With Brazil in Turmoil, Rio Counts Down to Olympics

Rebecca R Ruiz – The New York Times, 04/27/2016

RIO DE JANEIRO — Brazil’s president is facing impeachment. The country’s economy is in sharp decline. Bodies of water that will be used for Olympic competitions are polluted, and global public health officials are trying to tamp down the Zika virus epidemic.

With 100 days before the Olympic Games come to South America for the first time, Rio de Janeiro faces more than the usual challenges that bedevil host cities, like delayed stadium construction and transportation concerns. (Rio has those, too.)

The mood here, however, is hardly one of panic. Officials in charge of executing the Summer Games say they feel insulated from Brazil’s turmoil at this late stage. The Olympics, after all, tend to exist in their own bubble, elaborately coordinated to ensure that the multibillion-dollar operation goes off smoothly.

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Is Brazil giving up on growth?

Kenneth Rapoza – Forbes, 04/25/2016

Inflation is down nearly 100 basis points from a few months ago, but the Central Bank of Brazil has no intention of lowering interest rates. Investors should take this coming Wednesday’s meeting as a cue whether or not there is a growth strategy anywhere in Brasilia.

Nomura Securities said that they are forecasting the Bank to keep rates at 14.25% even though inflation is coming down. Brazil’s rolling 12-month inflation was as high as 10.7% in January. It’s currently 9.4%. Nomura has close ties to Brazil’s central bank and is good gauge of which way the wind is blowing on the monetary policy committee.

Brazil’s economy, expected to contract by around 3.5% again this year, is facing a massive political crisis. It would be good if the central bank could be more independent and cut rates to boost growth. On the other hand, sentiment among Brazil’s business class is so burned out with the twin crises of politics and economics that it is going to take more than a rate hike to improve things.

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BTG Pactual founder Esteves freed by Brazil’s Supreme Court

Samantha Pearson – Financial Times, 04/26/2016

Brazil’s star banker André Esteves, who was jailed in November over corruption allegations, has been freed by the Supreme Court in a move that is set to delight investors but heap criticism on the country’s landmark graft investigation.

BTG Pactual, Latin America’s largest standalone investment bank, said on Tuesday that Mr Esteves, its billionaire founder, was a “free man”, adding that he would be allowed to return to the bank if he so wished.

Mr Esteves was placed in preventive custody in November over allegations he obstructed the nationwide investigation into kickbacks at state-controlled oil company Petrobras — Brazil’s largest-ever corruption scandal.

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Brazil prosecutor vows to keep Petrobras corruption probe on course

Luciana Magalhaes and Reed Johnson – The Wall Street Journal, 04/26/2016

CURITIBA, Brazil—A member of the prosecutorial team spearheading Brazil’s landmark corruption investigation says he and his colleagues will press forward with the vast criminal probe, despite fears that a new government coalition might try to shut it down.

The future of Operation Car Wash, which uncovered a yearslong embezzlement ring centered on state oil company Petróleo Brasileiro SA, or Petrobras, is among the questions raised by the prospect of President Dilma Rousseff being removed from office.

Ms. Rousseff, who was chairwoman of Petrobras during much of the alleged wrongdoing, hasn’t been implicated by prosecutors in the scandal. She faces impeachment on separate charges of violating federal budget laws, allegations that she denies.

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Brazil’s Corruption Culture ‘can be beaten’

Paul Moss – BBC, 04/26/2016

Even a visitor who detests shopping can admire the building’s quirkiness, a semi-arch that seems almost to fall on to the pavement, embodying the modernist curves which define architecture in Brazil’s capital.

This is a city that was constructed virtually from scratch in the 1950s and which is supposed to proclaim the new, progressive side of the country.

Yet the man I had come to meet at the mall had a story as old as his country’s creation: “When you bid for a government contract in Brazil, they usually say ‘what can you do for us? What can you do to make this contract a win-win for all of us?’ They want a percentage of the contract…which means bribes.”

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Brazil Impeachment Countdown Begins as Senate Elects Committee

Arnaldo Galvao – Bloomberg, 04/25/2016

Brazil’s Senate took its first major step forward in the impeachment process on Monday by electing members of a committee that will recommend whether to oust President Dilma Rousseff.

Senators approved in a vote the 21 members of the committee, who are scheduled to pick their president and rapporteur during their first meeting on Tuesday. The committee is made up of multiple parties and has as many as 10 days to hear Rousseff’s defense and make a recommendation to their peers whether to try the president.

Monday’s meeting reinforced a timetable that could see Rousseff’s ouster as early as May 12, as the full chamber can vote two days after the committee finishes its work. The president would have to step down temporarily if the opposition garners the simple majority it needs to start the Senate trial, which surveys conducted by local media show it currently has. Without the power of the presidency at her disposal, Rousseff will have a difficult time winning over enough lawmakers to prevail in the trial, said political analyst Rafael Cortez.

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Brazilian Vice President Michel Temer: I Want to Regain the People’s Trust

Shasta Darlington, Flora Charner, Catherine E. Shoichet – CNN, 04/26/2016

Signs on the way to Brazilian Vice President Michel Temer’s house offer harsh words for the man who could take the helm in the South American country if its President is impeached.

Posters along the route say “golpista,” Portuguese for “coup monger.”