Why recession won’t affect the result of Brazil’s presidential election

September 2, 2014

J.P. – The Economist, 09/01/2014

Recession is never good news for an administration. And in the run-up to a general election it can be a death knell. With five weeks to go before polling day, Brazil’s opposition must therefore have quietly rejoiced at official data released on August 29th, showing that GDP had dipped by 0.6% in the second quarter and by 0.2% in the first. Yet the dismal figures may not matter as much to electoral calculus as President Dilma Rousseff’s rivals would have hoped. Why is that?

Ms Rousseff blames the contraction on weak global recovery from the 2009 financial crisis, as well as a “surfeit of public holidays” (and thus fewer working days) during the month-long football World Cup in Brazil, which concluded on July 13th. These extra holidays were added by the authorities in a bid to ease pressure on public transport in World Cup host cities. But critics point out that this does not explain the fall in output during the first three months of the year—and the government had previously promised a Copa-related economic bonanza. Of the 45 countries which have reported second-quarter GDP so far, only war-torn Ukraine has fared worse.

Instead, Ms Rouseff’s critics blame the slowdown on flagging business confidence and falling investment as a result of her interventionism, fiscal laxity and failure to address chronic problems: the shoddy infrastructure, tangles of red tape and arguably the world’s most convoluted tax system.

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Brazilian President Criticizes Marina Silva’s Political Platform

September 2, 2014
TeleSUR - 09/01/2014
Brazilian President Dilma Rousseff claims that Marina Silva’s industrial policies will negatively impact employment. During a press conference at the Brazilian presidential palace, President Dilma Rousseff criticized the policies of her opponent Marina Silva on Sunday leading up to the presidential elections in October, claiming that Silva’s political platform would greatly hurt the country’s domestic industrial sector and could potentially lead to widespread unemployment.

“After reviewing her political proposals, I am very concerned particularly with regards to the creation of employment and industrial policy,” Rousseff said.

In particular, Rousseff questioned her presidential candidate rival’s proposal with regards to providing fiscal incentives to certain industrial sectors, stating that such measures “are only effective in particular cases not as general rule of thumb.”

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9 reasons why Brazil is the new America

July 22, 2013

Steven Perlberg – Business Insider, 07/21/2013

Brazil has something of an identity crisis right now.

As protests continue, the world has been exposed to the massive social unrest in the country over inequality, corruption, and the adverse economics of preparing to host global sporting events like the upcoming World Cup.

Still, as one of the so-called BRIC countries — a term that has become less vogue as investors take a wider look at emerging market countries — Brazil is uniquely positioned to keep growing.

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In Brazil, a reminder of emerging-market risks

July 8, 2013

Tim Gray – The New York Times, 07/06/2013

THE protests in Brazil last month were the latest vivid reminder of the perils of investing in emerging markets. Tens of thousands of demonstrators thronged the streets of São Paulo, Rio de Janeiro and other cities, incited partly by a rising cost of living and a slowing economy. Cars burned. Tear gas billowed. And the Brazilian stock market sank.

Yet Brazil was one of the investment darlings of the last decade — the “B” in the ballyhooed BRIC quartet that also included Russia, India and China. Brazil’s economy at times grew at a rate of more than 5 percent a year. Most years, its stock market rose by double digits — in 2009, it returned more than 100 percent. Millions of people moved from poverty into the middle class, and Brazilian companies, like the oil driller Petrobras and the mining concern Vale, attained international prominence.

So far this decade, though, the Brazilian stock market has been a bust. It has dropped by a cumulative 25.3 percent over the last three years, and it has dragged Latin America stock mutual funds down with it. In the first half of 2013, Latin America funds tracked by Morningstar lost almost 17 percent, on average. Over the last three years through June, they lost 4.6 percent a year, annualized. But over the much longer term, they have still fared the best among emerging-market regional funds tracked by Morningstar, returning 16.7 percent, annualized, over the last decade.

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Protests in Brazil burst bubble: everything is not fine

June 20, 2013

Rasheed Abou-Alsamh – International Business Times, 06/20/2013

The mass street protests that broke out last week in Sao Paulo, and have since spread to other major cities in Brazil, caught many by surprise. Investors and politicians who thought the economic miracle of South America’s biggest country — the headliner of the BRIC group with Russia, India and China — would never end were especially surprised. So were many observers who had bemoaned the passivity of Brazilians in seemingly accepting corruption and overtaxing by their government. The past week’s events have shown that the Brazilian giant, sleeping for so long, has awoken again.

The protests began last week with a demonstration organized by the Passe Livre (Free Pass) movement, a leftist group that wants free public transportation in all of Brazil as its ultimate goal. The announcement that bus fares were being hiked from R$3 (US$1.37) to R$3.20 (US$1.47) was the spark for the march on Avenida Paulista, Sao Paulo’s largest boulevard.

The city’s mayor and the governor of Sao Paulo state, Fernando Haddad and Geraldo Alckmin, both said they would not budge on the price hike and promptly flew off together to Paris to pitch their city as a candidate host of the 2020 World Expo. As the demonstrations grew and continued, they quickly returned home. But it was not until violent clashes between protesters and riot police, using rubber bullets and tear gas on June 13, which left 105 protesters and 12 policemen wounded, that they started to pay attention and soften their stance. On Thursday, Sao Paulo and Rio de Janeiro, the country’s two largest cities, both decided to backtrack and cancel the fare hike.

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Brazil: eager to explore new frontiers in Africa

June 13, 2013

Ruth Costas – BBC Brasil, 06/11/2013

The government and some large Brazilian companies are betting on the opening of new frontiers in the African market.

In recent years, Brazil has increased its economic presence both in Lusophone Africa – mainly Angola and Mozambique – as in South Africa (considered to be one of the more “mature markets” in the region along with North African countries.)

Now, explained Ambassador Paulo Cordeiro, secretary-general of the Ministry of Foreign Affairs for Africa and the Middle East, one of the greatest challenges for Brazilian diplomacy is to create the right conditions so that a growing number of companies explore new investment opportunities in emerging African markets, such as Ethiopia, Nigeria, Sudan, Kenya, Guinea, Tanzania, Senegal and Ghana.

“These efforts are a big part of my work. We are committed to creating the right environment for this expansion to take place, and to convince Brazilian society that the African continent has many interesting opportunities to offer- and not only in Portuguese speaking countries,” said Lamb.

Official initiatives range from programs for military and technical cooperation to projects for expanding the financing of investments in the continent as well as efforts for political rapprochement.

These initiatives work alongside some large Brazilian companies that have been actively seeking out business opportunities in countries that until recently were synonymous with conflict and extreme poverty, interested primarily in opportunities in the infrastructure and natural resources sectors.

According to Cordeiro, the decision announced by President Dilma Rousseff to forgive $900 million dollars of African debt took place amidst these expansion plans.


In total, 12 countries will benefit from President Rousseff’s decision: Congo, Tanzania, Zambia, Senegal, Ivory Coast, Democratic Republic of Congo, Gabon, Guinea, Mauritania, Sudan, Sao Tome and Principe and Guinea-Bissau –of which only the last two classify as Lusophone nations.

Until recently, Brazilian state-owned banks could not finance investments and trade flows to these countries because of their unsettled debts with Brazil.

This measure will allow the Brazilian Development Bank (BNDES) and Banco do Brasil to finance Brazilian exports as well as investments and infrastructure projects carried out by Brazilian companies (today, almost all BNDES loans for projects in Africa go to Mozambique and Angola.)

“The demand for investment and cooperation called for by African countries is immense,” said Cordeiro. “Tanzania wants Brazilian companies to help in the hydroelectric sector, for example, and Gabon seeks investments in oil. We also have many Brazilian companies interested in participating in this market – but we are still lacking the means to finance such projects.”

According to the Ambassador, in order to solve this problem, proposals were made to BNDES to create a board responsible solely for loans to Africa and Latin America.

“We need to think of appropriate financial instruments for these projects in Africa and understand what their guarantees could be,” stated Cordeiro.


Cordeiro points out that in the field of technical cooperation, the Brazilian Agricultural Research Corporation (Embrapa) already has projects in several African Countries – among them Senegal, Mali and Ghana. In addition, in terms of military exchange, there has been significant Brazilian participation in the training of Namibia’s Navy.

In the past three months, Dilma made three trips to Africa. Besides her trip to Ethiopia where she participated in the celebration of the African Union’s anniversary, she also went to Guinea Bissau in February to attend the third South America-Africa Summit and to Nigeria to meet with President Goodluck Jonathan.

In March, she attended the 5th BRICs summit in South Africa, taking the opportunity to also meet with leaders of other African countries.

Moreover, according to the Foreign Ministry (Itamaraty,) in recent years efforts have been made to expand the infrastructure of various Brazilian embassies in Africa, which more than doubled over the last decade, allowing Brazil to rank fourth, along with Russia, in terms of countries with the largest representation in the Continent (behind the United States, China and France.)

Translated from Portuguese

Original article here

Agriculture and food security: Brazil’s chance to assume leadership among the BRICS?

June 11, 2013

Oliver Stuenkel – Post-Western World, 06/09/2013

The stark differences between Brazil’s and India’s agricultural productivity and their differing positions during trade negotiations in the past years are an often used argument of why South-South cooperation will always be an elusive dream. And indeed, India has often been accused of being a nay-sayer in the realm of agriculture, even by its fellow emerging powers.

It may then come as a surprise that agriculture and food security are among the first topics that emerged when the BRIC grouping began to discuss ways to cooperate. In fact, during the first BRIC Leaders Summit in 2009 in Yekaterinburg, a separate declaration on food security was issued, underlining the importance of the matter.

In the document, the BRICs professed to be “committed to opposing protectionism, establishing a just and reasonable international trade regime for agricultural products, and giving farmers from developing countries incentives to engage in agricultural production.” The 2-page document argues that “the developed and developing countries should address the food security issue according to the principle of common but differentiated responsibility”, a concept that would become a trademark of future BRICS declarations, particularly in the field climate change. Finally, the BRICs signaled their interest in cooperating by “sharing the best practices of operating successful public distribution programmes.”

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