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Wow! We're growing again!

Brazilian GDP rises after a two-quarter recession. Nepotism runs amok in the Senate. Unemployment goes down. A big beer company gets caught in the act. A race car star is gravely injured (but can still answer questions in three languages). C-sections are preformed in 84.5 percent of births.

Top News: It’s unofficial but excellent economic news: economists of two of the country’s biggest banks, Bradesco and Itau Unibanco, have determined that Brazilian GDP rose in the second quarter of 2009, which would mean the two-quarter recession was over and (if you go for over-simplified sound bites) so is the financial crisis. “The way things are going, we’ll not only have growth, but very positive growth,” Itau Unibanco’s chief economist, Ilan Goldfajn, was quoted as saying.  The banks’ forecast ranges for the second semester vary between 1.5 and 2.2 percent, but official numbers won’t be out for a while, and banks have been wrong before.


The cover headline on the country’s top business magazine, Exame, shouts “WOW! We’re growing again!” The accompanying article cites job creation, increasing investment by businesses, and yes, McDonald’s plans to open 26 stores across Brazil by year’s end.


The economy is not the only thing growing: swine flu deaths are increasing, more than doubling in the last week to a total of 45 as of Tuesday afternoon, according to the Estado de São Paulo. Or is it 56, as the equally reliable O Globo says? Either way, swine flu fear has grown, especially in the states of Sao Paulo and Rio Grande do Sul, the latter on the border with Argentina, South America’s swine flu central. On Tuesday, the state of Sao Paulo announced it would delay the re-start of public schools (after the winter break) from next Monday until August 17.


The Senate is also in recess, but the revelations keep coming about the body’s embattled president, Jose Sarney and his family (which includes the governor of Maranhao state, Roseana Sarney). The latest: Estado de Sao Paulo made public transcripts of wiretapped phone conversations that appear to show the senator, his son and his granddaughter discussing arranging a job in the Senate for the granddaughter’s boyfriend. (There are strong anti-nepotism laws on the books, although the Sarney patriarch has offered the ‘everybody does it’ argument, which is probably close to true.) It was also revealed that the government is also investigating several businesses owned by his family, alleging money laundering and other charges. President Lula has toned down but not stopped his defense of the political ally.


Anyone interested in a primer (in Portuguese) on Sarney’s political party and why it is so important to Lula’s governing coalition should take a look at Veja magazine’s cover story this week. (Grain of salt alert: Veja, the country’s most important newsweekly, is often accused of explicit right-of-center bias.)


Money: The theoretical end to the recession was accompanied by another piece of good news: Unemployment for June (in the six biggest Brazilian cities) was down sharply to 8.1 percent from 8.8 percent in May, almost dipping to pre-crisis June 2008 levels (7.9 percent).  And the consistent, month-by-month lowering of the Selic, Brazil’s benchmark interest rate, may have ended. As officials lowered the rate from 9.25 percent to 8.75 percent, they also implied that that the rate was ideal for maintaining “benign inflation” and spurring growth. Fear of inflation has generally kept the interest rate sky-high: it reached 19.75 percent in May, 2005.


Brazil’s dominant beer producer, Ambev — a subsidiary of global giant Anheuser Busch Inbev — got nailed by the federal government with a fine of 352.7 million reais (about $186 million) for unfair competitive practices. More specifically, it involved a policy that pressured bar owners to offer their products exclusively in exchange for participation in a rewards program. Ambev will apparently appeal.


O Globo had a big gotcha scoop, finding that after the federal government had eliminated a tax known as the CPMF last year, it was still including the tax in payouts to companies with which it has contracts. The companies, which no longer had to pay the tax, kept it as extra profit.


The United States Senate Foreign Relations Committee has approved a new ambassador to Brazil, career diplomat Thomas Shannon, but Senator Charles Grassley of Iowa has threatened to delay the full Senate’s approval over concerns that Shannon favors removal of a tariff that protects American ethanol producers. Shannon speaks Portuguese and is generally well-liked in Brazil, where he worked in the American embassy from 1989 to 1992. He also served as assistant secretary for Western Hemisphere Affairs during George W. Bush’s second term.


Brazil has agreed to triple what it pays for power from the Itaipu dam in Paraguay, which will result in a financial loss but a diplomatic win with Paraguay’s leftist leader, Fernando Lugo. Brazil has paid below-market rates since 1985, when Paraguay agreed to reduce fees during the disastrous Brazilian financial crisis.


Elsewhere:  Brazilian Formula1 driver Felipe Massa was gravely injured in a freak accident during qualifying at the Budapest Grand Prix. A spring came loose from fellow driver Rubens Barrichello’s car and hit him in the head, fracturing his skull. [See video of the accident here.] Brazilian sports fans are Formula1-crazy, and have followed his condition obsessively. The latest news is that he is alert and “answering questions in three languages,” though not completely out of danger. Fans are sending their wishes directly via a Twitter feed set up for that purpose. Hardly a surprise, since Brazilian leads the world in percentage of Internet users that use Twitter.


Massa’s injury overshadowed another key but comparatively minor Brazilian sports casuality in Sao Paulo: in a 3-0 loss against cross-town rival Palmeiras, Corinthians’ superstar Ronaldo broke two bones in his left hand and will miss about a month of Brazilian league play. It is unclear whether this will impact his recently-landed role in an Iranian film, which was to be filmed in the West Bank during Corinthians’ upcoming trip there. 


Finally, Folha reported last week that Cesarean sections are performed in a stunning 84.5 percent of births in private hospitals in Brazil.  That’s up from 79 percent in 2004 and starkly higher than the WHO’s recommended 15 percent rate.