News from Brazil

Archive for June, 2012|Monthly archive page

Brazil Politics & Government News

In Brazil on June 28, 2012 at 1:47 pm

POLITICS

Brazil unveiled a new round of stimulus measures, pledging to boost government purchases and lower subsidized lending rates for companies in another bid to revive a struggling economy. The new measures, which call for an increase in government purchases this year of 6.6 billion reais ($3.2 billion), are part of a broader push to shield Brazil from the slowing global economy and the European debt crisis (Reuters).

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RIO+20

The UN sustainable development summit in Brazil has ended with world leaders adopting a political declaration hammered out a few days previously. Environment and development charities say the Rio+20 agreement is too weak to tackle social and environmental crises. Gro Harlem Brundtland, author of a major UN sustainable development report 25 years ago, said corporate power was one reason for lack of progress. Nations will spend three years drawing up sustainable development goals. They will also work towards better protection for marine life on the high seas. But moves to eliminate subsidies on fossil fuels – recommended in a number of authoritative reports as likely to boost economies and curb CO2 emissions – came to naught (BBC).

On the day before the Rio+20 talks started, international executives sat in a conference hall, passed a microphone around like a guitar at a campfire, and sang an unlikely new song. “Businesses like regulation,” said Adriana Machado, CEO of General Electric Brazil, speaking at the World Business Council for Sustainable Business’ daylong event. Machado cited government support for Brazil’s nascent wind industry as critical to its growth (Forbes).

UN press sources announced that Rio+20 concluded with more than US$500 billion mobilized with over 700 “commitments” made. World leaders finalized the outcome document agreement, which is intended to advance action on sustainable development (The Rio Times).

INTERNATIONAL

The outcome of a political standoff in Paraguay may well depend on the response of Dilma Rousseff, Brazil’s president. Brazil is Paraguay’s biggest trading partner, and its purchases of electricity from a dam the two countries share are crucial for the Paraguayan economy (The Economist).

Ecuadorean plaintiffs have filed a second lawsuit outside the Andean country, this time in Brazil, in a bid to enforce an $18 billion court ruling against U.S. oil company Chevron for polluting the Amazon, their lawyers said (Reuters).

China has offered to set up a $10bn (£6.4bn) credit line for Latin American countries to support infrastructure projects in the region. The proposal was made by China’s Premier Wen Jiabao as he wrapped up his visit to the region. He also proposed a free trade pact between China and South American trade bloc Mercosur, which includes Brazil, Argentina, Uruguay and Paraguay (BBC).

DEFENSE & SECURITY

U.S.-based Boeing and Brazil’s Embraer said they would collaborate on some aspects of developing Embraer’s KC-390 military transport and refueling jet, tightening relations between the two countries’ defense industries (Reuters).

Brazil will offer inmates in its crowded federal penitentiary system a novel way to shorten their sentences: four days less for every book they read (Reuters).

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Brazil Business & Economy News

In Brazil on June 28, 2012 at 1:46 pm

ECONOMY

Brazil’s economy will expand by more than 2.5 percent in 2012 as the government continues to takes measures to spur growth, Finance Minister Guido Mantega said (Reuters). 

Brazilian consumer confidence waned in June and analysts chopped their forecasts for the country’s economic growth, as indebted households and risk-wary investors kept a cautious stance despite successive government measures to revive growth. The FGV consumer confidence index slumped 2.8 percent in June from May, its second straight monthly decline, with households expectations worsening for the economy over the next six months (Reuters).

Brazil is not going to escape the onrushing collapse of the developed economies, warns the Central Bank of Central Banks, known as the Bank for International Settlements. In its 214 page annual report released over the weekend, BIS said that Brazil and India, in particular, would suffer an accentuated decline in economic growth due to the problems in the Western powers, most notably in Europe (Forbes).

Brazil’s central bank signaled it will continue to cut interest rates as Europe’s debt crisis and sluggish demand lead to slower economic growth (Bloomberg).

BUSINESS

Chief Executive Jean-Charles Naouri, who last week took over as chairman of Wilkes, the holding company that controls Brazilian retail giant Grupo Pão de Açúcar, told Valor Economico in an interview published on Monday he does not see a break-up in which Pão de Açúcar Chairman Abilio Diniz would retain control of the Via Varejo home electronics division as an “appropriate project” (Reuters).

Iguatemi Empresa de Shopping Centers SA, the third-largest mall operator in Brazil, says growing demand from consumers will help it weather a slowdown in retail sales growth to a six-month low (Bloomberg).

What a bumpy road it’s been for Brazilian billionaire Eike Batista these last few months. The man who came in as the world’s seventh richest on the Forbes list of the World’s Billionaires in March –with a net worth of $30 billion  — has since shed more than $11 billion of that fortune, largely due to one very volatile stock (Forbes).

AGRI ETC

Sparse opportunities in Brazil’s ethanol sector have limited the number of new biofuel projects in the five-year investment plan of the state-led oil company Petrobras, Chief Executive Maria das Gracas Foster said (Reuters).

Unfortunately, in Brazil, a nascent wine-consuming market (though a fast-rising producer), as in other countries, the genuine flavor of the terroir is being foregone in favor of processed wines. But as more consumers look for quality organic wines, more producers, throughout the world, are eschewing chemical and technological advances and focusing on classic growth and production methods to produce organic, biodynamic, and natural wines teeming with genuine flavor (The Rio Times).

AVIATION

Brazil’s No.2 airline, Gol Linhas Aereas plans to reduce its workforce by 2,500 employees this year through layoffs, hiring freezes and natural turnover at the company (Reuters).

Chile’s Lan airline has completed a takeover of Brazil’s Tam, creating the world’s second largest airline by market value, to be known as Latam. After two years of negotiations, Tam shareholders agreed to the takeover. The new company will have its headquarters in the Chilean capital, Santiago (BBC).

Embraer SA’s bid to sell more business aircraft in Asia is taking off after the Chinese government gave the world’s fourth-biggest plane maker approval to manufacture the jets there (Bloomberg).

BANKING & FINANCE

Loan delinquencies at Brazilian banks rose to a record in May in a sign that a slowdown is hitting Latin America’s largest economy despite its strong jobs market and aggressive cuts in borrowing costs (Reuters).

Cetip, Latin America’s largest securities clearinghouse, launched the first phase of its new trading platform, in which bond and other fixed-income over-the-counter deals will be registered. The so-called Cetip | Voice device will partially replace trading-by-phone practices and boost price contributions to help traders cut costs and mitigate potential trading mistakes, Ricardo Vit, a general manager for new businesses at Cetip, was quoted in a statement as saying (Reuters).

Brazilian authorities want U.S. investment banking giant Morgan Stanley to return about 113 million reais ($54 million) associated with a stock sale by shareholders of troubled lender Banco Cruzeiro do Sul, which was seized by the central bank this month, Folha de S.Paulo newspaper reported (Reuters).

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MINING & STEEL

Brazil is considering cancelling some mineral rights in areas considered “strategic” and compensating mining companies for prospecting work done on those claims, high-level Brazilian government and mining industry officials told Reuters.

Vale, the world’s No. 2 mining company, said it received an environmental license to build its biggest-ever iron ore mine, an Amazon region project that holds about $1 trillion of reserves at current prices. The S11D mine, an extension of the company’s giant Carajas complex, is expected to cost $8.04 billion to build. It will produce 90 million metric tonnes of iron ore and begin operations in 2016, Vale said (Reuters).

Brazilian mining start-up Ferrous Resources do Brasil SA plans to raise iron-ore output tenfold to 17 million tonnes by 2016 as it races to fill rising demand for the main steel ingredient being driven by Chinese expansion, the company said (Reuters).

OIL & GAS

Brazil’s state-led oil company Petrobras said it will raise gasoline and diesel prices for the first time since 2006, a move aimed at ending refining losses and paying for the world’s largest corporate spending plan (Reuters).

Shares of Brazilian oil company OGX plummeted nearly 30 percent after a disappointing production forecast for its only productive field. Already skittish about a stagnant Brazilian economy after a decade-long investment boom, investors in recent days have begun shedding holdings in one sector that symbolizes much of the recent optimism for Latin America’s largest economy: oil (Reuters).

Vale, the world’s second-largest mining company, may keep its natural gas exploration assets if it succeeds in selling its Brazilian oil assets in order to guarantee energy supplies for its mines, a company official said (Reuters).

For a long time, Brazil’s Petrobras was the state-run oil company that was supposed to show other state-run oil companies how it was done. But burdened with unrealistic government policy, Petrobras is starting to look as broken as some of the industry’s laggards. Years of missed production targets, ballooning costs and investor suspicion that an activist central government will short-change equity holders has turned the former stock market darling into a dog. Read the personal opinion of Reuters journalist Campbell.

POWER

Pacific Hydro Pty., the Australia renewable-energy developer, plans to build 500 megawatts of wind farms in Brazil to meet growing industrial demand for energy (Bloomberg).

Brazil Weekly´s Brazil Regional news

In Brazil on June 28, 2012 at 1:45 pm

PROJECT OF THE WEEK

Render of the Trump Towers planned for Rio de Janeiro´s Porto Maravilha docklands district (Skyscrapercity).

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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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BRASILIA

Built on the plains of the Cerrado just over fifty years ago by architect Oscar Niemeyer and city planner Lucio Costa, Brasilia’s austere modernity can put visitors off balance. But beyond the science fiction feel, the city is cultured, lively and verdant (The Rio Times).

RIO

BBC´s David Shukman takes a walk through the streets of Brazil’s largest favela, Rocinha. Along the highway linking the luxury hotels of Copacabana and the conference halls of the Rio+20 summit, the darkened windows of the VIP limousines will not have offered a clear view of the crowded hillside known as Rocinha. Pronounced “Hosinia”, this dense mass of tiny dwellings perched beneath a series of grey cliffs holds the dubious title of being Brazil’s largest favela – a tightly-knit community of 120,000 (BBC).

A new Metro station license was approved by INEA (Instituto Estadual do Ambiente) to be built at Praça Nossa Senhora da Paz (Our Lady of Peace Park) in the heart of Ipanema. Residents have been protesting the project due to the destruction of the park trees and the neighborhood way-of-life (The Rio Times).

While Brazil’s economic power-engine cools down as a reflection of the global financial crisis, the economy of the State of Rio de Janeiro continues to grow on the fast-track of its oil exports. At present, Rio accounts for 81 percent of Brazil’s trade balance surplus, reflecting the importance of the state’s offshore pre-salt oil reserves located in Brazil’s Southeastern coast (The Rio Times).

After the pacification of the Vidigal favela community last November 2011 and subsequent UPP (police pacification unit), area real estate prices have experienced an increase of up to fifty percent, in some cases more. Along with this interest and speculation, is a proposed five-star luxury hotel being built by Antonio Belmonte at the very top of Vidigal (The Rio Times).

SAO PAULO

Sao Paulo’s mayoral election attracts considerable attention nationally. The vote isn’t until October, yet the race is already stealing the front pages. Jose Serra, who lost to Dilma Rousseff in the 2010 presidential election, ought to be a shoe-in. He’s a former governor of Sao Paulo state from the opposition Social Democracy Party which, with its allies, has held the city since 2004. However, Rousseff’s Workers’ Party is determined to win back this most coveted of metropolitan crowns (Bloomberg).

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Brazil Politics & Government News

In Brazil on June 22, 2012 at 12:36 pm

POLITICS

Dilma Rousseff is staking her presidency on achieving a “historic” decline in interest rates, betting that is the best strategy for reviving Brazil’s economy in the medium term, members of her economic team told Reuters.

The Brazilian government offered 20 billion reais ($9.78 billion) in cheap loans to states, the latest in a string of stimulus measures to bolster investment as Latin America’s top economy struggles to grow. After a meeting with the country’s governors, President Dilma Rousseff agreed to give out the subsidized loans via the state-owned development bank BNDES to finance infrastructure investment (Reuters).

Brazil’s currency, the real, has been parked over R$2 to the dollar for months now thanks to a combination of weak commodity prices and fiscal measures designed to weaken the exchange rate. But with retail sales a disappointingly low 0.8% compared to consensus estimates of around 1.4%, and the government now falling in line with the market and saying this year’s GDP growth will come nowhere the 4% target, the Finance Ministry decided to make a move on foreign credit transactions last week to help ease the burden of tough times (Forbes).

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INTERNATIONAL

President Dilma Rousseff welcomed world leaders to a rainy Rio de Janeiro under a cloud of criticism that a three-day summit is falling far short of its promise to establish clear goals for sustainable development (Reuters).

By the end of the three-day UN environment summit due to end on June 23rd in Rio de Janeiro, a hundred-plus national leaders and representatives were expected to approve a 283-point agreement negotiated in advance by their envoys. The gathering was called Rio+20, in reference to an important environment conference in the city in 1992. But the agreement this time was filled with weasel words and compromises (The Economist).

Brazil and China signed a handful of trade agreements aimed at boosting investment and trade flows for the coming decade, at a time when economic growth in both emerging market powerhouses is losing momentum abruptly. China, the world’s second largest economy, is Brazil’s biggest export market, and Brazil officials hailed the accord as critical to the South American country’s growth. Under the agreements signed by Brazilian President Dilma Rousseff and Chinese Premier Wen Jiabao, relations between the nations will rise to the status of a “global strategic partnership,” highlighting their growing influence in the global economy (Reuters).

Brazil and China will sign an agreement in the coming weeks to swap as much as $30 billion in their two currencies, Brazil Finance Minister Guido Mantega said. The currency swap, worth 60 billion reais or 190 billion yuan, will be the first step in a broader agreement with Russia, India and South Africa to allow members of the so-called BRICS group of emerging markets to pool resources to better weather the global financial crisis, Mantega told reporters in Rio de Janeiro (Bloomberg).

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Brazil Business & Economy News

In Brazil on June 22, 2012 at 12:35 pm

ECONOMY

Brazil’s jobless rate fell to 5.8 percent in May from 6.0 percent in April, government statistics agency IBGE said. It is the lowest unemployment rate on record for May since the data series began in 2002, according to IBGE (Reuters).

Brazil’s economy will expand 1.5 percent this year on slowing investment and weak industrial production, Credit Suisse Group AG said (Bloomberg).

Brazil’s economy will be expanding in the beginning of next year at the fastest pace since the last quarter of 2010, said central bank President Alexandre Tombini (Bloomberg).

Brazil may be living in a labor bubble. Not because labor costs are rising; they should be rising. Brazilian workers are in demand and have spent generations earning peanuts. The government, and private sector, are finally catching up. But in the process of rising wages there is rising employment. Call it a job market bubble, but Brazil has discovered how to keep lowering unemployment data even when economic growth is a measly 0.2 percent (Forbes).

BUSINESS

An intellectual Frenchman who came to retail relatively late in his career is set to become the industry’s kingpin in Brazil, one of the world’s largest and fastest-growing consumer markets. Jean-Charles Naouri, the steely-eyed boss of French stores group Casino, will take control of Brazil’s biggest retailer, Grupo Pao de Acucar, the climax of his drive to create an emerging markets powerhouse (Reuters).

Private equity firm KKR & Co LP appointed Henrique Meirelles as a senior adviser, giving the longest-serving central bank president in Brazilian history his latest high profile job in a string of private-sector leadership roles (Reuters).

Brazil’s government will always side with Brazilian companies over foreign rivals in corporate takeover bids so long as their proposals are financially sound and viable, the head of state development bank BNDES said (Reuters).

OSX, the shipbuilding unit of the energy and mining conglomerate controlled by billionaire Eike Batista, secured 2.7 billion reais ($1.3 billion) in financing for the construction of its Açú ship yard 250 miles north of Rio de Janeiro, the company said in a securities filing (Reuters).

AGRI ETC.

The profitability of sugar exports from Brazil, the world’s biggest producer, over sales in the domestic market increased last week as harvesting delays helped boost international prices, according to Cepea (Bloomberg).

Fibria Celulose SA and Suzano Papel & Celulose SA, Brazil’s biggest pulp makers, had their earnings estimates cut by more than any other company in the country as the industry adds factories amid waning overseas demand (Bloomberg).

AUTOMOTIVE

Ford Motor Co expects the Brazilian auto market to set a new sales record by the end of the year despite a sluggish start, as recent tax breaks and record-low interest rates jumpstart stagnant business at dealerships (Reuters).

AVIATION

Airline Avianca Brazil will add eight Airbus jetliners this year, growing its fleet by nearly a third and keeping downward pressure on ticket prices in a market where the biggest airlines are struggling to restore profits. Avianca’s Chief Executive Jose Efromovich told reporters that the airline was adding three more planes than originally planned due to better-than-expected passenger traffic (Reuters).

Gol Linhas Aereas, Brazil’s second-largest airline, named Paulo Sergio Kakinoff as chief executive after the company recently streamlined to cut mounting losses and fend off competition from smaller rivals. Kakinoff, the former head of carmaker Audi’s operations in Brazil, replaces Constantino de Oliveira Jr., the son of the airline’s founder and a major shareholder. Kakinoff, who was already a Gol board member, will take over on July 2 (Reuters).

BANKING & FINANCE

Mizuho Financial Group said it had agreed to buy a Brazilian unit of Germany’s WestLB, the latest move by a Japanese bank to snap up assets amid the euro zone crisis (Reuters).

Policymakers looking at whether to spur competition in Brazil’s financial exchange industry must consider the need to keep adequate levels of liquidity and transparency in the fast-growing bourse market, an independent study commissioned by the nation’s securities regulator said (Reuters).

Credit Suisse estimated that Brazilian card payment processor Redecard was worth 34.66-38.12 Brazilian reals ($16.95-$18.65) per share, putting a buyout offer by local bank Itau Unibanco at the lower end of that range (Reuters).

BM&FBovespa, Brazil’s stock exchange, is facing a loss in market share estimated at as much as 30 percent by HSBC Holdings Plc and Banco Itau BBA SA as the nation considers boosting competition among trading platforms (Bloomberg).

MINING & STEEL

Posco is studying a possible purchase of a stake in ThyssenKrupp AG’s CSA steel slab mill in Rio de Janeiro, the South Korean steelmaker’s Chief Executive Chung Joon-yang said (Reuters).

Earlier CSN , Brazil’s second-largest producer of flat steel products, will analyze ThyssenKrupp’s joint venture in local slab-making mill CSA if the German steelmaker formally puts its stake up for sale (Reuters).

Brazilian steel makers face slower demand growth than expected as they struggle with higher costs and growing imports, Gerdau SA Chief Executive Andre Gerdau Johannpeter said, as he called on the government to step in to help the industry (Reuters).

Billionaire Eike Batista, Brazil’s richest man, is selling a 49 percent stake in his AUX gold business to the Qatar Investment Authority for about $2 billion (Bloomberg).

OIL & GAS

Petrobras and its latest business plan have a serious problem. The company is likely to struggle to find the cash to pay for the hundreds of ships and dozens of oil fields, drill-rigs and platforms it wants in order to catapult Brazil into the ranks of the world’s top-four oil producers by 2020 (Reuters).

Petroleo Brasileiro SA is the worst investment among the world’s biggest oil companies this year as Brazil’s state-controlled producer suffers delays and cost overruns developing the largest oil finds in more than a decade (Bloomberg).

Brazil Weekly´s Brazil Regional News

In Brazil on June 22, 2012 at 12:34 pm

PROJECT OF THE WEEK

Render of the Museu de Saneamento for Sao Paulo (Skyscrapercity).

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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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AMAZON

Around 300 activists protested hydroelectric dams in the Brazilian Amazon less than 24 hours after the nation’s president, Dilma Rousseff, praised them as sources of clean and renewable energy at the U.N. Rio+20 conference (Forbes).

RIO

Porto Maravilha Project is one of the major revitalization initiatives for Rio’s Centro district that the city government is working on under the 2016 Olympic Games countdown. It is a massive project set to transform this area of the city, but of course the process of demolition and construction can be messy business (The Rio Times).

People from the west of the State of Rio, in Santa Cruz and Campo Grande, now have the opportunity to travel to Barra da Tijuca quickly and inexpensively. A new Transoeste BRT Line (Bus Rapid Transit) was inaugurated in the presence of Rio State Governor Sergio Cabral, Rio Mayor Eduardo Paes and ex-President Lula (The Rio Times).

Home to breathtaking views of lush-green mountain peaks, the city of Petrópolis is widely known for its historical significance as the former summer residence of Brazil’s imperial family. Yet, although this splendid mountainous city derives part of its heritage from Brazil’s 19th century monarchy, the German immigrants hired to lay down its foundations are an integral part of its history (The Rio Times).

SAO PAULO

Brazil Politics & Government News

In Brazil on June 8, 2012 at 10:09 am

BRAZIL WEEKLY IS TAKING A BREAK AT THE MOMENT

WE WILL BE BACK SOON!

POLITICS

The present is fast catching up with the country of the future. Brazilians woke last week to news of unexpectedly anemic economic growth, slumping industrial production and a plunging stock market. The administration of President Dilma Rousseff has been trying to ride out the global economic slowdown by devaluing its currency and raising import barriers. For all of Rousseff’s complaints about an external “monetary tsunami” and predatory trade, the real threats to Brazil’s remarkable economic achievements over the past two decades can be found at home (Bloomberg View).

Brazil announced plans to protect an additional 10 000km² of land and pledged not to let economic woes stop it from implementing other measures to protect the environment (MercoPress).

Former President Lula da Silva admitted during a television interview that he will be presidential candidate in the 2014 elections if current Head of State Dilma Rousseff does not run for re-election (MercoPress).

The Brazilian Supreme Court decided seven years after the mensalão scheme was revealed, that the case will be tried on August 1st. The verdict, however, is expected to be given in September. The mensalão scheme was the biggest scandal of the Lula administration and was described by the Attorney General’s Office as an illegal political financing scheme organized by the PT to guarantee support for the government in Congress in 2003 and 2004 (Folha).

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INTERNATIONAL

Robert Zoellick, who steps down as World Bank president on June 30 when his five-year term ends, said Brazil could play a greater role in global security by preventing the spread of nuclear weapons. He referred to a proposal in April by former U.S. assistant secretary of state for inter-American affairs, Bernard Aronson, that Brazil should voluntarily end its uranium enrichment program and call on other nations, including Iran, to follow its example (Reuters).

The U.S. subsidiary of Brazilian construction giant Odebrecht has filed a lawsuit challenging a recently signed Florida law barring local governments from hiring companies that do business in Cuba or Syria. The lawsuit claims the measure is “unconstitutional and unenforceable” and argues that the federal government, not states, has the authority to enact laws involving foreign affairs (Reuters).

Pedro Juan Caballero is a strange city. A smugglers’ paradise, it straddles the border with its Brazilian twin, Ponta Porã. Chinese, Arab and Paraguayan merchants sell an array of products of dubious origin, including contraband cigarettes, Uzi submachine guns, even a whiskyesque spirit called Etiqueta Negra (Black Label) (The New York Times).

King Juan Carlos I of Spain arrived in Brazil this week for high-level meetings aimed at strengthening bilateral economic ties with Brazil. Although mutual business interests, new deals and the Eurozone crisis comprised the official agenda, the ongoing immigration issues were also addressed, with both countries reaffirming their respect for each other (The Rio Times).

Brazilian and Spanish entrepreneurs established a joint commission to explore markets in Asia and the Middle East (Xinhua).

Trade differences between Mercosur leading partners Brazil and Argentina will be overcome with negotiations and promoting productive integration, coincided business people, diplomats and academics from both countries at a seminar in Rio do Janeiro (MercoPress).

Leaders from Latin America’s most open economies will sign a trade accord today to increase commerce along the Pacific rim of the region, distancing themselves from countries such as Argentina and Brazil that are raising import restrictions amid the global slowdown (Business Week).

DEFENSE & SECURITY

A Brazilian air force cadet died when he was ejected from a training plane for unknown reasons when the aircraft was still on the ground (Fox News)

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SOCIAL

The purchasing power of the lower social classes, known as “classes C and D,” also known as the new Brazilian middle class, has not jumped in spite of lower interest rates. According to economist heard by Agência Brasil, the slowdown shows that the expansion of consumption that was to be spearheaded by the new middle class, although not exhausted, has run into a wall: family indebtedness (Agencia Brasil).

Brazil Business & Economy News

In Brazil on June 8, 2012 at 10:09 am

ECONOMY

Investor euphoria in Brazil is over. Brazil’s former Central Banker, Henrique Meirelles said those very words. Gone are the days when free money was flowing around the world looking for the next 10% gain. Speculation over Brazil joining the ranks of investment grade are behind us. That ended when Brazil was upgraded to BBB by Standard & Poor’s in April 2008. Read Ken Rapoza’s article in Forbes.

Economists cut their forecasts for Brazil’s economic growth in 2012 to 2.72 percent from 2.99 percent in the prior week, after the government reported weaker-than-expected growth in the first quarter, a weekly central bank survey showed (Reuters).

Business activity in the Brazilian services sector fell in May for the first time since July 2009, a report showed, demonstrating that manufacturers’ persistent woes have started to drag on the main engine of Brazil’s recent economic growth. Years of steady growth in a wide range of services – from hairdressing to hotels and restaurants – have helped keep Brazil’s unemployment rate near record lows and prevented a recession in the world’s sixth-largest economy (Reuters).

Brazil’s inflation rate fell more than economists expected in May, pushing the annual pace below 5% for the first time since September 2010. Monthly inflation slowed to 0.36% from 0.64% in April (MercoPress).

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.

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AGRI ETC.

Brazil should soon secure clearance to ship corn to China, which is expected to become one of the world’s biggest importers of the grain, Brazil’s agriculture ministry said (Reuters).

Brazil’s government trimmed its 2011/12 soybean crop estimate after drought ravaged output in the world’s second biggest producer this season, but raised its forecast of corn output to a record (Reuters).

Brazil’s JBS, the world’s largest meat company, said it would sue environmental organization Greenpeace for what it called false claims that could cause it to lose business and hurt its image. In a report it released this week, Greenpeace accused the company of breaking an accord that JBS and other Brazilian meat packers signed in 2009 promising not to purchase cattle raised on deforested pastures. Greenpeace said JBS had bought cattle raised on Indian reserves and other restricted areas (Reuters).

The amount of sugar waiting to be loaded at the main ports in Brazil, the world’s largest producer, climbed 37 percent over the past week after rain disrupted deliveries (Bloomberg).

Illegally smuggled into Brazil 14 years ago, transgenic soy has proved a boon to domestic farmers and now accounts for 85 percent of total production. But five million Brazilian farmers are now locked in a legal feud with US biotech giant Monsanto, the GM soy seed manufacturer, and are refusing to pay crop royalties (MercoPress).

AVIATION

Etihad Airways, United Arab Emirates flag carrier has unveiled plans to fly to Brazil, the airline’s first South American destination. The daily Sao Paulo flights, which are expected to start in June 2013, will be the first direct air link between Abu Dhabi and any South American country (MercoPress).

AUTOMOTIVE

Car dealers in Brazil expect sales in June to pick up to the fastest pace of the year, an industry group said, building on a weak May recovery as the local auto industry tries to clear out the highest inventories in nearly four years (Reuters).

BANKING & FINANCE

Bankers remain upbeat on the development of a new tax-exempt infrastructure debt security in Brazil even after an attempt to launch the asset class last week ended in failure (Reuters).

Small and mid-size banks in Brazil are solid and have adequate capital levels, central bank chief Alexandre Tombini said, a day after the authority seized a mid-sized lender over irregularities. The central bank took over control of Banco Cruzeiro do Sul and placed it under the administration of banking deposit fund FGC for 180 days (Reuters).

Emilio Botin president of Santander, Spain’s largest bank and one of the leading EU financial institutions said that Brazil is the top priority for the group since it is the source of 30% of its global earnings and anticipated the opening of more branches in merit to the country’s economic stability and social progress (MercoPress).

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MINING & STEEL

South Korean steelmaker POSCO said that it was not considering buying German steelmaker ThyssenKrupp’s factories in Brazil and the United States (Reuters).

OIL & GAS

Chevron, the second-largest U.S. oil company, faces problems regaining its Brazilian oil-drilling rights because it has not explained how it plans to “mitigate” problems at an offshore field, Magda Chambriard, Brazil’s chief oil regulator, told reporters (Reuters).

The gap between Brazilian and international fuel prices is narrowing as world oil prices fall, reducing the need to raise domestic gasoline and diesel prices, Chief Executive Maria das Graças Foster of state-led oil company Petrobras said (Reuters).

TELECOMS

Vivo SA, Tim Participacoes SA, Oi SA, America Movil SAB, who operates under the Claro brand in Brazil, and Sky Brasil Servicos Ltda are among companies that plan to bid on the country’s 4G technology June 12 auction, according to the telecommunications agency, known as Anatel. George Soros’ Sunrise Telecomunicacoes Ltda also plans to bid on the auction, Anatel said in an e-mailed statement. All interested groups have already filed the required documents as well as their price proposals, according to the agency (Bloomberg).

Brazil Weekly’s Brazil Regional News

In Brazil on June 8, 2012 at 10:07 am

PROJECT OF THE WEEK

Render of the Nihon No Uti Japanese Culture Center for – where else – Liberdade district, Sao Paulo (more on Skyscrapercity).

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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.

FIFA WORLD CUP 2014

Brazilian president Dilma Rousseff has signed into law a bill that in principle allows the sale of beer during 2014 World Cup matches. Football’s world governing body, Fifa, had demanded a change in Brazilian legislation banning alcohol at football matches. The new bill, setting a number of rules for the World Cup, does not mention any restriction on the sale of alcohol (BBC).

AMAZON

Deforestation rates in Brazil’s Amazon rainforest have fallen to the lowest level in more than 20 years, the Brazilian government said (Xinhua).

Brazil workers are being exploited as modern-day Amazon slaves. Slavery victims are promised work and find themselves toiling in brutal conditions for little or no pay in the Amazon. A culture of impunity persists (LA Times).

The fund that was created in 2008 to support environmental preservation activities in the Amazon is running into trouble with other demand on the BNDES, the Brazilian development bank, but also with the lack of preparation from civil society organizations and the lack of projects from the government (Folha).

Activists and residents of the region affected by the Belo Monte hydroelectric project on the Xingu River (PA), are preparing a parallel protest during Rio+20. Xingu+23-an allusion to the 23 years since the first Meeting of Indigenous People of Xingu-will be between June 13 and 17 in a community near Vitória do Xingu (945 km from Belém) (Folha).

RIO

The arrival of the Rio+20 Earth Summit, for Brazil, is not only about the global sustainability progress that will be made. The international community is also closely watching to see how Rio will handle the management of such a large event, one of many now on the city’s agenda in the coming years, most notably the 2014 World Cup and 2016 Olympic Games. Read about the city’s security and transport plans (The Rio Times).

Rio’s Jardim Gramacho landfill, Latin America’s largest covering a land mass of 1.3 million square meters, officially closes today, June 3rd. Previously scheduled for a May 6th closure, the 35 year-old landfill located in Duque de Caixas has long been controversial and considered responsible for delivering tons of contaminants into Guanabara Bay (The Rio Times).

Santa Teresa has long been a popular tourist destination, with steep rolling cobblestone streets and a distinctly bohemian style of shops and restaurants. However, business in Santa Teresa has suffered since the closing of the trolley, locally known as the bonde, following a tragic accident last year (2011) on August 27th (The Rio Times).

Barra da Tijuca is well-known for having one of the longest stretches of beach in Brazil (20 km) as well as generally less expensive and more spacious living than in Rio’s Zona Sul (South Zone). Barra, as it is popularly called, is also a cultural and economic center of Rio’s Zona Oeste (West Zone) home to many expatriates in Rio (The Rio Times).

The IOC said Rio de Janeiro is making “great strides” in preparations for the 2016 Olympics but warned of tight deadlines and a considerable increase in the amount of work and responsibilities after the London Games end in a few months. The IOC coordination commission ended its annual three-day visit saying Rio officials and local organizers must be prepared to take center stage after Rio Mayor Eduardo Paes receives the Olympic flag in 67 days in London (Washington Post).

SPLIT SECOND POLL

SAO PAULO

Consumer prices in Sao Paulo, Brazil’s largest city, slowed in May from the previous month on lower costs of personal expenses and apparel. The IPC-FIPE index rose 0.35 percent last month, compared with an increase of 0.47 percent in April, according to the FIPE economic research institute (Reuters).

You could almost be in a London gentlemen’s club at the bar at the top of landmark Edificio Itália, if it weren’t for the floor-to-ceiling windows providing a 360-degree view of the city. Here on the 41st floor, you are above the city’s other skyscrapers bar none, and even above the helicopters below (Time Out).

The Swedish group Haldex has chosen São José dos Campos to consolidate its activities in South America. In March, the company completed its project of transferring the sales unit in São Paulo and the industrial units in Rio de Janeiro and Flores da Cunha (Rio Grande do Sul) to the city. With the transfer, the company intends to gain agility and optimize the logistics and transportation costs (Investe Sao Paulo).

Brazil Politics & Government News

In Brazil on June 1, 2012 at 9:33 am

POLITICS

Brazil’s political establishment is being shaken by a claim that Luiz Inácio Lula da Silva, the country’s most influential contemporary political leader, put pressure on a high court judge to delay a trial over a vote-buying scandal involving high-ranking members of the governing Workers Party (The New York Times).

Forest Code: the president’s effort to balance the claims of forests and farms has satisfied few. An opportunity to promote sustainable farming may be missed (The Economist).

As environmentalists around the world come to grips with President Dilma Rousseff’s last-minute veto of parts of the country’s revised environmental protection laws, the diplomat’s answer sheds light on the challenge of regulating the region from the Brazilian point of view. For many outside the country, the Amazon is the primeval paradise idealized in James Cameron’s film Avatar. For many in Brazil, it’s the Wild West: a dangerous, hostile place, where the gun is the law and the government has limited control (Bloomberg).

A pair of women’s underwear that fell out of a Brazilian legislator’s briefcase on the floor of Congress two weeks ago has been incinerated after no one stepped forward to claim them (Reuters).

Brazil’s central bank created a post on its board to improve transparency and communications two weeks after President Alexandre Tombini said it’s increasingly important for central banks to provide “forward guidance” to the market (MercoPress).

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INTERNATIONAL

Foreign Minister Antonio Patriota said that hard-won economic gains over the past decade have given Brazil enough clout in global commerce and diplomacy for the country to remain a player even as its once-booming economy sputters because of uncertainty in Europe, slowing growth in China, and a decline in prices of commodity exports (Reuters).

A prominent Bolivian opposition politician has taken refuge in the Brazilian Embassy in La Paz, claiming that he is being persecuted by the administration of President Evo Morales for accusing government officials of human rights abuses, drug trafficking and corruption (The New York Times).

A growing number of foreigners are flocking to Brazil. The number of work visas granted jumped 26 percent last year to 70,524, the highest since at least 2005, led by applicants from the U.S., Labor Ministry statistics show. Brazil added 2 million jobs in 2011, half in the services industry, even as economic growth slowed to 2.7 percent from 7.5 percent in 2010 (Bloomberg).

Brazilian authorities promised to hold a sustainable, accessible and secure U.N. Conference on Sustainable Development (Rio+20). The sustainability initiatives for the meeting will feature waste sorting and biofuel generators, and exposition on several countries’ successful initiatives in sustainable development will also be held, said Laudemar Aguiar, national secretary of the Brazilian government’s Organization Committee for Rio+20 (Xinhua).

The air travel of conference participants, which is the main source of greenhouse gas emissions from Rio+20, will not be compensated by the committee created by the Brazilian government for the event. According to the committee, it will be up to each country to decide if they will neutralize the emissions generated by air travel of its delegation (Folha).

Spain’s King Juan Carlos will be travelling to Brazil and Chile in the first week of June to strengthen ties with two strategic associates and in preparation of the Ibero-American summit to take place in Cadiz. The King will be accompanied by Foreign Affairs minister Jose Manuel Garcia-Margallo and a business delegation (MercoPress).

The BNDES and the Bradesco S/A Bank signed the first contract for financing exports that can be used for the sale of capital goods manufactured in Brazil to African countries.  The line of credit, up to US$ 200 million, will be transferred by Bradesco’s international agencies and utilized to finance importers of Brazilian machinery and equipment. In addition to Africa, exports to Latin America will also be financed (BNDES).

DEFENSE & SECURITY

Defense Minister Celso Amorim said the country’s growing need to protect its borders, the Amazon rainforest, and massive offshore oil discoveries would lead it to gradually increase defense spending by a quarter to reach roughly 2 percent of Brazil’s economy (Reuters).

Brazil will deploy 15,000 security forces for the UN Conference on Sustainable Development (Rio+20) to be held here in June, Defense Minister Celso Amorim said (Xinhua).

Sweden’s premier defense and security company, Saab, is strengthening its relationship with a Brazilian integrator of aero-structures. Saab, manufacturer of the Gripen jet fighter that has partnered in the past with the company Akaer, said it is now financially investing in the company (MercoPress).

Embraer S.A. and Telecomunicações Brasileiras S.A. (Telebras) signed a shareholder agreement to form Visiona Tecnologia Espacial S.A., whose capital will belong 51% to Embraer and 49% to Telebras. Initially, Visiona will focus on the Brazilian Geosynchronous Satellite, in line with a Memorandum of Intent announced in November 2011. The Brazilian Geosynchronous Satellite will serve the satellite communications needs of the Federal Government, including the National Broadband Program and a wide range of strategic defense transmissions (Embraer).

SOCIAL

The Brazilian government has a new definition for the Brazilian middle class. A commission of specialists at the Secretariat of Strategic Affairs (“SAE”), housed in the presidency, using family income as the basic metric, defines the new middle class as individuals living in a family unit with per capita monthly income between R$291 and R$1,091 (Agencia Brasil).

SPLIT SECOND POLLS