POLITICS

A year into her term, Ms Rousseff’s administration is firmer in its principles, more technocratic, more personally loyal, and far more female than was Lula’s. It remains to be seen whether those changes will make her more able than Lula was to push through the structural reforms Brazil needs (The Economist).

President Dilma Rousseff plans to freeze 55 billion reais ($32 billion) in budget spending in 2012, officials said, as part of an annual fiscal exercise designed to limit inflation and signal the government’s commitment to austerity. Most investors anticipated a freeze of roughly 50 billion reais. The total government budget in Brazil this year is expected to be about 1.5 trillion reais (Reuters).

Brazil’s education system will be critical in improving the country’s stark inequalities, and last week it was announced that 600,000 tablet computers would be handed out to public school teachers at over 62,000 schools, in an attempt by the Ministry of Education to show new technologies are the way to speed up improvements (The Rio Times).

A Brazilian newspaper editor who campaigned against corruption in Mato Grosso do Sul state has been shot dead, police say. Paulo Rodrigues was killed by gunmen riding a motorcycle in the city of Ponta Pora, near the Paraguayan border (BBC).

The Brazilian Executive Public Ethics Committee will investigate alleged corruption claims involving Development, Industry and Foreign Trade minister Fernando Pimentel. Jose Paulo Sepulveda Pertence said the investigation will focus on media reports that exposed Pimentel activities as business consultant for private companies in 2009 and 2010 (MercoPress).

Recently inaugurated Minister for Women policies Eleonora Menicucci has raised eyebrows in chauvinistic Brazil after having publicly admitted to two abortions and bi-sexual experiences (MercoPress).

The Brazilian government wants to increase from four to six months the amount of paid maternity leave companies are obliged to give new mothers, the country’s minister for women’s policy said (Latin American Herald).

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INTERNATIONAL

The Senate’s Committee on External Relations and National Defense approved the creation of an external temporary committee to cope with the crisis involving Brazilian rural producers rooted in Paraguay, also called Brasiguayos and the Paraguayan landless, known as carperos (Federal Senate).

Brazil has asked China to allow more of its manufactured goods in to the Chinese market as it seeks to tap into the country’s growing economy. The call comes as Brazil’s trade surplus with China has been rising, hitting $11.5bn (£7bn) last year. Brazil has also asked China to reduce its exports amid concerns that the influx of low-cost Chinese goods was hurting its manufacturing sector (BBC).

American politicians aren’t the only ones worried about China trade.  Brazil’s Vice President Michel Temer said that the country’s business leaders were getting increasingly wary about competition from China (Forbes).

Foreign Minister Antonio Patriota and his visiting German counterpart Guido Westerwelle called for signing a free trade agreement between the European Union and the South American trade bloc Mercosur (MercoPress).

After more than three decades, the United States has allowed its import tariff on sugarcane ethanol to expire, giving American consumers access to one of the best environmentally performing biofuels available at commercial scale. The Brazilian sugarcane industry hopes that decision will encourage the European Union to follow suit, in order to develop free markets for clean, sustainable and renewable fuels (UNICA).

Brazil’s trade with the Arab world increased more than 28 per cent to $25.13 billion (Dh92.9 billion) last year and is expected to grow by up to 15 per cent this year, according to the Arab Brazilian Chamber of Commerce (Gulf News).

DEFENSE & SECURITY

Brazil is “very likely” to choose France’s Rafale fighter jet to refurbish its air force, government sources say, a decision that would award one of the emerging-market world’s most coveted defense contracts to a jet whose future was in doubt only two weeks ago (Reuters).

Swedish defense group Saab AB said the company has got no indication that Brazil has reached a decision on what fighter jets to opt for to rearm its air force (WSJ).

Defense Minister Celso Amorim said the need for a strong defense industrial base is part of a strategy of deterrence to ensure peace in the South Atlantic. In a speech at the opening of 2nd National Defense Seminar, held in the auditorium Nereus Ramos House of Representatives, the Minister Celso Amorim has identified a process of devolution of power worldwide and the creation of “a belt of good-will between Brazil and its neighbors in South America.” The minister said the country should extend this belt to Africa, in the spirit proposed by the Zone of Peace and Cooperation of the South Atlantic (Defpro).

Peru is considering buying ten Super Tucano light attack aircraft from Brazil’s Embraer as it works with Brazil to bolster surveillance along their jungle border, Brazilian Defense Minister Celso Amorim said (Reuters).

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SOCIAL

Facebook’s popularity in Brazil has exploded over the past year, and the company may have its biggest competitor, Google’s Orkut, to thank for it (Reuters).

But Baidu, the leading Chinese search engine, is opening an office in São Paulo. The initial objective is to get to know the Brazilian and Latin American market in order to design a strategy for the region. “The idea is to compete directly with Google,” Wesley Barbosa, 25, the person from Alagoas newly hired for the position of business manager for Latin America, told Folha. Currently in Beijing, he will be moving to São Paulo in three months (Folha).

ECONOMY

Economic activity in Brazil rose 0.57 percent in December from November, the second increase in a row, adding evidence of a rebound after interest rate cuts and tax incentives (Reuters).

Finance Minister Guido Mantega said Brazil’s GDP grew three percent in 2011, rejecting the Central Bank’s estimate of 2.79 percent (Xinhua).

Growth will pick up speed in the second half of the year and reach an annualized pace of more than 5 percent, due to government stimulus measures, Finance Minister Guido Mantega said (Bloomberg).

In December, the volume of retail trade sales in the country increased by 0.3% in comparison with that of the previous month, in the seasonally-adjusted series. Nominal revenue recorded the same percent change. As a result, the sector completed a period of four months with positive rates for volume of sales and 38 months in a row for nominal revenue. The other indexes, without seasonal adjustment, registered increase of 6.7% in volume of sales over December 2010 and the same figure accumulated in the year. Nominal revenue had rates of 10.1% over December 2010 and of 11.5% in the year (IBGE).

Finance Minister Guido Mantega denied a report the government is considering raising taxes on floating-rate debt investments, saying that no tax increases of any kind are planned at this time (Reuters).

BUSINESS

Merck & Co plans to form a joint venture with two Brazilian pharmaceutical companies to sell medicines in Brazil, the U.S. drugmaker said (Reuters).

German truck maker MAN SE said profitability will take a hit this year from the impact of new emissions standards in Brazil which could push down demand in this key market by an estimated 15 percent in the first half (Reuters).

General Mills Inc agreed to buy Brazilian food company Yoki for 2 billion reais ($1.16 billion), in a move marking its return to Latin America’s largest consumer market (Reuters).

In a globalized world like the one of nowadays, it is hard to control the economic interaction between countries and even all the barriers to imports are not enough to control a phenomenon called parallel imports (The Brazil Business).

AGRI ETC

The U.S. health regulator declined a request by orange juice producers to allow a higher tolerance of a banned fungicide in juice imports, a decision that will force Brazil to stop exporting concentrated orange juice to the United States (Reuters).

AUTOMOTIVE

Brazil in March will ease a tax increase charged on imported cars for automakers investing to build local assembly plants. The surcharge of as much as 30 percent was implemented last month, amid protests from Chinese automakers, to stem a surge of imported cars. Companies that may benefit include Anhui Jianghuai Automobile Group Co from China and Germany’s Bayerische Motoren Werke AG, both of which have announced plans to invest in Brazil (Bloomberg).

The BNDES has approved financing of R$ 307.4 million for automaker Hyundai Motor Brasil to set up an industrial plant in the city of Piracicaba (state of São Paulo) to manufacture passenger vehicles (BNDES).

AVIATION

Gol Airlines pulled its new perpetual non-callable three senior unsecured note (bond), something many in the market expected. The bond had a minimum size of US$100m, with initial price guidance of 11.50%, “a big, sexy yield,” said a senior DCM banker in London, but not enticing enough to make it past the finish line (Reuters).

TAM, Brazil’s largest airline, cut its travel demand estimate for this year and will further lower the size of its fleet, signaling that an economic slowdown will hamper revenue (Reuters).

Embraer, the world’s third-largest commercial planemaker, booked an order for 10 regional planes from Brazilian airline Azul through the exercise of options, as the carrier grows its network of lower-traffic routes (Reuters).

Brazil’s Senate Commission on Infrastructure Services said it will invite aviation authorities to explain the bidding process for the Guarulhos, Viracopos and Brasilia airports. Senator Francisco Dornelles said he considered it “important that it is explained to the commission how it will be possible to reach the quality of service desired with the resources that will be left after the payment to the government” (Bloomberg).

Brazil is considering new rules for the next round of airport auctions because President Dilma Rousseff has concerns about the winners of last week’s bidding. The government is worried that some of the companies that won the rights to manage the Viracopos, Guarulhos and Brasilia airports don’t have enough experience in the business (Bloomberg).

A Brazilian airliner safely made a forced landing after a passenger had a “psychotic attack,” entered the cockpit and assaulted a pilot, crew members and passengers who tried to subdue him, witnesses said (NDTV).

BANKING & FINANCE

Credit availability for large Brazilian companies was “moderately restrictive” in the final three months of last year and will remain so in the first quarter, said Carlos Hamilton, the central bank’s director of economic policy, citing a survey of 22 financial institutions (Bloomberg).

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MINING & STEEL

Vale, the world’s largest iron ore producer, said it is selling 80 percent of its ore using spot prices, nearly completing a historic shift to market-based pricing for the principal raw material used in steel. The new system was prompted by Chinese steelmakers, Vale’s largest client group, who wanted to benefit more quickly from falling iron ore prices (Reuters).

Switzerland is demanding that Vale SA, the world’s No.2 iron-ore producer, pays five years in back taxes, Swiss newspaper Tages-Anzeiger’s website reported (Reuters).

Billionaire Eike Batista, whose investments range from iron ore to coal, said he’s in talks with sovereign wealth funds and other potential “strategic partners” to sell a stake in his AUX gold unit (Bloomberg).

Steelmaker Gerdau has an “extensive list” of potential partners for a plan to spin off a mining unit that has about 2.9 billion tonnes of iron ore reserves, Chief Executive André Gerdau Johannpeter said (Reuters).

OIL & GAS

Brazil’s consumption of gasoline rose 19 percent in 2011 to 35.5 billion liters, the National Petroleum Agency said, because of soaring vehicle sales and a spike in the price of ethanol. Overall, Brazil’s consumption of fuels rose by 3 percent last year to 121.5 billion liters, the agency said, including a 5.2 percent increase in diesel to 51.8 billion liters (Reuters).

Petrobras’ new chief executive, Maria das Gracas Foster, said her concern is to increase oil and gas output but she did not plan to expand the investment budget for Brazil’s state-run oil company (Reuters).

Graca Foster was appointed Petrobras new CEO last Monday. The self-made woman, nicknamed “the Iron Lady of Oil” by Brazilian press,  grew up in a favela in Rio de Janeiro and started working when she was 8 years old as a rag-picker. Maria das Gracas Foster becomes the first woman to head the Brazilian oil giant, the largest company in South America. Who is she (Forbes)?

Petrobras said it reduced output from the offshore P-43 production platform after it leaked about 30 barrels of oil into the sea. It’s the latest in a series of small spills in one of the world’s most promising new oil frontiers that have elicited fines ranging from tens of million to several billions of dollars and even criminal indictments against some oil company executives (Reuters).

Petrobras also cut its 2012 target for additional oil output by 30 percent, citing delays in building a ship. The company said it would add 336,000 barrels of new oil output a day in Brazil this year, down from its previous estimate of 480,000 (Reuters).

Brazil’s state development bank BNDES has approved the first two loans as part of a 4 billion reais ($2.3 billion) program to finance oil equipment and service providers at a time when the country plans to more than double oil production by 2020 (Bloomberg).

Sete Brasil Participacoes SA, an oil-rig provider owned by Petrobras, banks and pension funds, will spend $27 billion by 2020 on drilling units (Bloomberg).

PORTS & LOGISTICS

About a quarter of Brazil’s shipments of soy and corn to world markets were disrupted after a dry bulk carrier collided with and damaged a major grain terminal at Santos Port (Reuters).

China’s Dalian Port said it was seeking more cooperation with Brazil’s Vale, appearing to reach out to the world’s largest iron ore producer after Beijing banned its giant ships from docking in China last month (Reuters).

PROJECT OF THE WEEK

Render of the 163 metres tall Matarazzo tower for Sao Paulo, to be built on one the last availiable plots on Avenida Paulista (Skyscrapercity).

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DESIGN

Five architecture firms are shaping the look of the country of the future. Check out this article in the Wall Street Journal.

FIFA WORLD CUP

Brazil football chief Ricardo Teixeira will step down as president of the Brazilian Football Confederation (CBF) after 23 years in charge. The controversial FIFA executive, who is also in charge of Brazil’s preparations for the 2014 World Cup, is embroiled in corruption allegations (Daily Mail).

TRAVEL

There’s a lot to see in a country with 4,600 miles of coastline and nearly half the landmass of South America. But whether you’re into art, urbanity or the outdoors, you’ll find something to love in this destination trifecta. Three tips from the Wall Street Journal.

AMAZON

Amazon defenders face death or exile. Brazilian activists who inform on illegal loggers laying waste to the rainforests can expect a visit from the gunmen (The Guardian).

BAHIA

Current and former police officers may have committed up to 30 murders during the recently ended police strike in Brazil’s northeastern state of Bahia, law enforcement officials there said (Boston.com).

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RIO

Two weeks of police protests in Brazil that led to a bloody crime wave, disrupted preparations for upcoming carnival celebrations, and raised concerns about security ahead of the 2014 soccer World Cup ended when thousands of state police in Rio de Janeiro went back to work (Reuters).

Between 2010 and 2020 Rio de Janeiro will need to invest some R$15.8 billion (US$9.15 billion) in both public investment and private funding to modernize and expand its transport network, develop favelas and underground gas supply lines. That is the conclusion of a host of experts interviewed by O Globo newspaper after a series of incidents highlighted the city’s struggling infrastructure (The Rio Times).

With 2012 Carnival just days away, Rio is awash with tourists, arriving to experience what is widely deemed the greatest street party on earth. The city is full of adventuring travelers skimming their guidebooks and scratching their heads, but among the ubiquitous sound of English, French and German, is the increasing patter of Brazilian Portuguese (The Rio Times).

The Cidade Maravilhosa offers some of the best options in luxury living for those with the means, among them the sweeping penthouse views of the city. This Carnival, more jet-setters are seeking the best Rio has to offer and instead of settling for hotel accommodations, are looking to local agencies to provide them with the best penthouses in the most up-market areas in town (The Rio Times).

There are many ways to enjoy the infamous Carnival blocos of Rio, and experienced revelers have been kind enough to offer inside tips for the rookies, experiencing Carnival in the in Cidade Maravilhosa for the first time. From drinking to going to pre-parties, the veterans agree that vitality and comfort are two of the most important ingredients for an enjoyable bloco (The Rio Times).

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SOUTH

If you are looking for a way to dodge the chaos of Carnival in Rio, then Florianópolis, capital of Santa Catarina state, might just provide the escapism you need. The stunning, 33-mile-long (53km) island on which the city sits – the Ilha de Santa Catarina – offers over hundred beaches, culture, good food and nearly 300 years of history, the gem in Southern Brazil’s crown (The Rio Times).

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