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Despite a damaging flip-flop on abortion Dilma Rousseff is expected to win Sunday’s election. Lula’s legacy is a glitzier, richer Brazil. Cell phone rates are highest in Brazil. The global currency war heats up. A Sao Paulo bandit gets stuck in traffic.
Brazil’s runoff presidential election is Sunday, and Worker’s Party candidate Dilma Rousseff now appears to lead by a safe margin over challenger Jose Serra, of the conservative PSDB party.
The election went to a run-off after surprising turnout for Green Party candidate, former environment minister and pro-life evangelical Marina Silva, who took 19 percent of the first-round vote. Although Serra’s campaign was never able to mount a credible threat (here’s Reuters with a story about last-ditch campaigning in Minas Gerais, the “Brazilian Ohio”), it did put a scare in the Worker’s Party by drawing attention to Rousseff’s past comments in favor of legalizing abortion. Rousseff dismissed the accusations as a “sordid campaign of calumny” but went for the flip-flop, assuring Catholics and evangelicals that she opposes abortion and supports current Brazilian law, which outlaws terminating fetuses except in special cases. Read details on the abortion debate here.
So who is Dilma Rousseff, really? Campaign handlers carefully controlled her image and allowed little media contact. But one thing is for sure — she’s no shrinking violet. A colorful essay in the New York Times reviews her past as a leftist guerilla, noting that “she handled weapons,” “imposed herself among men,” was twice divorced and went by the nom de guerre “Stella.” In other words, all signs indicate that Brazil’s next president is likely to be a force to be reckoned with, both at home and the international stage.
Current President Luiz Inacio Lula da Silva heads out of office with a popularity rating over 80 percent, and leaves behind a country that is “glitzy, rich, and dynamic” according to The Guardian. Could Lula go down as Brazil’s greatest leader of all time? Not if former two-term president Fernando Henrique Cardoso has his way. The ex-leader continues to try to get his share of the credit for Brazil’s boom. “I did the reforms. Lula surfed the wave,” he tells the Financial Times in a lengthy interview. Rousseff’s election, he says, will just mean more delay on needed government reforms like cutting back taxes, or paring pension benefits.
Despite Brazil’s rapid economic growth, the country hasn’t scored the kind of huge gains in worker productivity seen in Europe in the U.S.. Here’s one reason: According to an article in Veja, Brazil’s cell-phone rates are the highest among emerging economies. It’s so expensive, people literally avoid speaking on the phone. That’s not good for productivity. Taxes are a main reason for the high prices.
After a 20-year hiatus, Brazil is pressing forward with plans for some 24 large hydroelectric projects in the Amazon region, including the $8 billion dollar Santo Antonio dam profiled by the Wall Street Journal. The projects have raised substantial environmental concerns over the effects on the rain forest region, now suffering from a severe and unusual drought.
The global economic slowdown is leading countries to try to protect their economies by depressing their currencies. That helps exports. But what if everyone does it? In a widely quoted comment, Finance Minister Guido Mantega called rising tensions over currencies an “exchange war, a trade war” and accused Washington of creating distortions by printing money and depressing the value of the dollar. Mantega asked the International Monetary Fund to create a currency-manipulation index.
To try to contain the rise in value of the Brazilian real, Mantega doubled a tax on foreign investors buying fixed-income investments to 4 percent in early October, and two weeks later raised it again to 6 percent. The idea is to stop market speculators by cutting their profits.
Last month, it seemed like everyone wanted to buy a Brazilian advertising firm. This month, there’s a run on investment funds. Shortly after Blackstone Group said it would buy 40 percent of Patria Investimentos, a large private equity firm, J.P. Morgan announced it had bought a majority stake in Gavea Investimentos, a high-profile hedge fund and money manager in Rio de Janeiro run by former central bank president Arminio Fraga.
The financial crunch has made Americans more frugal. One sign is the speed at which they have been paying off credit card debt. Exactly the opposite it happening in Brazil, where the amount outstanding on cards jumped by 30 percent between 2008 and 2009. With interest rates on cards running several percent a month in Brazil, would you be surprised to hear more Brazilians aren’t paying their bills? Veja has some data in Portuguese.
The New York Times describes how Rio de Janeiro’s police are trying a “soft touch” in the city’s notorious shantytowns. It’s all part of a plan to pacify the city ahead of the 2016 Olympic games. “Years of hate and mistrust are thawing in some of Rio’s most violent slums,” the paper says.
An environmental group estimates that more than 1,200 new species have been discovered in the Amazon in the last 10 years. Discoveries include a blue-fanged tarantula and the so-called "Ant from Mars," a blind predator ant which lives underground and was only discovered in 2008.
What do Brazilians really care about? Here’s a clue: The Victoria’s Secret shop in Sao Paulo’s international airport is the brand’s most profitable location in the world, earning about $10,000 per square foot. That compares to about $580 per square foot at U.S. locations.
Everyone in Sao Paulo complains about the traffic. But just imagine if you’re an escaped convict trying to flee from police. Here’s the startling video.