The United States and Brazil: On Reaping What You Sow

Jan Knippers Black – NACLA, 3/6/2015

It was often said in Latin America in the early 1960s that when the United States sneezed, Latin America caught pneumonia. In fact, it was repeated year after year until the fall of 2008, when the United States caught pneumonia and Latin America sneezed.

Brazil, in particular, after a short spell of sneezing, rebounded to its pattern of robust economic growth, grounded in sophisticated research and development, diversified products and trading partners. Through years both of boom and, more recently, slump, redistributive domestic programs, like Bolsa Familia, and higher minimum wages have enabled Workers’ Party (PT) governments to narrow the country’s income gap. Meanwhile, the U.S. sinks deeply into debt to China and the domestic income gap continues to grow. The one percent are thriving; not so the 99.

The changing relationship between the United States and Brazil over the last couple of decades responds in large part to changes in the global power game and to how each of the countries has played the game. Currently undergirded by socially responsible civilian leadership and the legendary diplomatic skills of Itamaraty, the foreign ministry, Brazil can expect to be taken into account on issues of global import; moreover, its collaborative outreach has served to strengthen national self-confidence elsewhere in Latin America. Does that mean that the United States can be counted upon now to treat Brazil, and Latin America in general, with respect, like good neighbors rather than subservient and potentially subversive clients? Apparently not.

Read more…

Schumpeter: Brazil’s business Belindia

The Economist (print edition), 2/28/2015

BRAZILIANS make up almost 3% of the planet’s population and produce about 3% of its output. Yet of the firms in Fortune magazine’s 2014 “Global 500” ranking of the biggest companies by revenue only seven, or 1.4%, were from Brazil, down from eight in 2013. And on Forbes’s list of the 2,000 most highly valued firms worldwide just 25, or 1.3%, were Brazilian. The country’s biggest corporate “star”, Petrobras, is mired in scandals, its debt downgraded to junk status. In 1974 Edmar Bacha, an economist, described its economy as “Belindia”, a Belgium-sized island of prosperity in a sea of India-like poverty. Since then Brazil has done far better than India in alleviating poverty, but in business terms it still has a Belindia problem: a handful of world-class enterprises in a sea of poorly run ones.

Brazilian businesses face a litany of obstacles: bureaucracy, complex tax rules, shoddy infrastructure and a shortage of skilled workers—to say nothing of a stagnant economy (see article). But a big reason for Brazilian firms’ underperformance is less well rehearsed: poor management. Since 2004 John van Reenen of the London School of Economics and his colleagues have surveyed 11,300 midsized firms in 34 countries, grading them on a five-point scale based on how well they monitor their operations, set targets and reward performance. Brazilian firms’ average score, at 2.7, is similar to that of China’s and a bit above that of India’s. But Brazil ranks below Chile (2.8) and Mexico (2.9); America leads the pack with 3.3. The best Brazilian firms score as well as the best American ones, but its long tail of badly run ones is fatter.

Read more…

Brazil’s coming recession: The crash of a titan

The Economist (print edition), 2/28/2015

IT IS easy for a visitor to Rio to feel that nothing is amiss in Brazil. The middle classes certainly know how to live: with Copacabana and Ipanema just minutes from the main business districts a game of volleyball or a surf starts the day. Hedge-fund offices look out over botanical gardens and up to verdant mountains. But stray from comfortable districts and the sheen fades quickly. Favelas plagued by poverty and violence cling to the foothills. So it is with Brazil’s economy: the harder you stare, the worse it looks.

Brazil has seen sharp ups and downs in the past 25 years. In the early 1990s inflation rose above 2,000%; it was only banished when a new currency was introduced in 1994. By the turn of the century Brazil’s deficits had mired it in debt, forcing an IMF rescue in 2002. But then the woes vanished. Brazil became a titan of growth, expanding at 4% a year between 2002 and 2008 as exports of iron, oil and sugar boomed and domestic consumption gave an additional kick. Now Brazil is back in trouble. Growth has averaged just 1.3% over the past four years. A poll of 100 economists conducted by the Central Bank of Brazil suggests a 0.5% contraction this year followed by 1.5% growth in 2016.

Read more…

Brazil’s scandalous boom to bust story

Patrick Gillespie – CNN Money, 2/19/2015

Five years ago its economy grew three times faster than the United States. In 2011 its economic size surpassed Great Britain’s. Millions of Brazilians moved from poverty to the middle class, and the president at the time, Luiz Inácio Lula da Silva, had an 83% approval rating.

Eike Batista, once Brazil’s richest person, told “60 Minutes” that his nation was realizing its potential.

“Brazil has put its act together,” Batista told 60 minutes in 2010. “We’re walking into a phase of almost full employment…It’s unbelievable.” It certainly was unbelievable.

Read more…

Young, Black, Alive – Breaking the silence on Brazil’s soaring youth homicide rate

Atila Roque – Live Wire, 11/26/2014

Earlier this week, many people around the world waited with bated breath for a grand jury’s decision in a case where a police officer shot dead an unarmed young black man on the street. While the 9 August shooting of Michael Brown took place in the US suburb of Ferguson, Missouri, the case has a deep resonance here in Brazil. The tragic course of events leading up to the teenager’s death could just as easily have played out on the streets of our cities orfavelas.

Of the 56,000 homicides in Brazil every year, 30,000 are young people aged 15 to 29. That means that, at this very moment, a young person is most likely being killed in Brazil. By the time you go to bed, 82 will have died today. It’s like a small airplane full of young people crashing every two days, with no survivors. This would be shocking enough by itself, but it’s even more scandalous that 77 per cent of these young people are black.

Since 1980, more than 1 million people have been murdered in Brazil. According to Global Burden of Armed Violence 2008, in the period from 2004 to 2007, more people were killed here than in the 12 main wars worldwide. However the violence doesn’t impact Brazilian society equally. Murders are rampant in poor and marginalized communities. Prejudice and negative stereotypes associated with the favelas and city outskirts have a key role in perpetrating this violence.

Read more… 

 

Brazil focuses on nurseries, schools and jobs to fight poverty

Sam Jones – The Guardian, 11/24/2014

Expanding nursery provision, improving educational standards and providing more vocational training to adults will be at the heart of Brazil’s efforts to fight poverty and inequality over the next few years, according to the country’s social development minister.

While she trumpeted the successes of the bolsa familia poverty-relief programme – the cash handout given to almost a quarter of Brazilian families on condition that their children go to school and get vaccinated – Tereza Campello insisted that the country still had a long way to go in creating a fairer and more prosperous society.

Introduced in 2003 by the government of President Luiz Inácio Lula da Silva, the bolsa familia is estimated to have kept 36m families out of extreme poverty and to have been responsible for a dramatic drop in infant mortality, with 0-5 deaths from diarrhea falling by 46% and deaths from malnutrition down by 58%.

Read more…

Extreme poverty up in Brazil after falling for a decade

EFE – Fox News Latino, 11/05/2014

The number of Brazilians living in extreme poverty grew from 10.08 million in 2012 to 10.45 million in 2013, the first increase after 10 consecutive years of reductions, the government said Wednesday.

Even with the uptick in 2013, the total number of indigent people is less than half what it was in 2003. Total population in Brazil climbed from 198.66 million in 2012 to 201.93 million in 2013, a 1.2 percent increase. The 3.7 percent increase in the number of destitute people was reported by the official Institute of Applied Economic Research, known by the Portuguese initials IPEA, drawing on data from an ambitious household survey.

The data was posted on the IPEA Web site without comment after the agency received criticism for not releasing the figures earlier, as scheduled, before the Oct. 26 runoff vote that gave President Dilma Rousseff a second term.

Read more…

Countdown begins for Brazil elections

CCTV America, 09/17/2014

It’s down to the wire in next month’s presidential election in Brazil. Incumbent Dilma Rousseff is battling her main rival Marina Silva. For the third time, the candidates appeared in a televised debate. As CCTV America’s Paulo Cabral reports from Sao Paulo, they know the slightest misstep could make a huge difference in what’s expected to be a close election.

The third televised debate was organized by Brazil’s Catholic Church. Clergymen and journalists from religious media asked the questions. And while the questioners were different, the main issues were not. As they did in the previous debates, the candidates talked about health, poverty, the economy and political reform.

President Dilma Rousseff stayed on message,focusing on her government’s accomplishments. Her main challenger is socialist candidate Marina Silva. Polls show the two women will likely square off in second round runoff in a race that’s too close to call.

Read more…