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Chinese imports from Brazil have increased nearly 12-fold since 2001. In Beijing, Lula inks a $10 billion oil loan, and discusses doing business in a currency other than the US dollar. A merger would give Brazil the world’s largest processed meat exporter. Petrobras is under investigation. And a special prison for gays.
Top News: As of April, China is now the top purchaser of Brazilian exports, pulling ahead of the United States, which has been the principle trading partner for almost 80 years. Possibly temporary and certainly caused by the recession, it’s still looked upon here as symbolic of Brazil’s ascendency.
Not entirely coincidentally, Lula is currently in China with a delegation of government officials and business leaders. (The same trip brought him to Saudi Arabia, the first ever diplomatic visit by a Brazilian president there.)
One major purpose of the trip is to secure a multi-billion dollar loan for Brazil to exploit the huge but difficult-to-tap the Tupi oil reserve discovered in 2007 off the Rio de Janeiro coast. On May 19, the two countries signed an agreement confirming that Petrobras would receive a $10 billion loan from China. The loan apparently includes a clause that would guarantee 200,000 barrels a day of oil be sold to China.
Beijing also agreed to eliminate restrictions on Brazilian chicken, and discussed the possibility of conducting trade between the two countries in a currency other than the U.S. dollar.
Hundreds of thousands remain homeless because of floods in Brazil’s poor northeast, although some reports say things are getting better. The New York Times sent Rio-based Alexei Barrionuevo into the flood zone; here is his report. As he and many others have noted, many are watching for how the flood relief efforts compare to what happened after floods in wealthier, whiter Santa Catarina state last year; the jury is still out.
And swine flu has hit. Brazil has eight confirmed cases and 20 suspected ones, spread out around the country. At least two cases were contracted within Brazil, when a young man who had been vacationing in Cancun returned and infected his friend, who then infected the friend’s mother.
Sixty-one-year-old Dilma Rousseff, a top minister to Lula and presumed Workers Party candidate for the presidency who is undergoing chemotherapy for non-Hodgkins lymphoma, is in the hospital in Sao Paulo because of post-treatment leg pain diagnosed as myopathy. Her presumed top opponent in the campaign (which has not officially started), Sao Paulo governor Jose Serra, is reportedly talking with another top candidate, Minas Gerais governor Aecio Neves, about becoming his VP running mate.
Data requested by Folha de Sao Paulo showed that Lula’s government has greatly expanded the size of the federal government, after it was sharply reduced by his predecessor Fernando Henrique Cardoso. FHC, as he is known, lowered the number of government workers from 661,000 to 598,000 while he was in office from 1995 to 2003; Lula has now hiked it back up to 671,000.
Money: Formal employment was up again in April, with over 106,000 new jobs registered by the government, bringing job creations into positive territory for 2009 after a disastrous December. The Labor Ministry said that most new jobs were created in the interior of the states, and demand for sugar and ethanol was in large part responsible for the jump. On the other hand, employment was down in industry: 5 percent down compared to March of 2008, and down 0.6 percent from February 2009.
The dollar had a volatile couple of weeks in Brazil, starting May at an exchange rate of 2.18 reais, which sank to 2.07 on May 8, rose up again, and is now down to 2.06.
The big business news is that two of Brazil’s huge food producers have merged. If Brazilian anti-trust authorities give the thumbs up (and the thumbs up is just about the most common gesture in Brazil) Perdigao and Sadia will become known as Brasil Foods, which would start out with an annual revenue of about $11 billion and $4.5 billion in exports. That makes it the largest processed meat exporter in the world and the tenth biggest food producer in the Americas (numbers 1, 2 and 3 are ADM, Kraft and Tyson).
Petrobras, the state oil company, has also been in the news: its profits fell 20 percent in the first quarter compared to the first quarter of 2008. In a controversial move, the Brazilian government, going against the wishes of the president, created a CPI, a congressional investigative commission, to examine a wide range of accusations of impropriety. The formation of the commission is seen by many as political. The president of Petrobras spoke out against the commission in Beijing.
Elsewhere: In gay lawbreakers news, a jail in Sao Joaquim de Bicas, Minas Gerais, now has a wing for homosexual, transsexual and transvestite prisoners. The creation of a separate area is meant to protect prisoners from anti-gay violence, and will also allow them to grow their hair long.