Brazil’s president seeks investment during U.S. visit

Paulo Trevisani – The Wall Street Journal – 6/29/2015

Brazil’s President Dilma Rousseff said Monday that a more business-friendly environment is needed in Latin America’s largest economy to attract the investment it needs to restore growth.

“We need to reduce the risks of doing business in Brazil,” she said in an interview in New York, as she began a visit to the U.S. aimed at drawing investors and to meet with President Barack Obama in Washington.

Her task is complicated by poor economic conditions at home. Annual inflation is running at 8.8% despite high interest rates, with the benchmark rate at 13.75%. Economists forecast an economic contraction this year. But Ms. Rousseff said Brazil still has strong fundamentals that should attract long-term investors.

Read more…

 

Brazil ministers rebut new wave of campaign funding allegations

Maria Carolina Marcello and Eduardo Simões – Reuters, 6/26/2015

Two Brazilian ministers denied on Friday that there was anything illegal about campaign donations made in recent years by a businessman allegedly involved in massive corruption scandal at state-run oil company Petrobras.

President Dilma Rousseff’s chief of staff, Aloizio Mercadante, denied that 500,000 reais ($159,908) in campaign donations made to him in 2010 by companies owned by Ricardo Pessoa were linked to kickbacks at Petrobras.

Social Communications Minister Edinho Silva said in a separate statement that 7.5 million reais donated by Pessoa to Rousseff’s presidential campaign last year were legal and approved by Brazil’s Supreme Electoral Court. Silva was the treasurer of Rousseff’s campaign.

Read more… 

A setback in Brazil

The Editorial Board – The Washington Post, 6/27/2015

Just a couple of years ago, it was widely concluded that Brazil had finally overcome the decades-old gibe about the world’s fifth-largest country: that it would always be “the country of the future.” Exports, particularly to Asia, were booming; a middle class was filling in the once-polarizing gap between the very rich and very poor; and huge offshore oil discoveries appeared to ensure yet another economic acceleration. In seeming confirmation of its new status, Brazil was chosen to host both soccer’s World Cup last year and the 2016 Olympics.

The Rio de Janeiro games are still a year away, but already Brazil’s bubble appears to have burst. The economy is mired in a deepening recession, thanks to the drop in oil and other commodity prices. The state oil company, Petrobras, has triggered the biggest corruption scandal in the country’s history, with dozens of businesspeople and more than 50 members of Congress implicated in some $2 billion in kickbacks. Investments in the vaunted new oil fields have been cut back, even as Brazilians fume over the billions spent on new stadiums.

Read more…

Small expectations between two big countries during Brazil’s official trip

Michael D. Mosettig – PBS, 6/26/2015

As official visits go, it has been an inauspicious scene-setting for next week’s trip of Brazilian President Dilma Rousseff to the United States and a Tuesday meeting with President Barack Obama.

First off, the trip is a re-do. Rousseff was supposed to be in Washington two years ago for a full-fledged, bells and whistles state visit. She abruptly cancelled after revelations that the National Security Agency had been tapping her phone. (The scandal was even more painful for the Boeing Company, which had been on the verge of winning a $4 billion contract to re-equip the Brazilian air force. The contract went to a Swedish company.)

In her country of 202 million people, Rousseff’s problems keep mounting. The national joke in Brazil is that her poll ratings (barely 10 percent) are one point ahead of the country’s inflation rate (8.4 percent). Brazil’s signature, state-dominated company, Petrobras, is engulfed in allegations that billions disappeared in kick backs to Rousseff’s Workers Party. Just last week, two of the country’s major industrialists were arrested. Neither Rousseff nor her highly popular predecessor and mentor Luiz Inacio Lula da Silva have been implicated so far, but the country is on edge against the possibility of the scandal spreading.

Read more…

Brazil leader’s credibility tested as she woos U.S. investment

Anthony Boadle – Reuters, 6/24/2015

The economy is sliding into recession, her popularity has hit rock bottom, her party’s treasurer is behind bars for alleged corruption and her enemies want to impeach her.

When she visits New York on Monday, President Dilma Rousseff will have a tough time convincing Wall Street her weakened government can pull Brazil out of a stall and save the once-booming nation’s investment-grade credit rating.

Many doubt her willingness to go to the mat against anti-austerity forces in her own leftist Workers’ Party to rein in the country’s gaping fiscal deficit.

Read more…

Brazil President’s approval rating hits record low

Rogerio Jelmayer – The Wall Street Journal, 6/21/2015

Brazilian President Dilma Rousseff’s approval rating dropped to a record low, poll results showed Sunday, amid the country’s sluggish economic performance and corruption allegations involving the state-run energy company.

According to a survey by the Datafolha polling institute, 10% of respondents said the Rousseff administration was “excellent or good,” compared with 13% in a poll published in April.

Meanwhile, around 65% of respondents said Ms. Rousseff’s administration was “bad or terrible,” up from 60% in the previous survey. That was the highest level since 1992, when President Fernando Collor de Mello received a 68% rating shortly before he was impeached.

Read more…

Brazil’s economy falters, but worse may be to come

Nicolas Bourcier – The Guardian, 6/9/2015

The signs that Brazil’s economy is in trouble have been visible for a while now, but the worst could be still to come. The figures published last month for gross domestic product in the first quarter of 2015 confirmed the absence of growth that has plagued Latin America’s powerhouse for the past five years.

With GDP down by 0.2% since the new year – a fall of 1.6% compared with the same period of 2014 – Brazil has registered its worst result in six years. Even if it has actually fared better than the 0.5% drop forecast by the markets, the outlook for the world’s seventh-largest economy nevertheless looks gloomy. The figures are bad enough to reduce the already limited room for manoeuvre available to the newly appointed and ever so orthodox finance minister, Joaquim Levy. Last month he announced far-reaching austerity measures, with cuts amounting to 69.7bn reals ($22.4bn), prompting an outcry from members of his own party, who want a more flexible line.

The government led by President Dilma Rousseff is expecting a 1.2% fall in GDP, higher than the 1% forecast by the International Monetary Fund. If the first forecast is right, it would be Brazil’s worst performance in the past 25 years. “Everyone was hoping that the economy would bottom out in the first quarter,” says economist Paulo Gala, “but confidence is still deteriorating, [and] the volume of road transport is plummeting, as are car sales. The recession seems to be deepening.”

Read more…