Brazil is experiencing at the present critical times in its history that can compromise their future as a nation. In 2015, Brazil will face with 3 huge crises that occur simultaneously: 1) the recession of the debilitated and devastated Brazilian economy; 2) the emptying of two of its main economic centers (São Paulo and Rio de Janeiro) due to water scarcity that reaches catastrophically; and, 3) the blackouts that tend to multiply on the electricity sector. These crises are added to Petrobras problems that is threatened in its survival thanks to the robbery which reached enormous proportions and Brazilian engineering which tends to suffer scrapping process with the involvement of some engineering companies with the crisis affecting Petrobras.

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BRAZIL TOWARDS ECONOMIC, POLITICAL AND SOCIAL DISASTER
Fernando Alcoforado *
Brazil is experiencing at the present critical times in its history that can compromise
their future as a nation. In 2015, Brazil will face with 3 huge crises that occur
simultaneously: 1) the recession of the debilitated and devastated Brazilian economy; 2)
the emptying of two of its main economic centers (São Paulo and Rio de Janeiro) due to
water scarcity that reaches catastrophically; and, 3) the blackouts that tend to multiply
on the electricity sector. These crises are added to Petrobras problems that is threatened
in its survival thanks to the robbery which reached enormous proportions and Brazilian
engineering which tends to suffer scrapping process with the involvement of some
engineering companies with the crisis affecting Petrobras.
The recession debilitated the Brazilian economy is expected to worsen with the
implementation of economic adjustment recently announced by the Minister of Finance
Joaquim Levy because it contributes to further increase the huge tax burden in the
country. The economic adjustment includes the return of Cide (price fuels regulator
tribute was zero since 2012), the increase in the PIS / COFINS on gasoline and IOF
(Tax on Financial Transactions) on loans and financing to individuals, as well as
changes in IPI (tax on industrialized products) to cosmetics industry. This adjustment
aims to increase at R$ 20 billion in the government cash, and the high taxation of fuels
represent an extra collection of R$ 12.2 billion and the increase in the IOF, R$ 7.4
billion. These measures tend, in the short term to reduce access to credit and push up the
price index. Thus, the demand will be negatively impacted.
It was also announced by the Minister Joaquim Levy that the National Treasury will no
longer help the electricity sector that will have to transfer to the consumer the burden of
R$ 23 billion by prolonged use of thermal power plants due to the drought in the
hydroelectric reservoirs. Given this fact, the electricity tariff will have an adjustment
that could reach 40% this year, including inflation. Considering the lag in prices of
recent years, it is expected for 2015 a 20% increase in gasoline, which today is bought
by Petrobras abroad for a higher value than resale in the domestic market. In the case of
bus fares, which have not risen in response to popular demonstrations of 2013, the gap
is 18%. Other items also need to reset large as the health insurance that would have to
rise 8.6%; drugs, 5.5%; and other prices, 6.2%. All these measures will definitely
contribute to worsen recession in Brazil in 2015.
Water scarcity that affects the states of São Paulo and Rio de Janeiro is very serious not
only affect the lives of people living in these two units of the Brazilian federation, but
mainly because of them constitute the main economic centers of Brazil. The lack of
water to meet domestic demand, industrial and agriculture can lead to economic
emptying of the units of the Brazilian federation, especially in São Paulo, with
extremely negative impact on the Brazilian economy already weakened with the
recessionary measures recently adopted by the government Dilma Rousseff.
Considering the water availability and the infrastructure conditions of production and
supply systems, municipalities may have deficits in water supply, including major cities
such as Sao Paulo, Rio de Janeiro, Salvador, Belo Horizonte, Porto Alegre and the
Federal District, requiring investments of R$ 22 billion to prevent water scarcity [See
the article Brasilpodeenfrentarfaltadeágua(Brazil may experience lack of water) available
on the website <http://www.progresso.com.br/caderno-a/brasil-mundo / Brazil-can-
meet-lack-of-water>].

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To complete the catastrophic situation facing Brazil, there is a high probability of
occurring blackouts in successive Brazilian electrical system in 2015 due to their
vulnerability and increase in electricity consumption. In February 2014, the risk of
rationing in Brazil was 18.5%, second report of the PSR, a company developing
softwares for the operation of the electrical system of Scandinavian countries and the
American East Coast Distribution System [View Article by Ricardo Setti under the title
O calcanhar de aquiles de Dilma: o setor elétrico com o risco de apagão (The Dilma
Achilles heel: the electricity sector with the risk of blackout) published on the website
<http://veja.abril.com.br/blog/ricardo-setti/politica-cia/o-calcanhar-de-aquiles-de-dilma-
o-setor-eletrico-com-o-risco-de-apagao/>]. In other words, Brazil is exposed to a much
higher than acceptable risk that is 5%.
One of the reasons given by the Brazilian government to the vicissitudes through which
passes the electricity sector is that Brazil is experiencing one of the worst droughts in
history. Thus, the hydroelectric reservoirs of the Southeast and Midwest, which account
for nearly 70% of the capacity of the country's electricity generation, are with water
storage below 15%. To complicate matters, the electricity consumption is increasing. Is
that neither dry nor increased consumption should surprise the government because the
Brazilian electrical system should be sized to meet this kind of extreme event. In other
words, the Brazilian government demonstrates incompetence in power sector planning.
One fact is clear: the power sector vulnerabilities are structural and the federal
government demonstrates incompetence in your solution. Something needs to be done
in the electricity sector in order to make it safer and less susceptible to "domino effect"
that leads to blackouts. The solution would be to decentralize, diversify the system and
increase the redundancy protection system with a dual protection system. To meet the
future blackouts, the Brazilian government should adopt a policy of economy or
management of electricity use and invest in the construction lines and redundant
transmission systems, which function as a kind of "reserve" to the existing system
interconnected, especially in its most vulnerable areas. Without the adoption of this set
of solutions, we are threatened with new blackouts.
The three gigantic crisis that will lead the country into recession, economic emptying of
São Paulo and Rio de Janeiro due to water scarcity that reaches and blackouts that tend
to multiply on the electricity sector in 2015 call into question not only the national
economy, but also the social situation that should worsen with the rise in unemployment
as a result of the recession. The combination of economic crisis with social crisis may
lead to the increase of political and social tensions difficult to administer to a weak and
incompetent government as Rousseff demonstrating not be able to face them. In this
catastrophic scenario of economic, political and social point of view adds to the
weakening of our main state-owned company, Petrobras, the scrapping of the Brazilian
engineering very committed to the case of robbery and incompetent management of
Petrobras and the possibility of incriminate numerous politicians, including former
President Lula and the current president, Dilma Rousseff in the process “Lava Jato”
Federal Police.
Everything just described coincides with the existence of a weak government like Dilma
Rousseff that, despite winning the last elections, does not have the leadership necessary
to make the changes required for Brazil in the current moment, becoming hostage of the
holders of national and international finance capital as evidenced by the appointment of
the Minister of finance Joaquim Levy and of the National Congress that has been

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demonstrated by the appointment of several incompetent figures to command numerous
ministries. To avoid the catastrophe that threatens the Brazilian economy in 2015, the
Brazilian people need to demand from the government Dilma Rousseff to abandon
recessive economic policy and name a ministerial team able to tackle the nation's
problems without which inevitably lead Brazil to ruin. Even the country's democratic
institutions may be compromised if the resulting social chaos of the crisis lead to a
Hobbesian solution with the establishment of a dictatorship to maintain political and
social order.
*Fernando Alcoforado , member of the Bahia Academy of Education, engineer and doctor of Territorial
Planning and Regional Development from the University of Barcelona, a university professor and
consultant in strategic planning, business planning, regional planning and planning of energy systems, is
the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova
(Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São
Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado.
Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e
Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX
e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of
the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller
Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe
Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e
combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011)
and Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012),
among others.