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.
Paulo Trevisani – The Wall Street Journal, 5/12/2015
BRASÍLIA—Brazil’s government needs to implement its plans to improve its financial situation and bring price increases under control to help restore confidence, competitiveness and growth to the economy, the International Monetary Fund said in a report published Tuesday.
“Fiscal consolidation should proceed without delay along the announced lines, while monetary policy should remain tight to bring inflation to target,” the report said.
Finance Minister Joaquim Levy, who took office in January, is pushing spending cuts and higher taxes to plug a budget hole caused by years of costly economic stimulus.
Lawrence Delevigne – CNBC, 5/12/2015
Once an investor darling, Brazil is hardly a consensus target for international cash today.
High inflation, a sluggish economy and a massive corruption scandal at state energy company Petrobras have caused many investors to flee. But others are sticking with the beleaguered South American country.
One example is $193 billion private equity giant Carlyle Group. Co-CEO David Rubenstein thinks Brazil is actually the most appealing market for investment after the U.S., Europe and China, according to remarks made Tuesday at the Global Private Equity Conference in Washington, D.C.
Eric Ehrmann – Huffington Post, 5/12/2015
In São Paulo recently, gunmen raided the fan club of popular first division soccer team Corinthians called Pavilion 9 during a party, forced eight members to the floor and murdered them in cold blood.
The mob-style rubout killed more people than the infamous St. Valentines Day Massacre orchestrated by Chicago gangster Al Capone.
But in Brazil, where riots and killings are part of the urban landscape, people shrug it off and the victims become part of the body count in the growing conflict between haves and have-nots.