No Major Effect

Paulo Sotero – The Cipher Brief, 08/05/2016

The Olympic Games in Rio de Janeiro – starting today – had the potential to boost Brazil’s international image. Director of the Wilson Center’s Brazil Institute and Brazil native, Paulo Sotero, tells The Cipher Brief’s Kaitlin Lavinder that this was always an exaggeration. However, he says the Games are somewhat of a missed opportunity.

TCB: If the Olympic Games in Brazil go well – that is, if there are no major security breaches and if the competitions run smoothly – what will this do for Brazil’s international image? And, conversely, if the Games don’t go well, what will be the effect?

Paulo Sotero: I think in either scenario it will not have a major effect. If things go reasonably well, people will understand that this is what happens in major sporting events globally. Before, there’s always a tendency to exaggerate or highlight the negatives: that the country’s not ready, that the venues will not be ready in time, and that the country has various negative aspects. And then, when you come closer to the events, people realize that what needed to be ready was, in fact, ready.

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Rio succumbed to the Olympic spirit when the torch landed — but not for long

Dom Phillips – The Washington Post, 08/03/2016

With samba dancers, drumming and a heavy police presence, the Olympic torch landed in Rio on Wednesday morning amid signs that many in the city are finally beginning to succumb to the spirit of the games.

The good mood didn’t last long.

The day started with smiles and ended with police firing tear gas and rubber bullets at protesters in an outlying town. Along the way, a torch carrier bared his buttocks in a novel protest against Brazil’s unpopular interim president, Michel Temer.

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Olympics meant to showcase Brazil’s emergence, now spotlight its collapse

Andrew O’Reily – Fods News Latino, 08/02/2016

Seven years ago when Brazil’s then-President Luiz Inácio Lula da Silva announced that Rio de Janeiro would host the 2016 Summer Olympic Games on the city’s famed Copacabana beach, there was the feeling in the air that something momentous was about to happen in the South American nation.

Lula promised Brazilians that the Olympics and the 2014 World Cup would showcase the country as an emerging power on the world stage that could stand shoulder-to-shoulder with the likes of the United States, Western Europe and Russia.

For Brazil, he suggested that day in 2009, the sky was the limit.

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Businesses Signal Approval of Brazil Leadership Change

Rogerio Jelmayer – The Wall Street Journal, 05/12/2016

Businesses and investors are cheering the new leadership in Brazil following the suspension of President Dilma Rousseff, who many blame for a deep recession and crumbling finances in Latin America’s largest economy.

Vice President Michel Temer, who officially will replace Ms. Rousseff later Thursday as she steps down to face an impeachment trial, is expected to quickly propose measures to cut spending and rein in entitlements.

Mr. Temer could reduce the number of government ministries — more than 30 exist now — and the potential leader of his economic team is looking to tame budget deficits. These measures aim to shrink a massive budget deficit and restore investor confidence.

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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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VP Leads Brazil While Embattled Rousseff Travels

Rafael Romo – CNN, 04/21/2016

It’s a new chapter in Brazil’s deep political crisis, which at times reads like a tropical telenovela. The South American country now has a new president, although it will only be for a few days.

Brazilian Vice President Michel Temer is technically in charge of Brazil — albeit temporarily. How is this possible? It’s all thanks to a particular clause in the Brazilian Constitution which implies that if the president in power leaves the country, the vice president assumes control of the executive power.

His former running mate and current political rival, embattled President Dilma Rousseff, is visiting the United States and plans to attend a climate conference in New York on Friday. That means Temer is not only calling the shots at home, but has effectively become the president … until she returns.

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Brazil’s Political Crisis, Explained

Zack Beauchamp – Vox, 04/21/2016

Brazilian President Dilma Rousseff is in the midst of a stunning fall from grace.

In 2013, Rousseff had a roughly 80 percent approval rating. Today, it’s around 10 percent. Just this Sunday, one house of Brazil’s Congress voted to impeach her.

The story behind Rousseff’s collapse is extraordinary — but also a bit complicated. If you’re just learning about it, it might be a little bit difficult to parse why Rousseff is in so much trouble, and why this is all blowing up now.

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The Heat: Brazil at a Crossroads

Paulo Sotero, Lucrecia Franco,  Ligia Maura Costa, Bernardo Sork, Fabio Ostermann – CCTV, 01/28/2016

Political upheaval, economic downturn and corruption scandals: Brazil is at a crossroads.

So, what’s the way forward for a Latin American giant in crisis? 2015 was not Brazil’s easiest year. Several widespread protests across the country called for change. Confidence in president Dilma Rousseff reached a record low. A scandal at state-run oil conglomerate Petrobras exposed corruption. All while the economy stagnated and began a free fall. 2016 hasn’t started off much better either. For a Brazilian perspective, from Rio de Janeiro, The Heat was joined by CCTV America’s Lucrecia Franco. To discuss the current political and economic climate: Ligia Maura Costa is a professor of legal studies at Escola de Administração de Empresas de São Paulo. Bernardo Sorj is a professor of Sociology at the Federal University of Rio de Janeiro. To discuss Brazil’s future and the youth movement: Fabio Ostermann is one of the founders and a former coordinator of Movimento Brasil Livre. Paulo Sotero is director of the Brazil Institute of the Woodrow Wilson International Center for Scholars.

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Rousseff Poised to Win on Impeachment, Lose on Brazilian Economy

Arnaldo Galvao – Bloomberg Business, 02/01/2016

Embattled Brazilian President Dilma Rousseff may get a new lease on political life when legislators return to work Tuesday to discuss impeachment proceedings against her. Just don’t expect much help from them on the economy.

Following a six-week recess, much of the fervor surrounding the political crisis has died down, and with it the drive to oust Rousseff. Yet with consumers and businesses battered by a deepening recession, legislators have little appetite for the spending cuts and tax hikes administration officials say are needed to restore investor confidence. That’s especially true ahead of municipal elections in October, party leaders and political analysts said in interviews.

The mood could still sour against Rousseff and upset her chances to stay in office if discord increases within the ruling coalition, unemployment surges or the corruption probe that has rattled Congress expands further. But even the politician who stands to benefit the most from the president’s ouster, Vice President Michel Temer, says the mood in Congress has shifted away from ousting Rousseff, according to the G1 news site

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Brazil’s Real Weakens After Central Bank Abandons Rate Increase

Paula Sambo – Bloomberg Business, 01/21/2016

Brazil’s real sank to a four-month low and traders priced in faster inflation after the central bank surprised economists by keeping interest rates unchanged even with consumer-price increases running at more than twice the target.

Policy makers said in a statement accompanying Wednesday’s decision that the global economic outlook was increasingly uncertain, signaling they’re prioritizing economic growth over taming consumer-price increases. Central bank President Alexandre Tombini, in an unusual statement released Tuesday, said he would take into account the International Monetary Fund’s forecast for a deeper recession in Brazil this year.

While forecasts for Brazil’s deepest and longest recession in more than a century could justify a decision to keep interest rates unchanged, the central bank didn’t communicate its strategy clearly in the weeks leading up to the meeting, said Nicholas Spiro, a London-based managing director at Spiro Sovereign Strategy. The decision to hold interest rates at 14.25 percent, when most economists expected an increase, stokes concern that it’s susceptible to political influence.

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