Anna Edgerton – Bloomberg, 08/16/2016
Acting President Michel Temer’s prized fiscal austerity proposal tocap public spending will only succeed if he can convince Brazil’s Congress to pass a controversial pension reform as well, according to a leading member of his economic team.
While Temer’s administration is confident it can win congressional approval this year of a constitutional amendment to limit federal spending, the inability to cut back on retirement benefits would put public finances at risk, said Mansueto Almeida, the Finance Ministry’s secretary of economic monitoring. A spending cap with growing pension obligations would squeeze other areas in the budget such as health care, he said.
“With the constitutional amendment, spending will be limited, and without pension reform, those costs are going to just grow and grow and grow,” said Almeida, who studied public policy at the Massachusetts Institute of Technology and ran a popular blog on public finance before joining the ministry.
Kenneth Rapoza – Forbes, 08/16/2016
It’s all the rage to try and influence votesin another nation. Everybody’s doing it, so why not Bernie?
Last week, Sanders put out a statement against the pending impeachment of Brazil’s suspended first lady president Dilma Rousseff. He noted that “many observers” continue to say that her ouster resembles a coup d’état. His statement made the rounds on social media, thrown about by Dilma supporters looking for some affirmation from afar that they’re in the right. His statement was perfectly timed, too. That night, the Senate was voting on whether or not to actually hold the impeachment trial after gathering all the evidence needed against her. They needed 54 votes. They got 59. Bernie backed the wrong horse. Dilma is a goner.
Where Sanders got these ideas about Brazil is unknown. After seven days, five emails and phone calls to their press office, no one returns requests for comments. So something that was supposed to be a mere news article, is now going to be an op-ed.
Roger Cohen – The New York Times, 08/15/2016
When I was a correspondent in Brazil 30 years ago inflation was rampant. It ran at an average of 707.4 percent a year from 1985 to 1989. The salaries of the poor were wiped out within hours of being paid. The country went through three currencies — cruzeiro, cruzado and cruzado novo — while I lived in Rio. The only way out for Brazilians, people joked, was Galeão, the international airport.
Antônio Carlos (“Tom”) Jobim, the composer of “The Girl from Ipanema” (whose name is now affixed to that airport), famously observed that, “Brazil is not for beginners.” It was not then and it’s not now. It’s a vast diverse country, a tropical United States, whose rich and poor are divided by a chasm. High crime rates are in part a reflection of this divide. Flexibility is at a premium in a culture fashioned by heat, sensuality, samba and rule bending. Life can be cheap. You adapt or you perish.
Edmar Bacha, a friend and economist, had coined the term “Belindia” to describe Brazil — a prosperous Belgium perched atop a teeming India. I wrote a story about the poor kids from north Rio, far from the beaches of Ipanema and Leblon, who would get their kicks as “train surfers” — riding the tops of fast-moving trains — rather than surf Atlantic waves. Often they died, electrocuted. I will never forget the twisted corpse of one in the city morgue.
Alex Cuadros – The New York Magazine, 08/11/2016
If you only saw the headlines in the lead-up to the Olympics, Rio de Janeiro sounded like the lawless city from a postapocalyptic movie: “Wave of deadly gunbattles hit Rio as the Olympics get closer”; “Body parts wash ashore next to Rio Olympic venue.” Glib listicles played up the threat of political unrest, terrorist attacks, Zika-carrying mosquitoes, and “super-bacteria” in the sewage-tainted bay. One writer used the term “disastrophe” to describe the situation and claimed that so-called “‘lightning kidnappings’ are nearly as popular in Brazil as feijoada” (a delicious bean stew). Another writer topped him with this analogy: “the global event equivalent of a fire tornado touching down on a killer bee sanctuary.”
It was like the Olympics of hyperbolic Olympics scaremongering. Now that the games are on, the hysteria is already looking misplaced. This would have been clear enough to anyone who simply took a walk around the city. The last time I went, at the end of June, Rio was functioning more or less in its usual way: slightly chaotic but manageably so, albeit with fresh construction for the Olympics marring what is perhaps the world’s most beautiful urban topography. Off of Copacabana Beach, I could see locals hopping waves — which suggested that concerns over the quality of the water might be somewhat inflated, too.
It was like the Olympics of hyperbolic Olympics scare-mongering.
I should disclose here that I myself have taken part in the Rio-bashing. I moved to Brazil in 2010, back when the country seemed on the verge of becoming a world power, and watched as the Olympics became an excuse to funnel public money to rich campaign donors for not always useful projects. Still, even I have to admit that Rio has made dramatic improvements in recent years. Perhaps the most dramatic is that the homicide rate, while still appallingly high, has fallen by two-thirds since the 1990s. Even after a spike in murders this year, it’s now less than half the rate in St. Louis, Missouri. And with 85,000 soldiers and police securing Rio for the Olympics, it’s probably one of the safest places in Latin America at the moment.
Brian Ellsworth – Reuters, 08/10/2016
Government employee Jose Lara this month used some vacation days to take a long scenic bus ride through the verdant plateaus and sweeping savannas of southern Venezuela, but the trip was anything but a holiday.
It was a 36-hour grocery run.
Lara took an overnight bus and then a pick-up truck to get across the border to neighboring Brazil to buy food staples that have gone scarce in Venezuela’s crisis-stricken economy.
Tyler Cowen – Bloomberg, 08/11/2016
Brazil, it is often and not quite fairly said, is the country of the future and always will be. As the Olympics focuses global attention on the country, it’s worth exploring the various ways in which this maxim is — and may not be — true.
The puzzle with Brazil is neither its successes nor its failures, but rather the combination of the two. The country has such a dynamic feel, and in the postwar era it saw many years of double-digit economic growth. The Economist featured the country on its cover in 2009 as the next miracle take-off, and in 2012 Germany’s Der Spiegel published a long article titled “How Good Governance Made Brazil a Model Nation.”
Yet Brazil never caught up to the developed world: Its gross domestic product per capita falls about 4 to 7 times short of the U.S. — about where it was more than a century ago. It is now experiencing one of the most severe depressions of any country in modern times. The president, Dilma Rousseff, is in the midst of an impeachment process. The combination of corrupt and violent police, muggings of athletes, polluted water and inadequate facilities have led many to wonder whether Brazil can pull of the Olympics without major embarrassment.
Olivia Arguinzoni- Americas Quarterly, 08/09/2016
New leadership atop Brazil’s massive national development bank is unwinding a decade of rampant lending that fed large conglomerates and strained the country’s finances.
Over the past half-century, Brazil’s Banco Nacional de Desenvolvimento Economico e Social (BNDES) built huge power plants and highways through the industrial southeast, aided social programs in the drought-ridden northeast, and helped create some of today’s world-leading companies like airplane-maker Embraer and pulp producer Fibria. More recently, it helped save the Rio Olympics with an emergency loan.
Such mega-investment projects played a central role in Brazil’s economy over the last ten years of Workers’ Party rule, during which former President Luiz Inácio Lula da Silva and suspended President Dilma Rousseff showed a particular penchant for state-sponsored development.