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Violence puts Rio de Janeiro in spotlight

Some 40 dead in Rio de Janeiro as police seize slums. WikiLeaks documents reveal US views on Brazil. Inflation threatens Brazil despite world’s highest interest rate. Brazilian movie hero deals out deadly justice. Lula hints at 2014 run.

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A wave of robberies in Rio de Janeiro led police to seize control of two notorious favelas, Vila Cruzeiro and Complexo de Alemao, in fighting that left about 40 dead. Alemao was considered an all-but-impenetrable redoubt of the heavily armed Red Command drug gang, which controls numerous city neighborhoods. Police used military personnel carriers and thousands of officers to win control of the neighborhoods. See coverage by The Guardian and by The New York Times.

Is Rio’s drug war getting worse, or just in its final phase? Some media questioned whether Rio is fit to host the Olympics and the World Cup because of the violence. But the government says the fighting is part of a carefully planned strategy to re-establish state control over the slums.  One certainty: the bandits of Rio are heavily outgunned and outplanned. Here and here are videos of armed drug dealers fleeing from Vila Cruzeiro to Alemao during the police action.

The Wikigate scandals reached Brazil, with leaked U.S. diplomatic cables revealing U.S. and Brazilian attitudes more starkly than usual. The cables read a bit like high school diary. Brazil likes the U.S., but doesn’t want to say so. Plus, France is kind of cute. Here’s a roundup:

·       Brazil is helpful in the war on terror but because of its tourist industry and large Arab community hopes that no one finds out. The country is "highly sensitive to public claims suggesting that terrorist or extremist organizations have a presence" American diplomat wrote in cables. One cable described how Brazilian police deal with the problem: They arrest terror suspects but charge them with drug crimes “to avoid calling attention of the media and the higher levels of the government." 

·       Brazil has not protected its airspace against possible airplane attacks and the country rejected accepting prisoners from Guantanamo prison.

·       American diplomats tried to help Boeing win out over a French bid to supply Brazil with $4.4 billion worth of jet fighters. Diplomats griped that schmoozing by French president Nicolas Sarkozy and Brazilian leader Luiz Inacio Lula Da Silva had turned into a “love fest” and that the two agree “on a near totality of issues.” France’s charmer-in-chief is apparently “courting populous nonaligned nations to extend French influence worldwide” say the cables. Brazil is the top priority.

·       Itamaraty, the Brazilian foreign ministry, is consistently anti-U.S. and works against U.S. interests say American diplomats. The problem is French influence. Brazil’s defense minister, Nelson Jobim, by contrast, is “someone we can work with.”

·       Brazil has been “preening” over its popular positions on climate change (something this report noted last month). In diplomatic cables sent in 2009, President Da Silva gets zinged by U.S. embassy scribes for trying to act the part of the  “hero” and “white knight” at last year’s Copenhagen climate conference. The complete cable is here.

·       Former environment minister Carlos Minc has a tendency to say what he would like to be the truth, instead of the actual truth. Even so, U.S. diplomats considered him a friend. Minc wasn’t happy to be cast as an ally of the USA. “I don’t have any connection to the U.S. I have very tough positions against them,” he told Folha.

·       Brazil Nuts? The nuclear submarines Brazil plans to build with French help to protect offshore oil deposits are silly and will become “white elephants.” Also, Brazil is “paranoid” over its vast Amazon region, the U.S. believes.

Many of the cables were written by former Ambassador Cliff Sobel, considered by some to be a dimplomatic lightweight. President Da Silva dismissed the cables as insignificant but voiced support for WikiLeaks founder Julian Assange, currently under investigation for sex offenses.

In a move that upset Israel, Brazil recognized the existence of a Palestinian state with 1967 borders. Argentina followed with its own recognition days later. Brazil continues to seek an expanded role in the Middle East. Da Silva called peace negotiations futile so long at the U.S. is the “guardian” of negotiations. The Guardian published a lengthy analysis of Brazil’s role in the region.

President Da Silva, who leaves office this month, gave his clearest hint yet he might try to run for president again in 2014."I cannot say no, because I am alive, I am honorary chairman of the party, I am a born politician and I built an extraordinary political relationship," Da Silva said in a television interview.


When Da Silva took office in 2003, Brazil had the world’s highest real interest rate. Eight years later, Brazil still holds the title for costliest borrowing. In 2003, inflation was running 11 percent a year and the benchmark Selic rate touched 26.5 percent. Now inflation is around 5.5 percent, and the Selic rate is 10.75 percent. The current real interest rate (of around 5.25 percent) is calculated by subtracting inflation from the benchmark rate.

Of course, ordinary Brazilians pay much, much more — closer to 35 percent a year in interest on credit cards and car loans. The high rates should hold back consumption yet even so inflation is creeping up and Brazil’s government worries that consumers are borrowing and buying too much. Look for the interest rate/inflation balancing act to be a key dilemma facing the administration of incoming president Dilma Rousseff.

Brazilian appetite for U.S. food companies continues. This time, a potential bid by giant Brazilian meat processor JBS SA to take over cake-maker Sara Lee Corp. was featured on page one of the Wall Street Journal. Previously, Brazilian-led firms bought Budweiser and Burger King. The Journal called the talks “the latest example of cash-rich emerging-market companies seeking to snap up American business icons.”

Brazil has overtaken Germany as the world’s fourth largest market for automobiles, trailing only the U.S., China and Japan. With one car for one in seven of Brazil’s 192 million residents, the market is considered to have plenty of room to grow.

How do you turn a bus company into Brazil’s leading budget airline? The answer may be murder. Police detained Constantino de Oliveira, founder of Gol Linhas Aereas Inteligentes SA, for trying to have a former military policeman knock off his son-in-law. It’s not the first murder-for-hire accusation against de Oliveira. A rule allowing more foreign ownership of Brazilian airlines could lead to a surge in deal making. Analysis by Dow Jones is here.


Brazil’s 21-year dictatorship ended in the 1980s thanks to a general amnesty that forgave political crimes. Now an international human rights court says the amnesty was illegal and that former military leaders are responsible for the disappearance of at least 70 farmers and militants. Unlike Argentina and Chile, which tried military officers for crimes, Brazil has tried to forgive and forget.

The ripped-from-the-headlines thriller “Tropa de Elite 2” became the biggest box office success in Brazilian history, with over 10.7 million tickets sold. The slick production is set in today’s Rio, and features actor Wagner Moura as Coronel Nascimento, an overstressed, incorruptible special forces soldier who tortures and executes drug dealers and dirty politicians. “Nascimento is the hero which all Brazilians wished existed,” said director Bruno Barreto, whose film Dona Flor in 1976 was the previous box office record holder. Watch the trailer here.

Brazil reported deforestation rates that were the lowest in its history. A study suggests that half the guns in Brazil are owned illegally and that many are sold by firemen and police officers who can legally acquire them at factory prices.