News from Brazil

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Brazil Politics & Regional News

In Brazil on August 10, 2012 at 10:25 am

POLITICS

President Dilma Rousseff continues to enjoy high popularity as Brazilian consumers remain largely unfazed by a recent economic slowdown and very optimistic about their country’s future. About 57 percent of those polled said they thought Rousseff’s government was either “great” or “good,” according to the survey by the National Transport Confederation, or CNT. That was up from 49 percent in the CNT’s last poll, released in August 2011 (Reuters).

The Brazilian government unveiled a big nationwide plan to help lessen the impact of natural disasters and improve risk management. Brazilian authorities have earmarked 18.8 billion reais (9.3 billion U.S. dollars) for the program, known as the National Plan for Risk Management and Response to Natural Disasters, which aims to improve government performance in disaster prevention, response and monitoring (Xinhua).

Six years after tougher laws were introduced in Brazil to stiffen the punishment for spousal abuse, thousands of women across the country continue to suffer from domestic violence each day, the government said (Xinhua)

The Brazilian Senate has approved a bill that reserves half the places in the country’s prestigious federal universities to state school students. African-Brazilian Senator Paulo Paim said most Brazilians would benefit as only 10% of students graduated from private schools. President Dilma Rousseff is now expected to sign the bill into law. But the measure has attracted criticism, as it also sets up quotas based on racial background (BBC).

It’s not unusual for Latin American countries to prosecute politicians for real or imagined corrupt practices: in fact, most new governments go after their political rivals from preceding governments as soon as they can. But Brazil is doing something much more noteworthy: it is prosecuting prominent leaders of the ruling party (Miami Herald).

As a truth commission begins examining the military’s crackdown on the population during a dictatorship that lasted two decades, Brazilians are riveted by chilling details emerging about the painful pasts of both their country and their president (The New York Times).

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INTERNATIONAL

Mexico could overtake Brazil as Latin America’s number-one economy in 10 years, according to research by economists at Nomura. Mexico could become a ‘jaguar’ economy, similar to the fast-growing ‘tiger’ economies of East Asia, if its newly-elected government succeeds in kick-starting lackluster growth with ambitious economic reforms, Nomura said (Reuters).

Guinea said it launched an investigation into violence near a large iron-ore mine project as a report seen by Reuters showed photos of five people rights groups said had been killed by security forces during a protest. The clashes between security forces and villagers demanding jobs took place last week in Zogota, where a joint venture between Brazil’s Vale, the world’s second largest mining company, and Israeli billionaire Beny Steinmetz’s BSG Resources (BSGR) is seeking to build iron an ore mine (Reuters).

Paraguayan interim President Federico Franco criticized that Venezuela’s recent entry into the Southern Common Market (Mercosur) had converted the trade bloc into a social club (Xinhua).

Brazil rejected claims that it received Paraguay’s share of energy from a joint hydroelectric plant for free. “There is no giving away. It is bought. This energy does not come to Brazil for free,” Foreign Ministry Spokesman Tovar Nunes said, adding that its purchasing of Paraguay’s excess energy was permitted in the Itaipu treaty signed in 1973, in which the two countries agreed to build the Itaipu dam of the power plant (Xinhua).

Brazil is the only country that in the last ten years has benefited from Mercosur with an intra-zone trade surplus of 36.8 billion dollars while the other three full members, Argentina, Uruguay and Paraguay have accumulated huge deficits in the same period, according to Argentine economist Orlando Ferreres a regular columnist from La Nacion with graduate studies in Harvard (MercoPress).

The array of aid projects and loans recently extended to African countries points both to Brazil’s ambitions of projecting greater influence in the developing world and to the expanding business allure of Africa, where some economies are rapidly growing even as parts of the continent still grapple with wars and famine. The charm offensive is paying off in surging trade flows between Brazil and Africa, growing to $27.6 billion in 2011 from $4.3 billion in 2002 (The New York Times).

DEFENSE & SECURITY

Brazil has reinforced its southern borders with 9,000 additional troops as the fifth stage of an ongoing crime-busting operation. The security reinforcement, officially named Operation Agatha 5, started on Monday and will last for 20 to 30 days along the nation’s borders with Paraguay, Argentina and Uruguay. The troops were backed by several helicopters, patrol ships, jets and armored vehicles (Xinhua).

Embraer Defense and Security has delivered four light attack and tactical training A-29 Super Tucano aircraft to Indonesia’s Air Force at a ceremony held in its facility in Gavião Peixoto, São Paulo, Brazil. Indonesia is the first operator of Super Tucano in the Asia-Pacific region (Embraer).

The strike declared by the Brazilian Federal Police is beginning to cause difficulties at international airports, delaying the crossing of visitors to neighbouring countries and some organized pickets have been marching in front of federal government offices (MercoPress).

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Brazil Business & Economy News

In Brazil on August 10, 2012 at 10:24 am

ECONOMY

A spike in food prices pushed up Brazil’s inflation rate in July but probably not fast enough to stop the central bank from cutting interest rates this month for the ninth straight time (Reuters).

An exchange rate of over 2 reais to the U.S. dollar lends competitiveness to Brazil’s industrial sector, Finance Minister Guido Mantega said (Reuters).

Brazil’s services sector shrank in July at the fastest pace in over three years, according to a private survey, raising doubts on whether the world’s sixth-largest economy will rebound as expected over the next months (Reuters).

Brazil’s economic growth will accelerate in the second half of the year, said Aldo Mendes, the central bank director for monetary policy (Bloomberg).

Some 58.2 percent of Brazilians use their monthly salary to pay off “installment debt,” according to a new survey by the Instituto Brasileiro de Economia (Brazilian Institute of Economics, Ibre-FGV). Yet the survey also showed most debts were short-term: 78.4 percent had installment repayment plans of six months or less, and only 10.1 percent had taken out plans for twelve months or more (The Rio Times).

Brazil should be able to achieve moderate growth in 2012, while most of the OECD’s 34 member economies will lose steam in the coming months, the economic grouping said (Xinhua).

DIRECT DATA

Check out the latest economic indicators in English directly at Brazil’s BCB or central bank, the Sao Paulo stock Eechange BM&F Bovespa and Brazil’s statistics institute, IBGE.

BUSINESS

Dutch food and chemicals group DSM has agreed to buy privately-held Brazilian animal nutrition company Tortuga for about 465 million euros ($578 million) to strengthen its presence in Latin America, making its fourth big acquisition (Reuters).

Realtime launched in the US and announced a $100 million investment to help the world transition from static to live web. Based in Brazil, Realtime has developed technology that enables the Internet to update instantaneously and continuously. Rather than a request-and-response protocol, Realtime is powered by  Open Real Time Connectivity. With ORTC,  applications can update directly from the server to the connected user without manually refreshing the page (Reuters).

Ivanhoé Cambridge, the real estate arm of Canadian pension fund Caisse de dépôt et placement du Québec, announced it is growing its commercial real estate portfolio in Brazil with a C$132.8 million ($132.9 million) investment in the country (Reuters).

Buyers of equipment made by Yingli Green Energy Holding Co., Suntech Power Holdings Co. and Trina Solar Ltd.  — three of the world’s four largest panel makers — aren’t eligible for loans at below-market rates from state bank BNDES. That leaves Campinas, Brazil-based Tecnometal Equipamentos Ltda. as the only maker of subsidized panels that turn sunlight into electricity (Bloomberg).

Arcadis NV, the largest Dutch designer of dikes that last week forecast 2012 profit from operations would rise 20 to 25 percent, acquired Brazil’s biggest water engineering and consultancy company. The company said it bought ETEP Consultoria, Gerenciamento e Servicos Ltda. to expand in the Brazilian water market (Bloomberg).

EBX Group has committed an investment of 6 billion U.S. dollars in ” high impact” projects in Malaysia in a move that could mark the beginning of strong economic ties between the two countries. Malaysia’s government announced this after EBX Group Chairman and Brazil’s richest man, Eike Batista, paid a courtesy call on Prime Minister Najib Razak at the latter’s office in Putrajaya (Xinhua).

An unreleased version of the ranking of billionaires in the magazine “Forbes” puts Eike Batista in a “technical tie” with businessman Jorge Paulo Lemann on the list of the richest people in the country (Folha).

AGRI ETC.

The Brazilian government lowered its forecast for the country’s cane crop this April-March season, while holding stable the view of its expected sugar output, which accounts for half of global exports of the sweetener (Reuters).

Brazilian sugar cane mills are vulnerable to a wave of takeovers in which deep-pocketed groups devour fragile neighbors, while soft sugar and ethanol prices weaken small mills and make building new ones too costly, industry analysts said (Reuters).

Brazil set a minimum price of 10.10 reais ($4.96) per 40.8-kilogram box of oranges in an attempt to help farmers sell excess production profitably. The excess production will be sold through auctions, the Agriculture Ministry said. Brazil wants to develop the domestic orange juice market, said Jose Carlos Vaz, the ministry’s executive secretary (Bloomberg).

Brazil will reap a record grain harvest of 163.3 million tons this year, a gain of two per cent over 2011, the IBGE statistics agency says. The IBGE’s latest forecast, based on July data is 1.6% higher than the previous projection (MercoPress).

Prices of Brazilian crop land have soared 18% in the past year, to judge by data from one of the country’s biggest agricultural groups, which revealed plans to take sowings nearly to 300,000 hectares, according to Agrimoney.com (MercoPress).

AUTOMOTIVE

Japanese automaker Toyota said it will invest about 1 billion reais ($494 million) to build a new Brazilian engine factory supplying local car plants, bringing more of its supply chain to Brazil under government pressure (Reuters).

General Motors Co and a Brazilian union have agreed to postpone until November a politically sensitive decision to eliminate as many as 1,840 jobs at a factory near São Paulo (Reuters).

BANKING & FINANCE

Net income at BTG Pactual , Brazil’s sole listed investment bank, more than doubled in the second quarter as successful bets on principal investments helped offset a surge in payroll and operational expenses (Reuters).

State-run bank Caixa Econômica Federal plans to increase its loan book by a whopping 42 percent this year, expanding mortgage and consumer lending as state and private- sector rivals retrench, Chief Executive Jorge Hereda said (Reuters).

Brazil bulls. They do exist. Beyondbrics has found one in the form of Caixa Economico, the Brazilian bank wholly owned by the government.

Bank of America Corp has plucked four Brazilian employees from Morgan Stanley, including the new head of its equities business in Latin America (Reuters).

Itau Unibanco is considering a bid for Citizens, the American unit of British state-controlled lender Royal Bank of Scotland , the Sunday Times reported (Reuters).

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MINING & STEEL

Vale SA forecasts it will miss base- metals output targets for a second year, fueling calls from analysts for the company to sell at least part of the business plagued by strikes and sinking prices (Reuters).

OIL & GAS

Petrobras has not received approval for additional increases in domestic fuel prices and there is no increase “on the horizon,” Finance Minister Guido Mantega, who is also chairman of the Petrobras board, said (Reuters).

Singapore’s Keppel Corp , the world’s biggest oil rig maker, said its Brazil unit FELS Brasil S/A has secured two contracts worth a total of about $950 million from Petrobras-led consortiums Guara BV and Tupi BV (Reuters).

Sembcorp Marine Ltd, the world’s second-largest oil rig builder, said it has secured contracts worth about $4 billion from Sete Brasil, highlighting Brazil’s push to become one of the world’s three largest oil producers (Reuters).

OGX Petroleo e Gas SA , Brazil’s No. 2 oil company by market value, restarted output over the weekend at an offshore well northeast of Rio de Janeiro where production was suspended in June, a company spokesman told Reuters.

Petrobras revealed its first quarterly loss in 13 years. In dollar terms, Petrobras lost $685 million, compared with profits of more than $5 billion in the first quarter. It is a considerable accomplishment for an oil company to lose hundreds of millions of dollars during a quarter when crude prices are over $100 a barrel. Indeed, a closer look shows the results for what they are; a damming indictment of Brazil’s oil policy, which is sending Petrobras down the route of debt and financial losses that have long been the curse of Mexico’s state oil monopoly, Pemex (Reuters).

From it’s multi-billion dollar secondary share offering a few years back that spooked investors worried about the government controlling even more of the company while it diluted shares of minority holders, to the government keeping a lid on fuel prices that capped profits, Petrobras is the class state run entity. It doesn’t exist to make shareholders profits. It exists for the commonwealth (Forbes).

PORTS & LOGISTICS

Australian industrial property developer Goodman Group wants to enter the Brazilian market to tap strong demand for high-quality warehouses, and will likely make an announcement on such a move later this year (Reuters).

Brazilian soy and corn exporters are seeking help from the local courts to guarantee clearance documents from striking inspection agents at the country’s main ports, the grain exporters association Anec said (Reuters).

Brazil Weekly’s Brazil Regional & Culture News

In Brazil on August 10, 2012 at 10:23 am

PROJECT OF THE WEEK

Render of the Impacto Empresarial business tower for Vitoria, Espirito Santo state (Skyscrapercity).

BRAZIL WEEKLY’S BRAZIL’S NEXT 10 HOTTEST BUSINESS CITIES

No doubt the biggest and most important business centres of Brazil are the megacities of Sao Paulo and Rio de Janeiro and do not forget most other state capitals like Belo Horizonte, Salvador da Bahia, Recife, Fortaleza, Curitiba and Porto Alegre.  But Brazil is big and there are plenty of other fast developing cities, not being state capitals. So for a minute forget Sao Paulo, Rio and those other 2014 World Cup host cities and check out Brazil Weekly’s Brazil’s Next 10 Hottest Business Cities.

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CULTURE

As Brazil celebrates the centenary of his birth, Amado is remembered as one of the country’s most important, and best-loved writers, famous not only at home but internationally. His vivid portrayal of his fellow countrymen and women struck a chord, and he created characters who captured the popular imagination. Translated into 49 languages and published in 55 countries, his books reflect Brazil’s culture, inequalities and contradictions (BBC).

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FIFA WORLD CUP 2014

Brazil has begun approximately 60.7% of the 12bn reais (US$5.89bn) in urban transportation projects planned as part of preparations to host the 2014 World Cup. Investments totaling 7.28bn reais are underway, according to the federal government’s latest World Cup progress report (BN Americas).

TRAVEL & TOURISM

Hotels profitability rose to a record in Brazil last year as rates jumped 17 percent, underscoring the need for tourism infrastructure investment amid growing inflow of visitors, a report by Jones Lang LaSalle Inc.’s hotel consultancy unit and Brazil’s Hotel Operators Forum show (Bloomberg).

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AMAZON

A federal judge in Brazil has ordered iron-ore giant Vale to suspend work on part of a $4.1 billion logistics plan which is considered crucial to the company’s goal to increase output at its main production site. Work on doubling the Carajas railway, which connects the company’s single largest iron-ore mine to the Ponta de Madeira seaport in the state of Maranhao, was halted after local human rights groups pointed to procedural shortcomings in the environmental licensing process (Reuters).

It was the job of Ibama, Brazil’s widely respected federal environmental agency, to police the Amazon as best it could. But last year, President Dilma Rousseff authorized a change that ceded much responsibility for environmental oversight to local officials. Of 168 Ibama field offices operating a few years ago, 91 have been shuttered (Reuters).

MATO GROSSO

A federal court has banned the construction of a planned light-rail system in Cuiaba, a World Cup host city in Brazil. The federal prosecutor’s office in Mato Grosso state said on its website that investigators found “irregularities in the choice of the system and in the viability of the project” (Washington Post).

The city of Cuiabá in the Midwestern state of Mato Grosso had been engaged in a years-long tug-of-war over whether it should accommodate the crowds with a bus rapid transit system or a light rail system (Atlantic Cities).

RIO

With residents of several favela communities in Rio de Janeiro facing resettlement and others having already been removed from their homes to make way for 2016 Olympic infrastructure development, the longstanding community of Vila Autódromo is pushing back with their Plano Popular da Vila Autódromo (The Rio Times).

Starbucks first opened their doors for business in Brazil back in December 2006 starting off in São Paulo and since expanding to several cities across the country. The latest venture has been in Rio de Janeiro, with the arrival of Starbucks in Ipanema on Rua Visconde de Piraja (The Rio Times).

Construction is underway on Ponte Estaiada do Fundão, a Cable-Styled bridge that will span 400m across Guanabara Bay between Ilha do Fundão and Ilha do Governador in Zona Norte (North Zone). Leaving the existing access for passenger cars, the new bridge will be exclusively for Bus Rapid Transit (BRT) buses as part of the Transcarioca corridor (The Rio Times).

Part of what makes Rio de Janeiro such a beautiful city is its exquisite location between the mountains and the ocean, but while the beach fronts have been widely explored, the same is not true for the views from the hills. Alto Leblon is an exception to the rule, a neighborhood lodged on the side of the mountain Morro Dois Irmãos (Two Brothers’ Hill), Alto Leblon combines nature, views and the perks of Leblon (The Rio Times).

SAO PAULO

Europe’s largest hotel group, Accor, and Brazilian conglomerate Odebrecht have partnered to build three hotels in Sao Paulo state, eyeing growth in South America’s biggest city and Brazil’s burgeoning oil industry. The partnership will open one hotel in the city of Sao Paulo and two in coastal Santos, a hub for Brazil’s offshore oil boom, in 2015 and early 2016 (Reuters).

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Brazil Politics & Government News

In Brazil on August 3, 2012 at 10:28 am

POLITICS

Brazil’s Supreme Court has opened the trial of 38 people in a corruption case that rocked the government of then-President Lula, in 2005. The defendants are accused of involvement in a scheme that used public funds to pay coalition partners to support the government’s agenda (BBC).

BBC Brasil explains the background: What exactly was the “mensalao” scandal?

Seven years after a corruption scandal rattled the government of former President Luiz Inacio Lula da Silva, Brazil’s Supreme Court on Thursday began a landmark trial that could mar the wildly popular leader’s legacy. Brazilians still don’t know the extent of the infamous “mensalão” scandal, an alleged scheme to pay legislators a monthly retainer in exchange for their support in Congress (Reuters).

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INTERNATIONAL

Venezuela has joined Mercosur, six years after first applying to join the South American trading bloc. President Hugo Chavez went to Brazil for the ceremony, in his first official trip abroad since being diagnosed with cancer more than a year ago (BBC).

President Chavez said his country might sell crude oil to Brazil, which may in turn sell commercial aircraft to the Andean nation, as part of renewed trade ties between
the two countries (Reuters).

Paraguay has contested Venezuela’s Mercosul membership, winning support from top Uruguayan officials and Brazil’s opposition, who say Chavez’s human rights record and seizure of foreign-owned companies is anathema to a group founded to promote democracy and trade (Bloomberg).

But Argentine President Cristina Fernández said during a press conference held at the Mercosur extraordinary summit in Brasilia, that Venezuela’s entry to the bloc “strengthens the entire region” and creates a “new pole of power” at world level (MercoPress).

If there is any winner in Venezuela’s entry into Mercosur, it will be Brazil, and to a lesser extent, Argentina. They will both be able to sell food and manufactured goods to Venezuela at preferential tariffs (Miami Herald).

The Brazilian economic juggernaut has slowed this year, but Florida’s trade with Brazil still shows growth (Miami Herald).

DEFENSE & SECURITY

Brazil will help Haiti form a defense force that can eventually take over from the UN peacekeeping mission. Brazilian Defense Minister Celso Amorim announced the decision during a meeting with his Haitian counterpart Jean Rodolphe Joazile. He said the Brazilian government would send a military mission to determine how Brazil could help the Caribbean country (Xinhua).

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SOCIAL

There are about 1.3 million Brazilians dependent on marijuana, according to the 2nd National Survey on Alcohol and Drugs (Folha).

Brazil Business & Economy News

In Brazil on August 3, 2012 at 10:27 am

ECONOMY

According to economists, political experts and business figures, the current blip in the Brazil’s financial progress will be short-lived, and booming growth will be back in the next few years. New predictions show the country overtaking European powerhouse Germany to be the world’s fifth largest economy by 2022 (The Rio Times).

Brazil’s industrial output edged up less than expected in June after three straight months of decline, suggesting the central bank may need to take more action to boost the country’s lagging manufacturing sector. Industrial production expanded 0.2 percent in June from May , government statistics agency IBGE said (Reuters).

Brazil’s trade surplus widened in July to $2.879 billion as imports fell sharply  from the previous month due to the global economic slowdown and a weaker local currency, the Trade Ministry said (Reuters).

Brazil’s primary budget surplus is expected to grow in coming months as an increase in economic activity helps contribute to higher government revenues, the central bank said (Reuters).

Thanks to sound policies and built-in cushions, Brazil’s financial system weathered the global crisis that began in 2008 remarkably well, but now policymakers need to monitor for signs of home-grown financial trouble, the IMF said in its later report (MercoPress).

Economists raised their forecasts for inflation this year to 4.98 percent from 4.92 percent in the prior week as recent price indexes showed a spike in food costs. The outlook for Brazil’s economic growth in 2012 remained at 1.9 percent, according to the survey (Reuters).

Brazil’s booming job market is still creating jobs, but not at the the pace it once was.  Data released by the Labor Ministry showed that the once hot job market is now actually cooling off (Forbes).

Brazil’s franchise industry is booming. The Brazilian Association of Franchising states that the sector has been growing 10% to 13% annually for the past decade. This year, Brazil’s franchising industry is expected to grow profits 15%, while the total number of franchise should rise by a further 10% to 2,031 brands (Forbes).

The lack of internal savings, which restricts the country’s capacity to invest in crucial pillars for long-term growth — such as education an infrastructure –, is the biggest obstacle to economic development. This is the opinion of Eduardo Giannetti, 55, an economist, philosopher and professor at Insper. This historic problem is camouflaged by a layer of expansion of consumption, and it is far from being solved (Folha).

The Olympus Corporation, a maker of scientific imaging equipment and cameras, uncovered “irregularities” at a doctor-training program in Brazil, the chairman said (New York Times).

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BUSINESS

Dutch shareholders will seek compensation from the owner of coffee brand Douwe Egberts after it issued a profit warning citing fraud, tax and inventory problems in Brazil, just three weeks after listing on the Amsterdam stock market. The Dutch Association of Shareholders (VEB), which mainly represents individual investors, said it will demand redress from coffee company D.E Master Blenders 1753, its former parent Hillshire Brands, and two advisors (Reuters).

Eike Batista, facing tumbling confidence among investors in his energy and mining conglomerate, said he will delist logistics company LLX Logistica SA (Reuters).

Forbes comes up with four reasons why investors and entrepreneurs alike should be keeping an eye on Brazil – the sixth-largest economy in the world – and its hot mobile scene.

AGRI ETC.

Despite a drop in soybean output, the country is harvesting a record corn crop, which is expected to boost this year’s exports to unprecedented levels. Prices are meanwhile rocketing into record territory due to drought in the U.S. farm belt (Reuters).

The worst U.S. drought in more than half a century will spur Japan, the world’s biggest corn importer, to buy a record amount from Brazil after record prices increased costs for feed makers and meat producers (Bloomberg).

The Brazilian government will spend 30.4 million Reais (15.05 million dollars) to buy 76,000 metric tons of excess live swine, through a minimum-price plan created to help Brazilian producers get out from under a national oversupply of pork, the Ministry of Agriculture announced (MercoPress).

AUTOMOTIVE

French automaker Renault SA said it plans to expand the capacity of its Brazilian motor plant by 25 percent by 2013, extending a string of recent investments despite concerns about rising costs in Latin America’s largest economy. Olivier Murguet, the company’s top executive in Brazil, noted that increasing costs were eroding the competitiveness of manufacturing in the country and raising doubts about future investments (Reuters).

Brazilian auto sales set a second straight monthly record in July, an industry source with access to sales data said, as tax breaks and lending incentives helped the car industry turn the corner on a weak first half. Sales of cars and light trucks climbed 22 percent in the month from a year ago to some 351,000 vehicles, up 3 percent from a record June to the best July ever (Reuters).

AVIATION

Brazilian plane maker Embraer is facing rising pressure to lower the price of  its regional E-Jets to land new orders, its chief executive said, as a weaker global economy and stiffer competition drag on sales (Reuters).

Embraer announced an agreement with Venezuela’s Conviasa Airlines for the sale of six Embraer 190 jets. The deal also includes 14 purchase options for the same aircraft model. The value of the order, at list price, is USD 271.2 million, based on January 2012 economic conditions, and could total as much as USD 904 million, if all of the options to buy are confirmed. The first deliveries are scheduled to take place by the end of 2012 (Embraer).

BANKING & FINANCE

Brazilian-Swiss private bank Safra said it had successfully completed  its acquisition of Dutch cooperative Rabobank’s stake in Bank Sarasin, taking  control of its Swiss rival (Reuters).

Brazil’s state development bank BNDES plans to speed up the pace of loan disbursements through 2015 to help kick-start economic growth (Reuters).

MINING & STEEL

Robust output and sales in Brazil helped steelmaking giant Gerdau post second-quarter net income that beat analysts’ estimates, as the world’s No. 2 producer of long steel products foresees a gradual recovery in its home market (Reuters).

Brazilian mining regulator DNPM reduced the past royalties bill it considers  owed to the government by miner Vale by 600 million reais ($300 mln), a high  level source in the agency said (Reuters).

Anglo American Plc, proposing to spend as much as $100 billion on doubling mine output, met President Dilma Rousseff to seek an end to obstacles facing the industry as delays at its largest project worsened. “These are blockages that we didn’t anticipate,” Chief Executive Officer Cynthia Carroll, who held talks with Rousseff. Anglo posted a 46 percent drop in first-half profit and now expects its Minas-Rio iron-oreproject to start shipments in the second half of 2014 or later, after targeting the last six months of 2013 (Bloomberg).

OIL & GAS

Petrobras and BP found oil in a deep-water offshore well in a new ar ea for exp loration off Brazil’s northeast coast, the company said in a securities filing (Reuters).

Brazil’s oil and natural gas output fell 2.9 percent in June to an average of  2.486 million barrels a day as rising gas production failed to compensate for a  decline in crude oil volumes, the ANP, Brazil’s petroleum regulator said (Reuters).

A Brazilian court has ordered Chevron Corp and Transocean Ltd to suspend all oil  production and transport operations in Brazil while prosecutors investigate a November oil spill, a decision that could halt nearly 10 percent of all offshore drilling operations in South America (Reuters).

Petrobras imported 13 percent more gasoline in the first half of 2012 than a year earlier, Chief Executive Officer Maria das Graças Foster told Reuters.

Solange Guedes, executive manager of Petrobras Exploration and Production, announced that they will invest US$5.6 billion in the Programa de Aumento da Eficiência Operacional da Bacia de Campos (Program for Increasing Operational Efficiency in the Campos Basin, PROEF) by 2016 (The Rio Times).

Brazil Weekly’s Brazil Travel & Regional News

In Brazil on August 3, 2012 at 10:26 am

PROJECT OF THE WEEK

Render of the Tarik Business Hotel for Itabuna, Bahia (Skyscrapercity).

BRAZIL WEEKLY’S BRAZIL’S NEXT 10 HOTTEST BUSINESS CITIES

No doubt the biggest and most important business centres of Brazil are the megacities of Sao Paulo and Rio de Janeiro and do not forget most other state capitals like Belo Horizonte, Salvador da Bahia, Recife, Fortaleza, Curitiba and Porto Alegre.  But Brazil is big and there are plenty of other fast developing cities, not being state capitals. So for a minute forget Sao Paulo, Rio and those other 2014 World Cup host cities and check out Brazil Weekly’s Brazil’s Next 10 Hottest Business Cities.

SPLIT SECOND POLL

YOUR AD ON BRAZIL WEEKLY

Soon it will be possible to place your ads on Brazil Weekly. Write us for the options.

SUBSCRIBE, IT’S FREE!

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Brazil Weekly is also Facebook. You can like us here and join our group there.

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And be very welcome to join the Brazil Weekly networking and discussion group on Linkedin: Click here to join.

FIFA WORLD CUP 2012

Brazilian organizers of the 2014 World Cup on Wednesday unveiled an online catalogue of training centres selected to accommodate the 32 teams that will compete in the high-profile event (Yahoo).

AMAZON

Violent disputes over indigenous land are on the rise in Brazil, sparking heightened militancy by natives angered by broken promises of compensation and slower government registrations (MercoPress).

Deforestation in the Brazilian Amazon rainforest fell 23 percent in the 12 months ending in July 2012 from the previous year, the Brazilian government announced (Xinhua).

A federal judge has ordered Brazilian mining company Vale to suspend its planned expansion of a rail line in northern Brazil because it would endanger the livelihood of an Indian tribe living in the region (Washington Post).

NORTH EAST

The number of tourists staying at hotels in São Luís (Maranhão) during this year’s high season – famous for the June festivals, the bumba meu boi parades and vacations – has plunged. The sector blames the dirty beaches (Folha).

RIO

Growing businesses, beautiful beaches and affordable housing have many home-buyers taking a closer look at Niterói, the city across the bay. Accessible from Rio via the Rio-Niteroi bridge and two ferry services, Niterói is perhaps best known for its iconic landmark, the Museu de Arte Contemporânea (The Contemporary Art Museum) (The Rio Times).

Facing its more famous partner across the Guanabara Bay, the city of Niterói hosts a vibrant fish market with one key added allure: you can eat your ‘catch’ there.  For foodies and hunters of Brazil’s more authentic side, a trip to the daily São Pedro fish market provides an excellent opportunity for a culinary adventure off the beaten tourist path (The Rio Times).

The Secretary of State for the Evironment (SEA), the State Environmental Institute and the Chico Mendes Institute signed the Termo de Ajustamento de Conduta (TAC), to regulate the air-taxi company Helisul. The objective of the agreement is to stem the noise pollution created by frequent helicopter flights over Rio’s scenic areas, a large concentration of which are in the Zona Sul (South Zone) (The Rio Times).

A new exhibition brings together Salvador Dalí images at Caixa Cultural Rio de Janeiro. Come take a journey into the subconscious world of dreams with “Dalí: The Divine Comedy”. The show brings together 100 pictures by surrealist painter Salvador Dalí, depicting scenes from the acclaimed literary work “The Divine Comedy”, by Dante Alighieri. The story leads the audience into Heaven, Hell and Purgatory, through the vision of these two artists (Rio Official Guide).

SAO PAULO

Inflation in Sao Paulo, Brazil’s largest city, posted an unexpected slowdown in July as a spike in food prices lost momentum and apparel costs declined from the prior month. The IPC-FIPE index rose 0.13 percent last month, compared with an increase of 0.23 percent in June (Reuters).

All mobile numbers in São Paulo starting with “11″ should now be dialed with an additional 9 before the regular number (+55) 11-9-XXXX-XXXX.  This change increases capacity to a limit of ninety million numbers, from the current 44 million, according to ANATEL (Agência Nacional de Telecomunicações, National Telecoms Agency) (The Rio Times).

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Brazil Politics & Government News

In Brazil on July 27, 2012 at 10:15 am

POLITICS

President Dilma Rousseff is pessimistic about Brazil’s chances for a meaningful economic recovery this year and is pushing ahead with new measures aimed at lowering taxes and increasing investments, hoping they might give the economy a lift by 2013, government officials told Reuters.

The high cost of doing business in Brazil is a longstanding complaint among, well, pretty much anyone who does business in Brazil. Now the government is trying to chip away at one piece of the so-called Brazil cost: electricity rates that rank among the highest in the world (Bloomberg).

The trial, due to start on August 2nd, of 38 people accused of involvement in Brazil’s biggest corruption scandal of recent years is a rarity. The central accusation in the “mensalão” (big monthly stipend) case is that, after coming to power in 2003, the Workers’ Party (PT) diverted money from the advertising budgets and pension schemes of state-controlled firms to pay off legislators from allied parties, in return for their support. The allegations first surfaced in 2005, and the Supreme Court took on the case in 2007. Only now are the judges ready to try it (The Economist).

Brazil’s civil servants haven’t gotten President Dilma Rousseff’s message. A slowing economy, dwindling tax revenue and falling demand for the country’s commodity exports mean the government must tighten its belt, she argues. But customs workers, university professors and myriad other federal employees are staging strikes across the country, pushing for salary increases worth 92 billion reais ($45.3 billion) (Reuters).

Brazil’s federal tax revenues dropped more than expected in June from the same period a year before, as a stubborn economic slowdown hurts corporate profits and prompts the government to grant tax breaks to some industries (Reuters).

Leonardo Rolim, Brazil’s Secretary of Social Security, said during a press conference in Brasilia that total outflow this year was more than R$100 billion (about $50 billion), the most ever. The value includes Brazil’s base line social security program, known as INSS (R$60 billion) and government employee pensions taking up the rest.  The deficit increased by around R$2.75 billion in June. The total deficit in the social security program is expected to be R$38 billion by year’s end (Forbes).

The Brazilian government questioned as outdated the latest IMF report, released Friday July 20, in which the Fund calls for more domestic savings and greater attention to inflation (MercoPress).

INTERNATIONAL

Brazil’s Foreign Ministry removed nearly all its diplomats from the Brazilian embassy in Syria because of heavy fighting in Damascus. Itamaraty (the Brazilian Foreign Ministry) said in a statement diplomats were moved to Beirut, Lebanon, due to the “deteriorating security situation” (The Rio Times).

Exports from Brazil to countries in Africa have increased five percent year-on-year, totaling US$5.53 billion in the first half of 2012. The figures mean demand from Africa now outstrips that from the Middle East, and the total is also greater than Brazilian exports to Germany and France combined, O Globo newspaper reports (The Rio Times).

Brazil discusses with Chavez arrangements for Venezuela’s Mercosur incorporation. The Venezuelan President met with a committee from the Brazilian government to discuss mechanisms to speed the full integration of the country to the regional block. Brazil currently holds the Mercosur rotating chair (MercoPress).

The Bully from Brazil? South America’s superpower is shoving its weight around across the continent — and the natives aren’t exactly thrilled (Foreign Policy).

President Dilma Rousseff held talks with British Prime Minister David Cameron to pick up some tips on staging the 2016 Olympic Games in Rio de Janeiro (MercoPress).

Brazil’s delegate before the World Trade Organization said he was contacting other members of the organization so that sanctions are imposed on those countries which alter artificial money exchange rates that harm emerging countries (MercoPress).

Brazil’s influential newspaper O Estado de Sao Paulo blasted Brazilian foreign policy and its handling of the Paraguayan political crisis. In an opinion column under the heading “Dilma’s anti-diplomacy” the newspaper argues that the current administration is politicizing foreign policy, the same way that her predecessor, Lula da Silva (MercoPress).

Ambassador to Ghana, Irene Vida Gala announced that Brazil has plans to make available a 96-million-dollar loan facility to boost small-scale and rural farming in Ghana to help increase food production and subsequently improve the country’s bread basket (MercoPress).

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DEFENSE & SECURITY

The Agreement on Cooperation in Defence Field between Angola and Brazil establishes a range of actions, covering areas such as defence, polity, teaching and instruction, military intelligence, military equipment and systems, peacekeeping missions, humanitarian operations, search and rescue operations, among others. The agreement also expects the training of military and technical personnel, implementation and development of programmes and projects for the application of defence technologies, conduction of scientific research and promotion of military training activities (MercoPress).

The process to replace Brazil’s Presidency’s aircraft fleet with new models will be complete in 2013, when the second VH-36 Caracal helicopter will arrive at the Brazilian Air Force’s GTE (Special Transportation Group). The first unit was delivered last week and used by President Dilma Rousseff for the first time two days ago. The model, a VIP version of the medium transportation EC-725 helicopter made by France’s Eurocopter, is part of the delivery schedule established in the Brazil-France military agreement signed in 2009 (Folha).

SOCIAL

In a study The Price of Offshore Revisited, commissioned by the Tax Justice Network (TJN), it was estimated that Brazil’s richest have approximately US$520 billion worth deposited in tax havens. Brazil comes in fourth place only after China (US$1.18 trillion), Russia (US$798 billion) and South Korea (US$779 billion) (The Rio Times).

In 1996, Brazil was the first developing country to commit to free and universal access to the anti-retroviral drugs needed to treat HIV. It has also challenged patents on key treatments to ensure access to cheaper generic medicines. With high-profile safe sex campaigns and free distribution of condoms at events such as carnivals, Brazil was praised for its approach. The World Bank predicted in 1992 that Brazil would have 1.2 million cases by 2000, but in fact the authorities report approximately half that number today (BBC).

Brazil Business & Economy News

In Brazil on July 27, 2012 at 10:15 am

ECONOMY

Ruchir Sharma argues in Foreign Affairs (“Bearish on Brazil,” May/June 2012) that Brazil’s incredible rise over the past ten years has depended on the sale of commodities, and that as commodity markets begin to slow, so, too, will Brazil’s growth. Sharma correctly notes that in the coming years, Brazil will likely need to confront a decline in commodity purchases from China. But he fails to recognize that economic stability has also driven Brazil’s growth. Read the reply by Shannon O’Neil at Foreign Affairs.

A rebound in Brazil’s foreign direct investment in June fully covered a widening current account deficit, central bank data showed, underscoring the resilience of foreign investment even as the international and local economy slow sharply (Reuters).

The Brazilian economy is on its way to recovery, with recent interest rate cuts and stimulus measures expected to lead to greater growth in the second half of 2012, central bank president Alexandre Tombini said (Reuters).

Fitch affirms Brazil’s ratings at ‘BBB’, outlook is stable (Reuters).

The release of Brazil’s unemployment rate for June was postponed due to a civil servants’ strike, the national statistics agency IBGE said (Reuters).

Lending in Brazil grew at the slowest pace in four months in June as private sector lenders put the brakes on credit disbursements to arrest a surge in delinquencies (Reuters).

Consumer confidence in Brazil fell for the third consecutive month in July, as Brazilians grew increasingly dissatisfied with current economic conditions and less optimistic about the near future. Brazil’s consumer confidence index fell to 121.6 in July from 123.5 in the prior month after seasonal adjustments, private research institute Fundação Getúlio Vargas said (Reuters).

DIRECT DATA

Check out the latest economic indicators in English directly at Brazil’s BCB or central bank, the Sao Paulo stock Eechange BM&F Bovespa and Brazil’s statistics institute, IBGE.

SPLIT SECOND POLL

BUSINESS

The BNDES has approved financial support for Recepta Biopharma S.A. in the amount of R$ 28.9 million. The company employs biotechnology to produce pharmaceutical products used in treating cancer, a high-tech sector with the potential to generate benefits for society as a whole. BNDESPAR, the BNDES’ corporate shareholding arm, will subscribe the company’s shares, holding a part of its capital (BNDES).

AUTOMOTIVE

The Brazilian subsidiary of General Motors Co. says it has temporarily shut down its eight production units near Sao Paulo amid fears of unspecified action by a local union that warns of imminent mass dismissals (Washington Post).

AVIATION

Boeing Co. ’s Brazilian unit, Boeing do Brasil, expects to sell more than 1,000 aircraft in the South American country by 2032, equivalent to 40 percent of potential sales to all of Latin America, O Estado de S. Paulo reported, citing an interview with the unit’s chief executive officer, Donna Hrinak (Bloomberg).

BANKING & FINANCE

Redpoint e.ventures, the Brazilian venture-capital firm created by Redpoint Ventures and e.ventures, said it had raised $130 million for its inaugural early-stage fund (Reuters).

Brazil’s bank giants are putting prudence before politics. Itau and Bradesco are slowing consumer lending as loan defaults climb. The move runs counter to the wishes of President Dilma Rousseff, who is pressuring the nation’s banks to lend more at rock-bottom rates. But with consumers and the broader economy under pressure, a dose of financial conservatism is welcome (Reuters).

Brazilian companies are canceling initial public offerings at the second-highest rate among the biggest emerging markets as slowing economic growth makes the country’s benchmark stock index the worst performer this year (Bloomberg).

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OIL & GAS

The chief executive of Petrobras , Maria das Gracas Silva Foster, will take over direct management of the firm’s international operations, following the resignation of the current head of the unit, Jorge Luiz Zelada (Marketwatch).

PORTS

The newest addition to Rio de Janeiro state’s Superporto do Açu will be where Norwegian company Subsea 7 plans to begin manufacturing oil and gas pipelines in 2014. The R$21 million-per-year lease was signed following Subsea 7’s withdrawal from plans to build the project in the southeastern state of Paraná, where difficulties in obtaining an environmental license blocked the company’s first choice of location (The Rio Times).

Brazil Weekly’s Brazil Tourism and Regional News

In Brazil on July 27, 2012 at 10:13 am

PROJECT OF THE WEEK

Both neighborhood locals and the staff of the Museum of Image and Sound (MIS) are keenly awaiting the cultural institution’s move to Copacabana, but construction setbacks and rising project costs have delayed the relocation (The Rio Times).

BRAZIL WEEKLY’S BRAZIL’S NEXT 10 HOTTEST BUSINESS CITIES

No doubt the biggest and most important business centres of Brazil are the megacities of Sao Paulo and Rio de Janeiro and do not forget most other state capitals like Belo Horizonte, Salvador da Bahia, Recife, Fortaleza, Curitiba and Porto Alegre.  But Brazil is big and there are plenty of other fast developing cities, not being state capitals. So for a minute forget Sao Paulo, Rio and those other 2014 World Cup host cities and check out Brazil Weekly’s Brazil’s Next 10 Hottest Business Cities.

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TRAVEL & TOURISM

BHG, Brazil Hospitality Group, maintains its expansion pace and announces two new Tulip Inn hotels. According to its strategy of investing in cities with strong demand and potential for tourism business growth, BHG has announced the development of hotels in Itaboraí (RJ) and Sete Lagoas (MG) (BW).

The day when Brazilians can travel to the U.S. without a visa may be getting closer. Brazil and the United States agreed to set up a working group to study visa waivers (Miami Herald).

SPLIT SECOND POLL

RIO

The Rio de Janeiro’s Olympics in four years will be modeled on London 2012 more than Beijing but will not really resemble either, the man whose brief includes steering one of the most crucial phases of Brazil’s development, said (Reuters).

An attack by suspected gang members in the Complexo do Alemão favela community in Zona Norte (North Zone) resulted in the death of a police officer, the first to be killed in a pacified favela. Officer Fabiana Aparecida de Souza, age 30, at the Nova Brasília UPP (Police Pacification Unit) was fatally shot during a firefight Monday, July 23rd (The Rio Times).

The number of burglaries and vehicle thefts in Rio de Janeiro has risen dramatically in the first half of 2012, with car thefts up 27.4 percent and residential burglaries witnessing an increase of 21.6 percent for the six-month period (The Rio Times).

Eduardo Paes appears to be heading for re-election as Rio Mayor after an opinion poll gave him a 54-percent share of the vote. The Datafolha poll, commissioned by Folha de São Paulo newspaper and TV Globo, asked 927 people how they intended to vote in the upcoming municipal elections in October (The Rio Times).

SAO PAULO

Murders and robberies are soaring in Sao Paulo, Brazil’s biggest city and financial capital, in a crime wave that could further hurt the local economy and have national political implications. Sao Paulo had 622 homicides in the first six months of the year, a 21 percent increase over the same period of 2011, according to government data released this week. Armed robberies grew 8 percent, and are now occurring at the rate of 319 a day in the city of more than 11 million people (Reuters).

The President of Investe São Paulo -the gateway for companies that intend to settle their operations in the Brazilian state- referred to the ongoing foreign investment boom in the neighbouring country is due in part to the “lack of both legal and economic security that Argentina and its government have” (MercoPress).

SPLIT SECOND POLLS

Brazil Politics & Government News

In Brazil on July 20, 2012 at 10:05 am

POLITICS

The 2012 Brazilian municipal elections will not take place until October but with rifts between staunch allies, and political rivals forging unexpected deals, this year’s elections have already taken on national significance. There are over 5,566 municipalities in Brazil where voting will determine mayors, deputy mayors and city councilors – and the race has started (The Rio Times).

President Dilma Rousseff announced a government investment plan of some 7 billion reais (3.5 billion U.S. dollars) to improve transportation infrastructure in mid-size towns. The stimulus measure will be used to finance transportation projects carried out by municipal or state governments. Some 75 cities with a population of 250,000 to 700,000 will be eligible for the funds (Xinhua).

Leonardo Gomes Pereira, the chief financial officer of Brazilian airline Gol Linhas Aereas was nominated to head the country’s securities regulator, in an unexpected pick outside the institution. Finance Minister Guido Mantega nominated Pereira to head the regulator, the CVM (MercoPress).

An imminent Supreme Court trial of former government and ruling-party officials is reviving Brazil’s biggest corruption scandal in two decades, with the potential to damage not only the Workers’ Party, but also popular ex-President Luiz Inácio Lula da Silva. The trial, set to begin Aug. 2, stems from allegations, first aired in 2005, that Mr. da Silva’s powerful chief-of-staff José Dirceu offered monthly bribes, equal in some cases to more than $10,000, to members of Congress in exchange for their votes (Wall Street Journal).

SPLIT SECOND POLL

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INTERNATIONAL

Former Brazilian president Fernando Enrique Cardoso said that his country is rapidly losing influence in South America to Venezuela, following on remarks about the suspension of Paraguay from Mercosur (MercoPress).

Brazil is considering imposing punishing trade measures on the US for flooding the global market with heavily subsidised cotton (The Guardian).

The current search for new trading partners in unexpected geographic areas demonstrates the extent to which Brazil has changed its foreign policy the last few years. With an agenda that has focused primarily on global business performance, the Middle East has emerged as a key area for Brazilians who want to expand the consumer market of their companies (Global Voices).

DEFENSE & SECURITY

President Dilma Rousseff is shopping for a new presidential jet and is said to be talking to Boeing about buying one. Rousseff is seeking a larger plane more consistent with Brazil’s growing economic and geopolitical might and is evaluating the purchase of a Boeing 747 similar to Air Force One, the aircraft used by the president of the United States (Reuters).

Meanwhile U.S. aerospace company Boeing Co has offered to transfer more technology to Brazil if the government upgraded its Air Force fighter fleet with the firm’s F-18 Super Hornet jet (Reuters).

The Senate’s Plenary approved the Chamber’s Bill 64/20212, which authorizes the creation of the public company Amazonia Azul Defense Technologies (Amazul). The main goal of the company is to develop the Brazilian nuclear sector, especially the part related to the construction of a submarine propeller moved by nuclear energy (Federal Senate).

EDUCATION

Launched in December 2011, the Science Without Frontiers Program presents a positive balance for Brazil. More than 6,700 Brazilian students are already overseas, in universities of excellence, as scholarship students for the program. In September, over 12,000 students go overseas to do a one-year of undergraduate studies in institutions from 12 countries: Germany, Australia, Belgium, Canada, Korea, Spain, United States, France, Holland, Italy, Portugal and the UK (Portal Brasil).

SPLIT SECOND POLL

SOCIAL

The homicide rate for Brazilian young people under age 19 shot up 346 percent over the past three decades, according to research published by the Latin American School of Social Sciences (Washinghton Post).

Brazil’s prison crisis is now the midwife of some inventive programmes to boost early release (The Guardian).

C Class now represents 54% of the Brazilian population. The effects of the change are visible: advertising has changed its focus and now does not restrict itself to showing just the rich and white: companies that before only targeted the super rich AAA Class, can now think of nothing but selling to the new middle class. Sellers are being trained to avoid judging people by their appearance –a common habit in a Brazil with a history of stark divides among the classes (Folha).