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Brazilian Blackout

Most of the country is left in the dark after short circuits cause a blackout. A college student's mini skirt makes international headlines. Brazil's GDP growth shows complete economic recovery. Job creation is the highest ever for the month of October. The dollar continues to flounder against the real. Amazon deforestation is at a new low. And an ambitious goal to curb greenhouse gas emissions is announced.

Top News:A blackout swept most of Brazil on the evening of Nov. 10, leaving Sao Paulo and Rio de Janeiro – the country’s two biggest cities – in the dark and affecting 18 of 26 states. Only the Amazon, Brasilia and some parts of the northeast were completely unaffected.


The first explanation officials offered was that storms and lightning had triggered the domino effect that shut down the Itaipu hydroelectric plant, the world’s second largest. But doubts soon arose, and the government backed off, with the administration’s primary strategy being avoiding directing any blame at Dilma Rousseff, former energy minister and the Labor Party’s choice to replace President Luiz Inacio Lula da Silva in the 2010 elections. On Monday, the government declared short circuits to be the cause.


Tourism student Geisy Arruda’s short pink dress caused a near-riot at the mediocre Bandeirante University campus in Sao Bernardo do Campo, Sao Paulo late last month, as she was followed and verbally assaulted by hundreds of fellow students in scenes that were posted on YouTube. On Nov. 8, she was officially expelled from school for her behavior (which the university said included pulling up the dress) and later reinstated.


Media coverage exploded and drove a nationwide discussion about moral standards and provocative dress. The foreign press coverage was often tinged with irony, considering that Brazil’s simplified image abroad is heavy on the skimpy bikinis and light on moral standards. Meanwhile, Geisy became a household name in Brazil (although one that no one seems to know how to spell: the otherwise reputable G1 news site spelled it three different ways in one article), and her face – and now famous pink dress – hit the television circuit. The editor of the Brazilian edition of Playboy expressed interest in having her pose for a pictorial.


Money: Preliminary estimates by government officials for the country’s third quarter GDP predicted around 2 percent growth (or a 9 percent annualized rate), further cementing the now-common worldwide refrain that Brazil emerged quickly from the worldwide financial meltdown and is heading full steam ahead for a year of growth in 2010. See also the Economist’s special report on Brazil.


With industrial employment leading the charge, a quarter-million formal sector jobs were created in October, the most ever for the month, and pushed the 2009 net gain close to 1.2 million. (It is expected to fall back closer to a million when seasonal layoffs occur in December.) Formal jobs – which come with Brazil’s wide array of worker protections – are only a portion of the Brazilian labor market, but are regarded as an important economic indicator. Carlos Lupi, the Labor Minister, predicted that over two million formal jobs would be created in 2010. The automobile industry also looks strong, with car sales expected to exceed expectations for 2009 and some plants (including the Renault/Nissan factor in Sao Jose dos Pinheiros) are postponing traditional December leave until January to meet production needs.


The dollar continued to flounder against the real, floating around the 1.70 to 1 mark, erasing the jump it made in response to the government’s new tax on foreigners investing in Brazilian financial instruments.  On television, Treasury Minister Guido Mantega indicated that the ideal exchange rate would in fact be 2.60 to 1, citing a Goldman Sachs study.


Brazil published a list of American products subject to retaliatory measures authorized by the World Trade Organization because of the United States’ unfair subsidies to the domestic cotton industry. The list runs from wheat to beauty creams.


Elsewhere:  The government announced that deforestation in the Amazon is at its lowest level since measurements began in the 1980s, at just over 2,700 square miles in the first seven months of 2009.


Brazil then caused a second environmental splash by announcing its national goals for reducing greenhouse gas emissions: 36 to 39 percent in 2020, compared to projected emissions if no changes were made. The figure was praised worldwide and seen as the most aggressive among emerging nations, but the news was somewhat dampened by the collapse of international efforts at a climate change accord at next month’s Copenhagen summit.


Finally, on a political note, federal deputy Ciro Gomes of the Brazilian Socialist Party, who has been polling decently as a potential presidential candidate in next year’s elections, announced that he would not run for president if Minas Gerais governor Aecio Neves is the candidate of the PSDB, the main opposition party. Neves is the underdog to Sao Paulo governor Jose Serra to win that nomination.