David Biller – Bloomberg Business, 05/27/2015
Brazil’s economy probably shrank in the first three months of 2015, and the second quarter may be worse as the nation enters its first recession in six years.
Gross domestic product contracted 0.6 percent in the first quarter, according to the median estimate of 36 economists surveyed by Bloomberg. When surveyed last month, analysts forecast that would be the year’s weakest quarter. Now they foresee the second quarter being even worse, according to a May 22-27 survey.
As steward of Brazil’s economic policy, Finance Minister Joaquim Levy has cut spending while raising taxes and the prices of regulated items to avert a sovereign downgrade. At the same time, the central bank is boosting borrowing costs to slow inflation. This two-pronged tightening has already taken a toll on industry and investment, and the slump will spill over into consumption and services in the second quarter, according to Roberto Padovani, chief economist at Banco Votorantim.
Taylor Barnes – USA Today Sports, 05/28/2015
As word of the arrests of 14 FIFA officials and sports executives spread, many Brazilians responded with surprise, a measure of support and a sense of vindication over the news.
The country has seen large-scale protests since 2013, often directed at the government with many exasperated with expenditures on last year’s World Cup and the Summer Olympics, which Rio de Janeiro will host next year.
In the year since the World Cup, outsize stadiums built in cities across Brazil that do not have soccer clubs large enough to fill them have reportedly been used as bus parking lots, and venues to host children’s parties, weddings and religious events.
Paulo Trevisani, Djania Savoldi – The Wall Street Journal, 05/27/2015
The Brazilian Senate on Wednesday approved a controversial bill meant to save taxpayer money by reducing pension payments to widows.
The measure is part of a broader effort to reduce the government’s high debt levels, which are threatening the country’s investment-grade rating.
The vote is a victory for President Dilma Rousseff and comes less than a day after Congress cleared another bill that reduces unemployment benefits. Together, the bills will save some 15 billion Brazilian reais ($4.8 billion) in taxpayer money, government officials say.
Matthew Townsend, Tariq Panja – Bloomberg Business, 05/27/2015
Nike Inc. said it’s cooperating with authorities on the same day the U.S. unsealed charges saying an unidentified sportswear company took part in bribing a Brazilian soccer official for a sponsorship agreement.
The deal described in an indictment of FIFA officials mirrors one obtained by Nike. The charges refer to a U.S. company that signed a partnership with the Brazilian federation in 1996. Nike, based in Beaverton, Oregon, announced its decade-long pact with Brazil that year.
“Nike believes in ethical and fair play in both business and sport and strongly opposes any form of manipulation or bribery,” the company said Wednesday in an e-mailed statement. “We have been cooperating, and will continue to cooperate, with the authorities.” Nike, which isn’t named in the indictment, declined to comment on the allegations.
Juan Pablo Spinetto, Anna Edgerton, Sabrina Valle – Bloomberg Business, 05/27/2015
Oil was to be the elixir of Brazil’s dreams to build a formidable economy, promote industrial development and fund a more generous welfare state even as it attracted billions in private global investment.
Instead, crisis and disappointment in the oil sector are beckoning Brazil’s leadership to move — if grudgingly — toward more deregulated industries and to temper the government’s hand in using state-run companies to forge broader economic policy.
Which helps explain why, as her second term takes shape, some of President Dilma Rousseff’s ministers have jettisoned the statist language of her first four years in office and those of her popular predecessor, Luiz Inacio Lula da Silva. Instead, they are floating some liberal notions more in keeping with the pre-Lula years.
Eric Martin and Anna Edgerton – Bloomberg, 5/27/2015
Brazil President Dilma Rousseff and Mexico President Enrique Pena Nieto signed an investment cooperation accord and pledged to work together to boost growth and expand the middle class in Latin America’s two biggest economies.
On Rousseff’s first state visit to Mexico since taking office in 2011, the countries Tuesday signed agreements to facilitate investment, increase air travel and cooperate on tourism.
Rousseff said that while the two nations have strengthened ties in recent years, Brazil can do more to invest in Mexico. Mexican investment in Brazil is currently about $23 billion a year, while Brazil invests just $2 billion annually in Mexico, according to Rousseff’s administration. Both presidents have seen their popularity fall amid political scandals, weak growth and global oil prices that slumped to a six-year low in March.
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…