argues that science is not enough. Rather, a “triple-bottom line” approach – focusing on the effects to people, planet and politics/profits of a project – is a way to preserve biodiversity in the Amazon. Thomas Lovejoy stresses that, although politicians have passed important environmental protection legislation in recent years, new energy project initiatives by the public and private sector need to recognize the value of the flora, fauna and indigenous populations surrounding rivers, instead of solely focusing on the energy-generating capacity of hydroelectric dams. Furthermore, Lovejoy argues that the lack of sustainable development – both locally and globally – have contributed to climate change, deforestation and loss of biodiversity in Brazil and worldwide.
Read more in Portuguese…
Christian Berthelsen – Wall Street Journal, 5/17/2015
Coffee investors are betting that the world’s biggest producer will have fewer beans to sell this year.
Brazil has been exporting huge volumes of coffee as the value of its currency has tumbled in relation to the U.S. dollar. The depreciation has encouraged exports by making foreign sales more lucrative, increasing returns when dollar-denominated sales are converted back to the real. Brazil’s currency fell to a 12-year low against the dollar in March amid government budget deficits and an uncertain economic outlook.
May 14 Brazilian President Dilma Rousseff said on Thursday that her government will maintain rules that mandate production-sharing contracts for the country’s most promising areas and high national content requirements for the oil industry.
“The local content policy is not something that can be set aside, it is central to my policy of reviving our country’s investment capacity,” Rousseff said at the christening of an oil tanker at the Atlântico Sul Shipyard near Recife, Brazil.
“We are going through a period of macroeconomic difficulty, but today things are different because we have these shipyards.”
Joe Leahy – The Financial Times, 05/14/2015
In Brazil’s hyper-consumerist society, people are accustomed to paying for everything in instalments, from fridges and televisions to silicon breast implants. But less commonly known is that even bribes to political parties can allegedly be paid parcelado, as the practice of paying in instalments is called.
That is what Augusto Ribeiro de Mendonça Neto, a former board member of oil and gas services company Toyo Setal, claimed in testimony in March. He alleges that he paid bribes to the ruling centre-left Workers’ party, or PT, between 2010 and 2013 in exchange for winning contracts with state-owned oil company, Petrobras.
The allegations form part of an investigation into a vast corruption scandal at Petrobras known as “car wash”. As part of the probe, Mr Mendonça told prosecutors that João Vaccari Neto, former PT treasurer, asked him to disguise the bribes as payments to a printing and advertising company named Editora Gráfica Atitude.
China is planning to invest up to $50bn (£32bn) in Brazil for new infrastructure projects.
The deal is due to be signed by banks from both countries during a visit by Chinese Prime Minister Li Keqiang to Brazil next week.
The money will go towards building a railway link from Brazil’s Atlantic coast to the Pacific coast of Peru to reduce the cost of exports to China.
Samantha Pearson – Financial Times, 5/12/2015
For Brazil’s economists, 2015 will certainly be a year to forget. Latin America’s biggest economy is expected to contract by more than 1 per cent this year, marking the country’s worst recession in 25 years.
Meanwhile, inflation is set to end the year above 8 per cent, breaking the target range for the first time since 2003.
To add to the country’s woes, the corruption scandal at state-controlled oil company Petrobras — believed to be the biggest of its kind in Brazilian history — has the potential to slow growth further and accelerate job losses.
Anadolu Agency, 5/9/2015
Brazil, Peru and China are working on an outline agreement to create a new railway that would cross South America, the Folha de S.Paulo newspaper reported Tuesday.
The train line would cross the continent, linking Brazil’s Atlantic coastline with the Pacific Ocean in Peru, and in part boost commodity exports.
Preliminary reports estimate the Transoceanic Railway would cost at least $10 billion, and the Brazilian government hopes Chinese businesses will bid for sections of the project.