Brazil opens two main airports to private investors

Leonardo Goy – Reuters, 12/22/2012

Brazil opened two of its international airports to private investors and launched a plan to expand domestic air travel on Thursday as it rushes to accommodate surging air traffic in time for the 2014 soccer World Cup and the 2016 Olympic Games.

The plan to modernize Rio de Janeiro’s Galeao airport, the country’s second-largest, and Belo Horizonte’s Confins airport should attract 11.4 billion reais in bids from private companies, the civil aviation authority said.

Rio de Janeiro, whose creaking Galeao airport struggles to serve rising numbers of tourists and business visitors, is one of 12 Brazilian cities fielding World Cup matches in 2014 and will host the Summer Olympics two years later. Its capacity will be more than doubled from 15 million passengers a year at present to 44 million before the World Cup under the new plan.

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A healthier menu

The Economist, 12/22/2012

SO RARELY has political corruption led to punishment in Brazil that there is an expression for the way scandals peter out. They “end in pizza”, with roughly the same convivial implication as settling differences over a drink. But a particularly brazen scandal has just drawn to a surprisingly disagreeable close for some prominent wrongdoers. The supreme-court trial of the mensalão (big monthly stipend), a scheme for buying votes in Brazil’s Congress that came to light in 2005, ended on December 17th. Of the 38 defendants, 25 were found guilty of charges including corruption, money-laundering and misuse of public funds. Many received stiff sentences and large fines.

The supreme court must still write its report on the trial, and hear appeals—though it is unlikely to change its mind. So in 2013 Brazilians should be treated to an unprecedented sight: well-connected politicos behind bars. José Dirceu, who served as chief of staff to the former president, Luiz Inácio Lula da Silva, was sentenced to almost 11 years; Delúbio Soares, former treasurer of the ruling Workers’ Party (PT), got almost nine. Under the penal code, at least part of such long sentences must be served in jail. The justices also decided that the three federal deputies found guilty will automatically lose their seats if and when those verdicts are confirmed.

Lula was not charged, and has always insisted he knew nothing of the scheme. But Marcos Valério, a former advertising man sentenced to 40 years, claims to have evidence that Lula knew what was going on, and that some of the dirty money paid his personal expenses. These allegations may be merely a desperate attempt by a condemned man to bargain down his jail term. The attorney-general characterised Mr Valério as a “player”, and said his claims should be treated with caution. But if he has significant new evidence the mensalão may yet rumble on.

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IBSA on the 10th anniversary of the Brasilia Decleration

Franis A. Kornegay – SABC, 12/15/2012

Franics Korenegay was a Public Policy Scholar for the Africa Program at the Wilson Center from June-September 2012

Last year, South Africa hosted the 5th summit of the India-Brazil-South Africa (IBSA) Trilateral Dialogue Forum. In 2013 it is India’s turn. This will mark the 10th anniversary of the Brasilia Declaration that led to the trilateral build up toward the summits of heads-of-state of the three countries that have occurred over the last several years. Meanwhile, all three countries have become members of BRICS, the symbolic vanguard among emerging powers leading the non-Western ‘Rest’ through a transition of relative rise amid Western relative decline.

BRICS has garnered considerably more attention than IBSA and is taken much more seriously as a revisionist actor given the great power status of Russia and China compared to the ‘middle power’ profiles of India, Brazil and South Africa. Russia may be something of a ‘has been’ as the former superpower competitor of the US when it was the Soviet Union. But it remains at least a regionalized great power nonetheless. China on the other hand has effectively emerged.

Given perceptions of Sino-Russia as strategic competitors of ‘lone superpower’ America, BRICS carries a weight that middle power IBSA will never carry. And, it has been gaining momentum to a point where former Indian envoy Rajiv Bhatia, director-general of the Indian Council on World Affairs was moved recently to question what he interprets as IBSA’s relevance.

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Brazil’s attorney general says he’ll look into allegations against popular ex-president

AP/Fox News, 12/19/2012

Brazil’s attorney general said Wednesday he will look into allegations that  popular former President Luiz Inacio Lula da Silva knew about a massive  cash-for-votes scheme in Congress that led to the recent convictions of 25  people in a landmark trial.

Roberto Gurgel said he’ll examine statements by businessman Marcos Valerio  that Silva approved of the so-called “mensalao” monthly payout scheme and that  he used cash from it for personal expenses while in office. Silva denies the  allegations.

Valerio was sentenced to more than 40 years in prison and fined $1.3 million  for being what the Supreme Court called the “operator” of the scheme that gave  legislators cash handouts in return for their support of Silva’s policies after  he took office in 2003. Valerio made the allegations against Silva in testimony  to federal prosecutors last September, after he was already convicted but before  he was sentenced. His detractors say that indicates his testimony cannot be  taken seriously.

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Brazil: central bank expects 1 pct growth in 2012

AP/ABC News, 12/20/2012

Brazil’s Central Bank has lowered its growth projection for 2012 to 1 percent in the latest sign of disappointment about economic performance.

Three months ago, the bank was predicting 1.6 percent growth this year. Earlier it projected 2.5 percent growth.

The bank’s statement on Thursday blames the lackluster economic performance of industrialized nations and continued uncertainty in the eurozone.

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Brazil readies more stimulus to boost econom

Luciana Otoni – Reuters/NBC News, 12/19/2012

Brazil’s government on Wednesday geared up to prolong stimulus measures as President Dilma Rousseff seeks to revive an economy that remains stagnant despite more than a year of tax breaks, interest rate cuts, and other efforts to jumpstart growth.

Finance Minister Guido Mantega said the new measures, to be detailed later in the day, would extend payroll tax breaks to sectors beyond targeted industries that already benefit from existing ones. The government, he added, will also unveil changes to next year’s IPI industrial tax on automobiles and home appliances.

Mantega said the government in 2013 will “certainly” raise gasoline prices, which will help stem losses at state owned-oil company Petroleo Brasileiro SA , or Petrobras, which needs extra revenue to fund a massive investment program.

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Brazil central bank cuts growth lower inflation

Silvio Cascione, Luciana Otoni – Reuters, 12/20/2012

Brazil’s central bank acknowledged on Thursday that the economy will grow very little in 2012 and reinforced the case for a long period of low interest rates by forecasting that inflation should ease next year.

The bank lowered its 2012 economic growth forecast to 1.0 percent from 1.6 percent previously, matching market estimates, according to its latest quarterly inflation report.

The bank also lowered its 2013 inflation forecast to 4.8 percent from 4.9 percent previously, contrasting with market forecasts projecting inflation at 5.42 percent.

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