Archive for the ‘Brazil’ Category

Brazil economy to contract nearly one-quarter this year in dollar terms

| May 26th, 2015 | No Comments »
Financial Times

Brazil’s economy is expected to contract by nearly one-quarter this year in dollar terms due to a depreciating currency and a deepening recession, according to government figures.

Brazil’s planning ministry revealed in a budget presentation that gross domestic product was expected to be $1,812bn this year, down 23 per cent from $2,353bn a year earlier, as President Dilma Rousseff tries to unwind a multiyear stimulus programme that has left government finances bleeding red.

“We know that in a populist model you have a fake sense of prosperity in the short term,” said Alberto Ramos, economist with Goldman Sachs. “So after populism comes the adjustment and the adjustment is basically just giving back all these fake gains.”

Brazil’s economy is facing a hangover with the end of the commodities supercycle and government efforts to prolong a consumption and credit-led boom.

Much of the expected fall in Brazil’s economy in dollar ... Read More

Brazil Budget Not Conducive To Reality, FinMin Says

| May 26th, 2015 | No Comments »
Forbes

By Kenneth Rapoza

Brazil’s federal budget needed some slicing and dicing in the financial editing rooms in the capital city last month because it was “nowhere close”  to reality, Finance Minister Joaquim Levy said on Monday.

The Brazilian economy is going through a serious economic correction. With the commodity super cycle over, Brazil got hammered by keeping rates artificially low for too long in the first term of president Dilma Rousseff.  At the time, the government was fighting a “currency war” against a weak U.S. dollar that led to hot money flowing into Brazil’s currency and debt markets. A stronger currency didn’t match the fundamentals of a weakening economy, cutting Brazil out of some competition in foreign markets, and leading to an increase in imports as local manufacturers could not compete with similar product makers abroad. Inflation rose. The economy slowed even more. Now there’s hell to pay. ... Read More

The Cost of Corruption in Latin America

| May 26th, 2015 | No Comments »
Bloomberg

By Mac Margolis

Guatemalans are steaming. Crowds of them have poured into the streets this month —  some 60,000 on May 16 alone  – to protest  corruption and demand the ouster of President Otto Perez Molina.

Triggered by the scandal over a giant scheme of import tax fraud, the widening crisis already has toppled the nation’s vice president, the energy minister, the Central Bank governor and interior minister.

Social upheaval has a deep history in Guatemala, where Marxist-inspired guerrillas battled security forces from 1960 to 1996, leaving 200,000 dead.

What’s new, and encouraging, is the popular revolt against resurgent corruption, which has reignited partisan feuds and sapped confidence in the country’s still-wobbly democratic institutions at a time when this nation of more than 14.6 million may need them most.

Latin America is no stranger to bureaucrats on the take. The region traditionally merits dismal ratings on Transparency International’s annual corruption perception ... Read More

Brazil’s Economic Downturn, Corruption Scandals Shake Leader

| May 22nd, 2015 | No Comments »
Wall Street Journal WSJ-01

POR JOHN LYONS AND PAULO TREVISANI 

BRASÍLIA— Dilma Rousseff survived torture and cancer to become Brazil’s first female president. Now the former leftist-militant faces another challenge: saving her presidency and stanching the deterioration of Latin America’s biggest economy.

Her second term has barely begun. But Ms. Rousseff is beset by protests, while lawmakers openly weigh impeaching her over an alleged $2.1 billion embezzlement scheme at the state oil company, Petróleo Brasileiro SA PETR4.BR -0.90% . The currency has plunged, inflation is rising and the economy is entering what may be its worst recession in 25 years.

In some neighborhoods, Ms. Rousseff’s mere appearance on television has been enough to send residents to their balconies clanging pots and pans in noisy protest.

Whether the 67-year-old leader will regain her footing has become a critical question for a nation struggling to prevent its troubles from growing into a full-blown crisis. Ms. Rousseff’s approval rating fell to 13% in April from 65% two years earlier, one poll showed. Analysts ... Read More

China and Brazil are becoming BFFs. Should we be worried?

| May 21st, 2015 | No Comments »
From the Washington Post

By Dom Phillips

RIO DE JANEIRO — The big question after the announcement of a potential $53 billion investment agreement between Brazil and China on Tuesday is whether it should be a cause for concern, especially as the deal includes discussions about defense, plans for a ‘bi-oceanic’ railway to connect Brazil’s Atlantic coast to Peru’s Pacific rim, and talk of a “new global order.”

The answer: Not too much, at least not yet, because the 36 agreements — in mining, oil, infrastructure, technology and agriculture — that the countries signed as Chinese Prime Minister Li Keqiang began a South America tour in Brasilia on Tuesday were really about business, not geopolitics.

“It’s the story that’s been playing out for several years of a more intense relationship between Latin America and China,” said João Augusto de Castro Neves, Latin America director in the Washington office of the Eurasia Group, a political risk consulting outfit. ... Read More

China Premier Li Unveils Billions of Dollars in Financing, Trade Pacts in Brazil

| May 20th, 2015 | No Comments »
Wall Street Journal WSJ-01

BY PAUL KIERNAN AND PAULO TREVISANI

RIO DE JANEIRO—Chinese Premier Li Keqiang kicked off a tour of South America on Tuesday by unveiling billions of dollars in financing and trade agreements for Brazil’s biggest companies, part of a broader effort to deepen ties with the region despite an economic slowdown.

The investments are largely aimed at strengthening Brazil’s aging infrastructure and at helping the commodity-dependent nation weather lower prices for metals, crude oil and other commodities. After riding the coattails of China’s breakneck growth in the last decade, Latin America’s largest economy is widely expected to fall into recession this year—partly due to softening demand from China.

Ceremonious announcements of big Chinese investments have become more frequent in Latin America during recent years as the Asian nation sought to secure access to the raw materials needed to expand its economy.

But often, the plans don’t pan out. A study by the Brazil-China Business Council, a local think tank, ... Read More

Frustration with Latin America’s left on the rise

| May 19th, 2015 | No Comments »
Article originally appeared in the Associated Press

By JOSHUA GOODMAN

CARACAS, Venezuela (AP) — Venezuela’s socialist government is struggling to put food on the shelves amid runaway inflation. Brazil’s president is facing calls for impeachment. And even Cuba’s communist government, an iconic touchstone for generations of leftists, is embracing closer ties with the U.S.

Whether it’s because of corruption scandals or stagnant growth, the popularity of the crop of leftist Latin American governments that have been running the region since the start of the millennium appears to be waning. Voters who embraced what became known as the pink tide that swept away the pro-Washington, free-market policies dominant in the 1990s are increasingly turning against the populist firebrands they once rallied behind.

Across the region, polling numbers are tanking and street protests are on the rise.

Triggering the growing disenchantment are some serious economic headwinds. Most leaders came into power just ... Read More

Susan Kaufman Purcell: The New Normal in Latin America

| May 18th, 2015 | No Comments »
Latin American Herald Tribune

By Susan Kaufman Purcell

At the recent Summit of the Americas in Panama, the topic that received the most attention was the U.S. decision to normalize diplomatic relations with Cuba. This allowed the historic handshake and the official talks between Presidents Barack Obama and Raul Castro that ended half a century of diplomatic isolation.

Various polls have shown, however, that that the diplomatic problems between the United States and Cuba have not been a major concern of Latin Americans. Why then were the Latins so enthusiastic about this particular change in U.S. policy toward the region?

The answer was not that normalization would bring an end to the Castro dictatorship, since Latin America has not cared whether Cuba remained a dictatorship. Nor were Latin American governments preoccupied that the inflow of dollars to Cuba following the normalization of relations would mainly benefit Cuba’s unelected and wealthy rulers, especially the military, which controls the ... Read More

Beijing to Unveil South America Investments

| May 18th, 2015 | No Comments »
Wall Street Journal WSJ-01

By PAULO TREVISANI and ROGERIO JELMAYER

BRASÍLIA—Chinese Prime Minister Li Keqiang is set to bring greater financial support to South America this week, part of Beijing’s broader effort to reassure developing countries that have been hit by China’s declining demand for raw materials.

On Tuesday, Mr. Li is expected to discuss with Brazilian President Dilma Rousseff plans to build a giant railway, corporate acquisitions and the disbursement of billions of dollars for the overhaul of Brazil’s aging infrastructure as South America’s largest economy gears up for the Rio Olympics next year.

Later in the week, Mr. Li will visit Colombia, Peru and Chile, seeking to reassure trading partners that China’s slowdown won’t affect Beijing’s engagement in the region. Beijing is proposing deals in which China buys finished products instead of only commodities. Already, Chinese lenders have become some of Latin America’s top investors.

“China is putting money in companies and assets that are undervalued,” said Sergio Amaral, a Brazilian diplomat and former trade ... Read More

Frustration with Latin America’s left on the rise as leaders hit by economic slowdown, scandal

| May 18th, 2015 | No Comments »
Star Tribune

By JOSHUA GOODMAN

CARACAS, Venezuela — Venezuela’s socialist government is struggling to put food on the shelves amid runaway inflation. Brazil’s president is facing calls for impeachment. And even Cuba’s communist government, an iconic touchstone for generations of leftists, is embracing closer ties with the U.S.

Whether it’s because of corruption scandals or stagnant growth, the popularity of the crop of leftist Latin American governments that have been running the region since the start of the millennium appears to be waning. Voters that embraced what became known as the pink tide that swept away the pro-Washington, free-market policies dominant in the 1990s are increasingly tuning hostile against the populist firebrands they once rallied behind.

Across the region, polling numbers are tanking and street protests are on the rise.

Triggering the growing disenchantment are some serious economic headwinds. Most leaders came into power just as China’s economy was ... Read More

Things just keep getting worse for Brazil

| May 15th, 2015 | No Comments »
Business Insider

By WOLF RICHTER

The “B” in the falling BRICS…

Brazil is in a tough spot. Led by weak investment and plummeting confidence, growth, after slowing markedly since mid-2013, came to a virtual halt in 2014. This largely reflects the impact of diminished competitiveness, the erosion of policy credibility, owing to a persistent deterioration of fiscal outcomes and above-target inflation, and a worsening of external conditions for the country.

Risks to the outlook are significantly to the downside, and include adverse ramifications from the ongoing corruption probe concerning Petrobras, the possibility that fiscal policy goals may not be fully met, and energy and water rationing.

External downside risks emanate from a tightening of global financial conditions, geo-political tensions, and contagion from adverse developments in other emerging economies.

These risks could conflate if they were to combine with domestic policy shortfalls, and would threaten macro and financial stability.

The ... Read More

IMF Says Brazil Must Pursue Austerity, Meet Targets

| May 12th, 2015 | No Comments »
Wall Street Journal WSJ-01

By PAULO TREVISANI

BRASÍLIA—Brazil’s government needs to implement its plans to improve its financial situation and bring price increases under control to help restore confidence, competitiveness and growth to the economy, the International Monetary Fund said in a report published Tuesday.

“Fiscal consolidation should proceed without delay along the announced lines, while monetary policy should remain tight to bring inflation to target,” the report said.

Finance Minister Joaquim Levy, who took office in January, is pushing spending cuts and higher taxes to plug a budget hole caused by years of costly economic stimulus.

He has set an ambitious target of a primary budget surplus—before interest payments—equal to 1.2% of gross domestic product, reversing a primary deficit of 0.6% of GDP in 2014. At the same time, the country’s central bank is raising rates to tame inflation.

“Brazil is in a tough spot,” the IMF said. “A new economic-policy team is faced with the challenge of restoring policy credibility ... Read More

Caen otros 3 políticos brasileños acusados de corrupción en caso Petrobras

| May 11th, 2015 | No Comments »
Acento

Río de Janeiro, 11 may (EFE).- La Policía Federal brasileña anunció hoy que presentó cargos contra 30 personas más, entre ellos tres exdiputados, por el caso de corrupción en la petrolera estatal Petrobras.

Los acusados hoy están presos desde el pasado abril en el marco de la undécima fase de la operación policial, y son sospechosos de delitos como corrupción, fraude en licitaciones, lavado de dinero y pertenencia a organización criminal, según un comunicado de la Policía.

Entre los arrestados en abril figuran los exdiputados André Vargas, que era correligionario de la presidenta brasileña, Dilma Rousseff, en el Partido de los Trabajadores (PT); Pedro Correa, del oficialista Partido Progresista (PP) y Luiz Argolo, del opositor Solidaridad (SD).

A lo largo de las investigaciones, han sido arrestados cinco exaltos cargos de Petrobras y una veintena de ejecutivos de importantes constructoras que tenían contratos con Petrobras.

... Read More

Analysts expect Brazil’s economy to contract 1.2 pct.

| May 11th, 2015 | No Comments »
From Fox News Latino

Analysts expect Brazil’s gross domestic product (GDP) to contract 1.2 percent this year, the Central Bank said Monday.

The GDP estimate comes from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy.

The new estimate represents a worsening of the outlook for Brazil’s economy, which analysts in the previous edition of the survey expected to contract by 1.18 percent.

Analysts surveyed for the Boletin Focus expect Brazil to finish 2015 with an inflation rate of 8.29 percent, up from the 8.26 percent estimate released last week.

The inflation rate was 0.71 percent in April and came in at 4.56 percent during the first four months of this year, a figure that was above the government’s target for the entire year.

The government’s official inflation target is 4.5 percent for ... Read More

Hezbollah en América Latina: el narcotráfico, su principal fuente de financiamiento

| May 11th, 2015 | No Comments »
Infobae

Las actividades delictivas del grupo terrorista Hezbollah en la región continúan su ascenso sin que ninguna alarma se encienda en los Gobiernos de América Latina. Incluso en muchos casos, las autoridades de algunas administraciones regionales son cómplices de sus movimientos. Tráfico de drogas, de armas, de influencias, lavado de dinero y otras maniobras ilícitas son las elegidas por las células que la agrupación libanesa mantiene a lo largo de esta parte del mundo.

Desde 2006 a la fecha, fue sobre todo el narcotráfico la vía que más dinero aportó al financiamiento de Hezbollah. Bajo diferentes fachadas, jefes regionales del grupo terrorista se instalaron en diferentes ciudades latinoamericanas para tapar sus verdaderos propósitos. Mezquitas, centros culturales islámicos, comercios y otras organizaciones sin apariencia política reúnen a cientos de fieles, quienes en muchos casos son “utilizados” por la agrupación extremista.

Es la Triple Frontera (conformada por Paraguay, Brasil y la Argentina) la “capital” de ... Read More

The Betrayal of Brazil

| May 8th, 2015 | 1 Comment »
Bloomberg

By Michael Smith, Sabrina Valle and Blake Schmidt

In mid-2013, Brazilian federal police investigator Erika Mialik Marena noticed something strange.

Alberto Youssef, suspected of running an illicit black-market bank for the rich, had paid 250,000 reais (about $125,000 at the time) for a Land Rover. The black Evoque SUV ended up as a gift for Paulo Roberto Costa, formerly a division manager at Brazil’s national oil company, Petrobras. “We were investigating a money-laundering case, and Petrobras wasn’t our target at all,” says Marena. “Paulo was just another client of his. So we started to ask, ‘Why is he getting an expensive car from a money launderer? Who is that guy?’”

Marena had spent the previous decade building cases against money launderers, and Youssef had been a perennial target. He’d been arrested at least nine times for using private jets, armored cars, clandestine pickups by bagmen, and a web of front companies to move illicit ... Read More

Brazil increases pressure on Venezuela to set election date

| May 8th, 2015 | No Comments »
Article originally appeared in Reuters

May 7 Brazil urged Venezuela’s government on Thursday to set a date for a parliamentary election as soon as possible, stepping up pressure on its leftist ally and neighbor to resolve a simmering political crisis.

Brazilian Foreign Minister Mauro Vieira said he met with Venezuelan government officials this week and told them a date must be set quickly for the National Assembly election that is meant to be held before the end of the year.

“I insisted that elections should be called as soon as possible and held within the legal time frame,” Vieira said at a news conference.

Venezuelan President Nicolas Maduro’s opponents see the parliamentary election as a chance to capitalize on widespread discontent over a deepening economic crisis and advance towards ending more than 15 years of socialist rule.

Surveys show Venezuela’s opposition leading in projections of voters’ intentions and Maduro’s popularity has ... Read More

Latin America leads world on murder map, but key cities buck deadly trend

| May 6th, 2015 | No Comments »
The Guardian UK

By Jonathan Watts

Latin America may be the most murderous continent on Earth, but huge improvements in public safety have been achieved in several major cities, according to a new homicide map of the world that is being launched this week.

Several metropolises that were once bywords for violent death – such as Medellín, Bogotá, São Paulo and Rio de Janeiro – have seen declines of more than 60% in the murder rate over the past two decades thanks to improved living standards, better education, decelerating urbanisation and more effective policing, say the researchers behind the Homicide Monitor.

But while overall figures are falling, the map reveals that murders are stubbornly concentrated in poor communities, and the victims are mostly young – usually black or mixed-race – men.

The Monitor is an interactive online world map with data on the distribution of murder by country, year, age of victim and – where figures are available ... Read More

Brazilian Economy Struggles to Take Off

| May 5th, 2015 | No Comments »
Wall Street Journal WSJ-01

By LORETTA CHAO and ROGERIO JELMAYER

SAO PAULO, Brazil—With Brazil dogged by drought, a sluggish economy and a corruption scandal at its most important company, businesses in Latin America’s largest economy have little to be optimistic about.

Economists expect Brazil’s gross domestic product to contract 1.18% this year and growth of just 1% in 2016. Federal prosecutors are in the midst of an investigation involving hundreds of millions of dollars allegedly skimmed from Brazil’s state-run oil giant, Petroleo Brasileiro SA, by the country’s top construction companies. A multiyear drought is threatening water supplies in São Paulo state, which accounts for 40% of Brazil’s industrial production.

All that makes this a fraught time for business in Brazil, which, fueled by a commodities boom, reached 7.6% economic growth in 2010 but has been slowing ever since. Amid bad news and uncertainty, the hope that the country would become an economic superpower has fizzled. Executives and investors say sentiment about Brazilian business ... Read More

Prosecutors in Brazil investigate Lula for alleged influence peddling

| May 4th, 2015 | No Comments »
Financial Times

By Samantha Pearson

Brazil’s federal prosecutors have opened a preliminary investigation into the country’s wildly popular former leader Luiz Inácio Lula da Silva for illicit influence peddling in Cuba, among other countries, putting further pressure on his embattled protégée President Dilma Rousseff.

The prosecutors’ office in Brazil’s capital Brasília confirmed late on Sunday reports by a local magazine that Mr Lula da Silva is being questioned by their anti-corruption unit over claims he helped construction conglomerate Odebrecht win contracts overseas between 2011 and 2014.

Weekly magazine Época alleged on Friday that Mr Lula da Silva improperly used his influence to obtain loans from Brazil’s state development bank BNDES for Odebrecht’s dealings in Cuba and the Dominican Republic, often travelling to meet the countries’ leaders at the company’s expense. The magazine also accused Mr Lula da Silva, one of the founders of the ruling Workers’ Party (PT), of similar influence peddling in ... Read More

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