With performance less than is necessary to meet Brazil's infrastructure demands and with funding scarce, investment needs to become more efficient.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2013 - Avoiding the middle-income trapFGV Brazil
A few years ago, when China looked at Brazil with great interest, it was not only to estimate its potential as a supplier of food and basic supplies for expanding its infrastructure.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
February 2013 - No clear view of the futureFGV Brazil
After negotiating a path full of obstacles in 2012, mainly put up by the economic problems of the major world economies, Brazilian exporters have started the year hoping to recover the ground they lost last year, when foreign sales fell by 5.3% and the trade surplus plunged 34.7%. Exporters are not sure, however, that this time road conditions will be much better.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
April 2013 - Brazil: Is government economic activism misdirected?FGV Brazil
In response to lost investment and growth, government policies to stimulate the economy have fallen short of success—perhaps because the policies themselves are part of the problem.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2013 - Can Brazil get its cities moving?FGV Brazil
Traffic jams are strangling Brazil’s large cities and causing billions of dollars in losses, requiring substantive changes in urban planning. A study by Marcos Cintra, vice president, Getulio Vargas Foundation (FGV), found that the opportunity cost of time lost by people in traffic jams and the financial cost of additional spending on fuel, goods transport, and pollution controls reached US$20 billion in São Paulo city in 2012.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2013 - Where is the labor market heading?FGV Brazil
The labor market is correcting the excessive growth that was inconsistent with the pace of economic expansion. The question is whether policies to curb inflation and wage increases may adversely affect the gradual accommodation of the labor market and bring about deterioration in incomes, employment, and confidence.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2014 - Currency devaluation, limited effectFGV Brazil
A worsening external environment and the perception that the economy is deteriorating should keep the Brazilian real undervalued, but the recovery of industry will take much more than a devaluated currency.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2012 - Electric energy sector needs rewiringFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2013 - Next year’s elections already face headwindsFGV Brazil
AS BRAZIL PREPARES for election year 2014, economic uncertainty is pervasive. It is likely that 2014 will not be as spectacular as 2010, but forecasts of what will actually happen vary considerably. On the negative end, Brazil would encounter a perfect storm that might combine one or more downgrades of its sovereign rating with a steep devaluation of the exchange rate in the wake of rising U.S. interest rates.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2013 - Avoiding the middle-income trapFGV Brazil
A few years ago, when China looked at Brazil with great interest, it was not only to estimate its potential as a supplier of food and basic supplies for expanding its infrastructure.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
February 2013 - No clear view of the futureFGV Brazil
After negotiating a path full of obstacles in 2012, mainly put up by the economic problems of the major world economies, Brazilian exporters have started the year hoping to recover the ground they lost last year, when foreign sales fell by 5.3% and the trade surplus plunged 34.7%. Exporters are not sure, however, that this time road conditions will be much better.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
April 2013 - Brazil: Is government economic activism misdirected?FGV Brazil
In response to lost investment and growth, government policies to stimulate the economy have fallen short of success—perhaps because the policies themselves are part of the problem.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2013 - Can Brazil get its cities moving?FGV Brazil
Traffic jams are strangling Brazil’s large cities and causing billions of dollars in losses, requiring substantive changes in urban planning. A study by Marcos Cintra, vice president, Getulio Vargas Foundation (FGV), found that the opportunity cost of time lost by people in traffic jams and the financial cost of additional spending on fuel, goods transport, and pollution controls reached US$20 billion in São Paulo city in 2012.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2013 - Where is the labor market heading?FGV Brazil
The labor market is correcting the excessive growth that was inconsistent with the pace of economic expansion. The question is whether policies to curb inflation and wage increases may adversely affect the gradual accommodation of the labor market and bring about deterioration in incomes, employment, and confidence.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2014 - Currency devaluation, limited effectFGV Brazil
A worsening external environment and the perception that the economy is deteriorating should keep the Brazilian real undervalued, but the recovery of industry will take much more than a devaluated currency.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2012 - Electric energy sector needs rewiringFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2013 - Next year’s elections already face headwindsFGV Brazil
AS BRAZIL PREPARES for election year 2014, economic uncertainty is pervasive. It is likely that 2014 will not be as spectacular as 2010, but forecasts of what will actually happen vary considerably. On the negative end, Brazil would encounter a perfect storm that might combine one or more downgrades of its sovereign rating with a steep devaluation of the exchange rate in the wake of rising U.S. interest rates.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2011 - Recycling: Who pays for it?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2011 – Can Brazil become a creative economy?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
February 2014 - 20 years after the Real Plan, why does growth remain elusive?FGV Brazil
Brazil celebrates two decades of monetary stabilization and introduction of the real , but has yet to find the formula for sustained growth.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2014 - Is time running out for the minimum wage policy?FGV Brazil
Economists analyze proposals for revising minimum wage policy in 2015 and ask, Should it be based on productivity?
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Investors, analysts, and economists who are concerned about the direction of fiscal policy, are becoming ever more skeptical about the direction of Brazil’s economy. Though all is not yet lost, if the country is to grow sustainably, the government must make a difficult choice between social programs and the tax burden.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2013 - Can the government foster innovation?FGV Brazil
An unprecedented multibillion-real plan is the latest federal government initiative to stimulate investment in research, development, and innovation (RD & I), diversify the production of goods and services, and improve productivity.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2012 - What to expect next yearFGV Brazil
IN DECEMBER 2011, most of the analysts interviewed by The Brazilian Economy did not hesitate to say that 2012 would be similar to 2011— that is, somewhat predictable and uneventful. And, in fact, there was no major turbulence in the domestic economy in 2012. But the year now ending did produce at least two surprises. The first is that estimates of gross domestic product (GDP) growth have been heading steadily downward and it is expected to hit only 1%—just a third of what even the most conservative projections expected early in the year.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2014 - Can Brazil find a route to competitiveness?FGV Brazil
If it is to join up with global production chains, Brazil must confront old problems that inhibit the competitiveness of industry.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
If Brazil is to achieve greater social and economic progress, public security and law enforcement have to improve significantly.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
July 2014 - How to improve education qualityFGV Brazil
Education in Brazil has advanced in terms of school access, but its quality is still questionable. That calls not just for more and better investments in education but perhaps also for reformulation of the entire educational system.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2014 - Fighting through water and sanitation problemsFGV Brazil
Public managers and the private sector join forces to overcome Brazil’s longstanding difficulties in providing clean water and sanitation services.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
O câncer do cólon e reto, aqui denominado de câncer do intestino, encontra-se entre os dez primeiros tipos de câncer mais frequentes, sendo a quinta causa de morte por câncer no Brasil. Acometem semelhantemente indivíduos dos sexos masculino e feminino, principalmente após os 50 anos de idade.
October 2011 - Recycling: Who pays for it?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2011 – Can Brazil become a creative economy?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
February 2014 - 20 years after the Real Plan, why does growth remain elusive?FGV Brazil
Brazil celebrates two decades of monetary stabilization and introduction of the real , but has yet to find the formula for sustained growth.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2014 - Is time running out for the minimum wage policy?FGV Brazil
Economists analyze proposals for revising minimum wage policy in 2015 and ask, Should it be based on productivity?
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Investors, analysts, and economists who are concerned about the direction of fiscal policy, are becoming ever more skeptical about the direction of Brazil’s economy. Though all is not yet lost, if the country is to grow sustainably, the government must make a difficult choice between social programs and the tax burden.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
May 2013 - Can the government foster innovation?FGV Brazil
An unprecedented multibillion-real plan is the latest federal government initiative to stimulate investment in research, development, and innovation (RD & I), diversify the production of goods and services, and improve productivity.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2012 - What to expect next yearFGV Brazil
IN DECEMBER 2011, most of the analysts interviewed by The Brazilian Economy did not hesitate to say that 2012 would be similar to 2011— that is, somewhat predictable and uneventful. And, in fact, there was no major turbulence in the domestic economy in 2012. But the year now ending did produce at least two surprises. The first is that estimates of gross domestic product (GDP) growth have been heading steadily downward and it is expected to hit only 1%—just a third of what even the most conservative projections expected early in the year.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2014 - Can Brazil find a route to competitiveness?FGV Brazil
If it is to join up with global production chains, Brazil must confront old problems that inhibit the competitiveness of industry.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
If Brazil is to achieve greater social and economic progress, public security and law enforcement have to improve significantly.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
July 2014 - How to improve education qualityFGV Brazil
Education in Brazil has advanced in terms of school access, but its quality is still questionable. That calls not just for more and better investments in education but perhaps also for reformulation of the entire educational system.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2014 - Fighting through water and sanitation problemsFGV Brazil
Public managers and the private sector join forces to overcome Brazil’s longstanding difficulties in providing clean water and sanitation services.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
O câncer do cólon e reto, aqui denominado de câncer do intestino, encontra-se entre os dez primeiros tipos de câncer mais frequentes, sendo a quinta causa de morte por câncer no Brasil. Acometem semelhantemente indivíduos dos sexos masculino e feminino, principalmente após os 50 anos de idade.
Deuteronomy 7:1-4 Mixed marriages in the bible is referring to intermarriage with people of other faith. There is only one race, the human race. Shem, Semitic, Asia, Mongoloid. Ham, Hamitic, Africa, Negroid. Japeth, Japethic, Europe, Caucasoid. Intermarriage in the Old Testament, Intermarriage in the New Testament.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2014 - The future of Latin America? Still up in the airFGV Brazil
In the last decade Latin America experienced an unparalleled economic expansion. The relocation of labor to more productive activities and the boom in commodity prices gave extra breadth to its economies. To a greater or lesser extent, Latin American countries have carried out structural reforms, reduced poverty, and seen a steep rise in domestic consumption.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2014 - Is inclusive growth being derailed?FGV Brazil
Next year could be a real turning point for Brazil, depending on how re-elected President Dilma Rousseff and her administration address two major challenges.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
June 2013 - The World Cup, the Olympics—and BeyondFGV Brazil
On June 12, 2014, when brazil officially welcomes the teams competing in the World Cup, the country will be through the first half of a tough game to coordinate public and private investments to ensure the success of the mega event in all its dimensions.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2011 - Brazil: World’s breadbasketFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
February 2015 - Can natural gas make power supply reliable?FGV Brazil
Power interruptions make it clear that something is needed to plug the holes in Brazil’s energy matrix. One possible long-term solution for the recurring drains on energy may be natural gas.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2012 - Can we build a new health system?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
March 2015 - Lower commodities prices depress recoveryFGV Brazil
The depressing international outlook, in which the only bright spot is the recovery of the US economy, and Brazil’s misguided policies for making its industry more competitive are likely to prevent a vigorous recovery of the country's exports in 2015, after a fall of 7% in 2014.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
October 2012 - Will the public-private partnership work?FGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
August 2013 - Brazil’s rising trade imbalanceFGV Brazil
The Brazilian trade balance deficit in the first seven months of 2013 was US$5 billion, the highest recorded since 1993. It has deeply disappointed the expectations of analysts, who hoped for a recovery last July.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
September 2016 - Recovery still uncertainFGV Brazil
Improvement in some indicators suggests that the recession may be bottoming out, but there are still many uncertainties about the likely speed of an economic recovery.
This is the last edition of The Brazilian Economy, one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
January 2015 - Rebalancing Brazil's economy will not be easyFGV Brazil
Dramatic events in the second half of 2014 transformed the scenario at the turn of the year in Brazil into a big question mark.
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
November 2015 - The need to modernize Brazilian industryFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
December 2011 - The Brazilian economy in an adverse international environmentFGV Brazil
The Brazilian Economy is one of the oldest publications for expert economic analysis of both the Brazilian and international economies. Through this publication, FGV’s Brazilian Institute of Economics and Finance (FGV/IBRE) compares different periods of the economy, assessing both macroeconomic considerations and scenarios related to finance, administration, marketing, management, insurance, statistics, and price indices.
For more information, and Brazilian economic index results, visit: http://bit.ly/1EA1Loz
Similar to September 2014 - Time for a route correction (16)
What are the chances of your country winning the 2018 World Cup?
FGV's mathematical model predicts that Brazil has the greatest chances of winning.
http://fgv.br/emap/copa-2018
Interval observer for uncertain time-varying SIR-SI model of vector-borne dis...FGV Brazil
The issue of state estimation is considered for an SIR-SI model describing a vector-borne disease such as dengue fever, with seasonal variations and uncertainties in the transmission rates. Assuming continuous measurement of the number of new infectives in the host population per unit time, a class of interval observers with estimate-dependent gain is constructed, and asymptotic error bounds are provided. The synthesis method is based on the search for a common linear Lyapunov function for monotone systems representing the evolution of the estimation errors.
Date: 2017
Authors:
Soledad Aronna, Maria
Bliman, Pierre-Alexandre
Ensuring successful introduction of Wolbachia in natural populations of Aedes...FGV Brazil
The control of the spread of dengue fever by introduction of the intracellular parasitic bacterium Wolbachia in populations of the vector Aedes aegypti, is presently one of the most promising tools for eliminating dengue, in the absence of an efficient vaccine. The success of this operation requires locally careful planning to determine the adequate number of individuals carrying the wolbachia parasite that need to be introduced into the natural population. The introduced mosquitoes are expected to eventually replace the Wolbachia-free population and guarantee permanent protection against the transmission of dengue to human. In this study, we propose and analyze a model describing the fundamental aspects of the competition between mosquitoes carrying Wolbachia and mosquitoes free of the parasite. We then use feedback control techniques to devise an introduction protocol which is proved to guarantee that the population converges to a stable equilibrium where the totality of mosquitoes carry Wolbachia.
Date: 2015-03-19
Authors:
Bliman, Pierre-Alexandre
Soledad Aronna, Maria
Coelho, Flávio Codeço
Silva, Moacyr da
The resource curse reloaded: revisiting the Dutch disease with economic compl...FGV Brazil
This paper shows that the Dutch disease can be more formally characterised as low economic complexity using ECI-type indicators; there is a solid and robust inverse relationship between exports concentrating on natural resources and economic complexity as measured by complexity indicators for a database of 122 countries from 1963 to 2013. In a large majority of cases, oil answers for shares in excess of 50% of exports. In addition to empirical panel analysis, we address case studies concerned with Indonesia and Nigeria and introduce a brief review of the theoretical literature on the topic. Indonesia is considered in the literature as a good example in avoiding the negative effects of the Dutch disease, whereas Nigeria is taken as a bad example in terms of institutions and policies adopted during the seventies and eighties. The empirical results show that complexity analysis and Big Data may offer significant contributions to the still-current debate surrounding the Dutch disease.
Date: 2017-03
Authors:
Camargo, Jhean Steffan Martines de
Gala, Paulo
The Economic Commission for Latin America (ECLA) was right: scale-free comple...FGV Brazil
The main purpose of this paper is to apply big-data and scale-free complex network techniques to the study of world trade, with a specific focus on the investigation of ECLA and structuralist ideas. A secondary objective is to illustrate the potentialities of the use of the new science of complex networks in economics, in what has been recently referred to as an econophysics research agenda. We work with a trade network of 101 countries and 762 products (SITC-4) which generated 1,756,224 trade links in 2013. The empirical results based on network analysis and computational methods reported here point in the direction of what ECLA economists used to argue; countries with higher income per capita concentrate in producing and exporting manufactured and complex goods at the center of the trade network; countries with lower income per capita specialize in producing and exporting non-complex commodities at the network’s periphery.
Date: 2017-03
Authors:
Gala, Paulo
Camargo, Jhean Steffan Martines de
Freitas, Elton
Cost of equity estimation for the Brazilian market: a test of the Goldman Sac...FGV Brazil
As an approach to determining the degree of integration of the Brazilian economy, this paper seeks to test the explanatory power of the Goldman Sachs Model for the expected returns by a foreign investor in the Brazilian market during the past eleven years (2004-2014). Using data for the stocks of 57 of the most actively traded firms at the BM&FBovespa, it begins by testing directly the degree of integration of the Brazilian economy during this period, in an attempt to better understand the context in which the model has been used. In sequence, in an indirect test of the Goldman Sachs model, the risk factor betas (market risk and country risk) of the sample stocks were estimated and a panel regression of expected stock returns on these betas was performed. It was found that country risk is not a statistically significant explanation of expected returns, indicating that it is being added in an ad hoc fashion by market practitioners to their cost of equity calculations. Thus, although there is evidence of a positive and significant relationship between systematic risk and return, the results for country risk demonstrate that the Goldman Sachs Model was not a satisfactory explanation of expected returns in the Brazilian market in the past eleven years, leading us to question the validity of its application in practice. By adding a size premium factor to the model, there is evidence of a negative and significant relationship between companies’ size and return, although country risk remains not satisfactory to explain stock expected returns.
Date: 2017-03
Authors:
Guanais, Luiz Felipe Poli
Sanvicente, Antonio Zoratto
Sheng, Hsia Hua
A dynamic Nelson-Siegel model with forward-looking indicators for the yield c...FGV Brazil
This paper proposes a Factor-Augmented Dynamic Nelson-Siegel (FADNS) model to predict the yield curve in the US that relies on a large data set of weekly financial and macroeconomic variables. The FADNS model significantly improves interest rate forecasts relative to the extant models in the literature. For longer horizons, it beats autoregressive alternatives, with a reduction in mean absolute error of up to 40%. For shorter horizons, it offers a good challenge to autoregressive forecasting models, outperforming them for the 7- and 10-year yields. The out-of-sample analysis shows that the good performance comes mostly from the forward-looking nature of the variables we employ. Including them reduces the mean absolute error in 5 basis points on average with respect to models that reflect only past macroeconomic events.
Date: 2017-03
Authors:
Vieira, Fausto José Araújo
Chague, Fernando Daniel
Fernandes, Marcelo
Improving on daily measures of price discoveryFGV Brazil
We formulate a continuous-time price discovery model in which the price discovery measure varies (stochastically) at daily frequency. We estimate daily measures of price discovery using a kernel-based OLS estimator instead of running separate daily VECM regressions as standard in the literature. We show that our estimator is not only consistent, but also outperforms the standard daily VECM in finite samples. We illustrate our theoretical findings by studying the price discovery process of 10 actively traded stocks in the U.S. from 2007 to 2013.
Date: 2017-03
Authors:
Dias, Gustavo Fruet
Fernandes, Marcelo
Scherrer, Cristina Mabel
Disentangling the effect of private and public cash flows on firm valueFGV Brazil
This paper presents a simple model for dual-class stock shares, in which common shareholders receive both public and private cash flows (i.e. dividends and any private benefit of holding voting rights) and preferred shareholders only receive public cash flows (i.e. dividends). The dual-class premium is driven not only by the firm's ability to generate cash flows, but also by voting rights. We isolate these two effects in order to identify the role of voting rights on equity-holders' wealth. In particular, we employ a cointegrated VAR model to retrieve the impact of the voting rights value on cash flow rights. We finnd a negative relation between the value of the voting right and the preferred shareholders' wealth for Brazilian cross- listed firms. In addition, we examine the connection between the voting right value and market and firm specific risks.
Date: 2017-03
Authors:
Autor
Scherrer, Cristina Mabel
Fernandes, Marcelo
Mandatory IFRS adoption in Brazil and firm valueFGV Brazil
Using diff-in-diff approaches and the propensity-score matching, this study focuses on firm-level Tobin´s q and Market-to-book outcomes for Brazilian firms who in 2008 were required by Law 11.638/07 to adopt the full International Financial Reporting Standards (IFRS) by 2010. Brazil’s tier-system of corporate governance standards for publicly-traded firms, its uniquely wholesale adoption of the IFRS, and the previously considerable gap between its national GAAP and IFRS readily lend the scenario to research, which thus far finds small or inconsistent results when focused on IFRS adoption-related outcomes in Europe and China. However, while these features recommend the transitioned Brazilian equity market to analysis, additional unique features, such as its small population size and its limited historical data -- of varied quality – increase the challenge in selecting a suitable empirical methodology. Using quarterly data from 2006-2011, control firms in the Nivel II and Novo Mercado tiers of Bovespa which already complied with higher quality accounting standards are matched to treatment firms in the Regular and Nivel I tiers with similar averaged values of size and sector. Our results suggest that there is a positive impact on Tobin´s q and Market-to-book for firms who are forced to adopt IFRS in Brazil. We can observe the same results when we consider all variables winsorized at 5% level. We also find a positive relation between the firm value (measured by Tobin´s q and Market-to-book) and net income. Firms with higher net income are more likely to have higher Tobin´s q and Market-tobook. In an opposite way, we find a negative relation among firm value, size, Ebit-to-sales, sales growth and PPE-to-sales. All results are statistically significant at 1% level. '
Date: 2017-03
Authors:
Sampaio, Joelson Oliveira
Gallucci Netto, Humberto
Silva, Vinícius Augusto Brunassi
Dotcom bubble and underpricing: conjectures and evidenceFGV Brazil
We provide conjectures for what caused the price spiral and the high underpricing of the dotcom bubble of 1999–2000. We raise two conjectures for the price spiral. First, given the uncertainty about the growth opportunities generated by the new technologies and their spillover effects across technology industries, investors saw the inflow of a large number of high-growth firms as a sign of high growth rates for the market as a whole. Second, investors interpreted the wave of highly underpriced IPOs as an opportunity to obtain gains by investing in newly public companies. The underpricing resulted from the emergence a large cohort of firms racing for market leadership. Fundamentals pricing at the IPO was part of their strategy. We provide evidence for our conjectures. We show that returns on NASDAQ composite index are explained by the flow of high-growth (or highly underpriced) IPOs; the high underpricing can be fully explained by firms’ characteristics and strategic goals. We also show that, contrary to alternatives explanations, underpricing was not associated with top underwriting, there was no deterioration of issuers’ quality, and top underwriters and analysts became more selective.
Date: 2017-03
Authors:
Autor
Carvalho, Antonio Gledson de
Pinheiro, Roberto Benjamin
Sampaio, Joelson Oliveira
Contingent judicial deference: theory and application to usury lawsFGV Brazil
Legislation that seems unreasonable to courts is less likely to be followed. Building on this premise, we propose a model and obtain two main results. First, the enactment of legislation prohibiting something raises the probability that courts will allow related things not expressly forbidden. In particular, the imposition of an interest rate ceiling can make it more likely that courts will validate contracts with interest rates below the legislated cap. Second, legal uncertainty is greater with legislation that commands little deference from courts than with legislation that commands none. We discuss examples of effects of legislated prohibitions (and, in particular, usury laws) that are consistent with the model.
Date: 2017-03
Authors:
Guimarães, Bernardo
Salama, Bruno Meyerhof
Education quality and returns to schooling: evidence from migrants in BrazilFGV Brazil
We provide a new education quality index for states within a developing country using 2010 Brazilian data. This measure is constructed based on the notion that the financial returns obtained from an additional year of schooling can be
seen as being derived from the value that market forces assign to this education. We use migrant data to estimate returns to schooling of individuals who studied in different states but who work in the same labor market. We find very heterogeneous educational qualities across states: the poorest Brazilian region presents education quality levels that are approximately equal to one-third of the average of all other regions, a gap three times larger than the one suggested by standardized test scores. We compare our index with standardized test scores, educational outcome variables, and public expenditure per schooling stage at the state level, producing new evidence related to education in a large developing country. We conduct an education quality-adjusted development accounting exercise for Brazilian states and find that human capital accounts for 26%-31% of output per worker differences. Adjusting for quality increases human capital’s explanatory power by 60%.
Date: 2017-02
Authors:
Brotherhood, Luiz Mário
Ferreira, Pedro Cavalcanti
Santos, Cézar Augusto Ramos
On October 31st and November 1st, 2016, the Center for Regulation and Infrastructure from Fundação Getulio Vargas (FGV CERI) organized a two-day workshop discussion in collaboration with the World Bank and ABRACE. The event gathered regulators, government representatives, academics, operators, financial institutions and investors. The debate focused on the main challenges faced by the current restructuring process of the Brazilian gas industry. This document presents the main points discussed during the debates.
Date: 2017-01
Authors:
Vazquez, Miguel
Amorim, Lívia
Dutra, Joísa Campanher
The impact of government equity investment on internationalization: the case ...FGV Brazil
We examine the impact of government equity ownership on the degree of internationalization of emerging market firms. Our analysis of 173 Brazilian publicly traded firms from 2002 to 2011 shows that the higher the equity held by the state through the state investment bank and the pension funds of SOEs and privatized SOEs, the higher the firm’s degree of internationalization. Firms in which the government shared control with families, and with both families and foreigners, had a higher degree of internationalization. Our findings underline the importance of the institutional context in explaining the internationalization of Brazilian firms.
Date: 2016
Author:
Sheng, Hsia Hua
Techno-government networks: Actor-Network Theory in electronic government res...FGV Brazil
The Actor-Network Theory (ANT) is a theoretical approach for the study of controversies associated with scientific discoveries and technological innovations through the networks of actors involved in such actions. This approach has generated studies in Information Systems (IS) since 1990, however few studies have examined the use of this approach in the e-government area. Thus, this paper aims to broaden the theoretical approaches on e-government, by presenting ANT as a theoretical framework for e-government studies via published empirical work. For this reason, the historical background of ANT is described, duly listing its theoretical and methodological premises. In addition to this, one presented ANT-based e-government works, in order to illustrate how ANT can be applied in empirical studies in this knowledge area.
Date: 2016
Authors:
Fornazin, Marcelo
Joia, Luiz Antonio
Condemning corruption while condoning inefficiency: an experimental investiga...FGV Brazil
This article reports results from an economic experiment that investigates to what extent voters punish corruption and waste in elections. While both are responsible for a loss of welfare for voters, they are not necessarily perceived as equally immoral. The empirical literature in political agency has not yet dealt with these two dimensions that determine voters’ choices. Our results suggest that morality and norms are indeed crucial for a superior voting equilibrium in systems with heterogeneous politicians: while corruption is always punished, self-interest alone – in the absence of norms – leads to the acceptance and perpetuation of waste and social losses.
Date: 2016
Authors:
Arvate, Paulo Roberto
Souza, Sergio Mittlaender Leme de
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
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Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
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how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
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what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
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1. A publication of the Getulio Vargas Foundation • September 2014 • vol. 6 • nº 9
THE BRAZILIAN
ECONOMY
Agriculture
Can Brazil’s agribusiness become
even more productive?
The 2014 Election
Brazil’s third way
Interview
Joaquim Falcão
Dean of the Law School
of FGV Rio
With
performance
less than is
necessary to
meet Brazil’s
infrastructure
demands and
with funding
scarce,
investment
needs to
become more
efficient
TIME FOR
A ROUTE
CORRECTION
2. Economy, politics, and policy issues
A publication of the Brazilian Institute of
Economics. The views expressed in the articles
are those of the authors and do not necessarily
represent those of the IBRE. Reproduction of the
content is permitted with editors’ authorization.
Letters, manuscripts and subscriptions: Send to
thebrazilianeconomy.editors@gmail.com.
Chief Editor
Vagner Laerte Ardeo
Managing Editor
Claudio Roberto Gomes Conceição
Senior Editor
Anne Grant
Production Editor
Louise Pinheiro
Editors
Bertholdo de Castro
Solange Monteiro
Art Editors
Ana Elisa Galvão
Marcelo Utrine
Sonia Goulart
Contributing Editors
João Augusto de Castro Neves – Politics and Foreign Policy
Thais Thimoteo – Economy
Chico Santos – Agriculture
IBRE Economic Outlook (quarterly)
Coordinators:
Regis Bonelli
Silvia Matos
Team:
Aloísio Campelo
André Braz
Armando Castelar Pinheiro
Carlos Pereira
Gabriel Barros
Lia Valls Pereira
Rodrigo Leandro de Moura
Salomão Quadros
Regional Economic Climate
Lia Valls Pereira
The Getulio Vargas Foundation is a private, nonpartisan, nonpro-
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President: Carlos Ivan Simonsen Leal
Vice-Presidents: Francisco Oswaldo Neves Dornelles, Marcos
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The institute was established in 1951 and works as the “Think
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F O U N D A T I O N
3. 3September 2014 Ÿ The Brazilian Economy 3
News Briefs
4 Brazil now in technical recession …
Industrial production snaps slump … com-
petitiveness drops as inflation accelerates
… Campos’ death shakes up election …
Neves and Rousseff go on the attack …
Polls have Silva winning … Rousseff hints
at changes … Record central government
deficit
The 2014 Election
8 Brazil’s third way
As she transitions from a protest vote
candidate to possible leader, Silva brings
to the center of the campaign the dif-
fuse sentiment for change that has swept
Brazilian cities since last year’s protests.
João Augusto de Castro Neves explains
why some attributes she needed to gain
trust may clash with those that make her
an archetype of the “new politics” she
advocates.
Book Review
10 Is Brazil really “An Unreformed
Leviathan”?
InInhisnewbook,Brazil:TheTroubledRiseof
aGlobalPower, long-time Economist writer
Michael Reid picks out economic, social,
and cultural threads from the past that still
color the governance of Brazil today. Anne
Grant looks at how Reid sees the country’s
roots, its achievements, its promise, and its
contradictions.
Cover Story
13 Time for a route correction
With the second PAC program about to
end, the preliminary results show that the
anticipated acceleration of infrastructure
projects has not occurred. The current
uncertainty clearly has had a depressing
effect on the construction industry, but
Solange Monteiro digs deeper to see what
elsemaybeslowingtheprogram,andwhat
experts think can be done about it.
Agriculture
22 Can agribusiness become even
more productive?
Successful though the sector is, at least
60 important issues need to be addressed
in the short, medium and long term, and
have brought these to the attention of the
presidential candidates. Chico Santos looks
at what kinds of help agribusiness needs
from the government.
Economy
28 The pessimism continues
Businesspeople and consumers see no see
noreasontofeeloptimisticaboutthedirec-
tion of the Brazilian economy, Thais Thi-
moteo tells us. A lame-duck government,
uncertainty about the path of inflation, and
a labor market that seems to be slackening
areamongthereasons.Fullindustrialinven-
tories that are still full and lack of demand
are also depressing confidence.
Trade
30 Services without borders
As a share of the world services market,
Brazil’s services exports are small: earning
a larger share will depend crucially on
increased productivity and competitive-
ness, which implies heavier investment in
educating and training workers. Solange
Monteiro reports on the 33rd National
Foreign Trade Meeting in Rio de Janeiro.
32 Wanted: More markets and
better Brazilian products
In 2013 Brazil’s trade balance was down
US$2.4 billion, after double-digit surpluses
going back to 2002.Worrying in itself, the
drop also raises concerns about the cur-
rent account balance. Lia Valls Pereira Baker
analyzes the drivers of the drop, notably oil,
and how Brazil is falling behind in identify-
ing new markets.
Interview
34 The political strength of ethics
Joaquim Falcão, Dean of the Law School
of FGV Rio, talks with Solange Monteiro,
Claudio Conceição and Bertholdo Castro
about the findings of a major new Law
School study of the Brazilian Supreme
Court, explaining the implications of the
SupremeCourtrulingsinthecongressional
vote buying trial and discusses how the
court is now perceived.
Regional Economic Climate
39 World economic climate
improves; Latin America’s worsens
The Ifo / FGV Economic Climate in Latin
America indicator (ICE) has been headed
downward since April 2013, but Mexico
is doing better and Brazil and Argentina
are doing worse. According to Lia Valls
Pereira Baker, Brazil’s backtracking reflects
both a lack of confidence in government
policies and a loss of international com-
petitiveness.
THE BRAZILIAN
ECONOMYIN THIS ISSUE
Brazilian Institute of Economics | September 2014
4. 4 September 2014 Ÿ The Brazilian Economy
BRAZIL NEWS BRIEFS
ECONOMY
Current account deficit up again
Brazil posted a current account
deficit of US$6.0 billion in July, the
central bank said Friday, almost
double the June deficit of US$3.3
billion. The cumulative 12-month
deficit through July totaled US$78.39
billion, 3.45% of Brazil’s GDP.
However, foreign direct investment
went up from US$3.9 billion in June
to US$5.9 billion, for a 12-month total
of US$64 billion. (August 22)
Brazil now in technical recession
Second-quarter economic output,
GDP, fell by 0.6%, worse than
analysts expected, and revised
figures for the first quarter now
show a fall of 0.2%. A recession is
usually defined as two consecutive
quarters of contraction. (August 29)
Industrial output snaps five-
month slump
Brazilianindustrialoutputroseslightly
in July after five months of declines.
Output at factories and mines rose
a seasonally adjusted 0.7 percent,
government statistics agency IBGE
said. Production had fallen 1.4% in
June from May, partly due to the
World Cup. Capitalgoods production
jumped16.7%inJuly,andintermediate
goods such as textiles and chemicals
retreated 0.3%. Durable consumer
goods, such as furniture and home
appliances, rose 20.3%. However, July
production was down 3.6% from July
2013. (October 2)
Inflation accelerated in August
The monthly inflation rate picked
up speed in August, breaching the
upper limit of the central bank target
range of 2.5–6.5%. Consumer prices
rose 0.25% in August after going up
only 0.01% in July; 12-month inflation
edgedupto6.51%from6.50%inJuly.
The main culprit for August inflation
was higher electricity rates in many
cities. (September 5)
THE 2014 ELECTION
Candidate’s death shakes
presidential campaign
Former governor of Pernambuco
and presidential candidate Eduardo
Campos died in a plane crash on
August 14 at the coastal city of Santos.
The death, which occurred barely
50 days before the elections, may
change the outcome of elections and
the future of the economy. Brazilians
mourned the death of Mr. Campos—
grandson of a famous leftist politician,
Miguel Arraes—who promised a
new way to do politics and a more
inclusive society.
The centre-left PSB party asked
Marina Silva, Mr. Campos’s running
ECONOMIC POLICY
Central government has record
July deficit
Despite government promises
to improve the fiscal balance,
the National Treasury reports the
central government ended July
with a record deficit of R$2.2
billion—the worst performance for
the month in 17 years. The surplus
for January through July of R$15.2
billion, 0.52% of GDP, was down
60% from the same period last year.
(August 29)
Policy rate unchanged at 11%
As expected, the central bank
Monetary Policy Committee voted
unanimously to keep the policy
interest rate at 11%. The October
presidential elections may have
been a factor in retaining the
interest rate; the central bank
governor usually changes when
a new government takes office.
(September 3)
mate, to take over as candidate.
Analysts believe she may have a
better chance of unseating President
Dilma Rousseff. However, as a
principled environmentalist and a
staunch evangelical, Ms. Silva may
struggle to win over the country’s
powerful farming lobby. Although
she is committed to macroeconomic
stability, she has as yet said little about
her likely economic policies.
Unlike Mr. Campos, former
governor of the north-eastern state of
Pernambuco who was just becoming
known nationally, Ms. Silva already
has wide support after coming third
in Brazil’s 2010 elections with almost
20% of the vote. She will probably
take votes away from Ms. Rousseff, but
also have enough backing to knock
pro-business centrist Aécio Neves
out of the election in the first round.
(August 14)
Neves says his team has “more
experience”
Launching his program for the
Northeast region in Salvador city,
presidential candidate Aécio Neves
(PSDB) touted the experience of
his advisors and sought to position
himself as a safe option to the PT
government. “We have a number of
projects discussed widely with the
5. 5September 2014 Ÿ The Brazilian Economy
BRAZIL NEWS BRIEFS
Photos:RenatoAraujoandJoseCruz/AgenciaBrasil.Photos:AntonioCruz/AgenciaBrasil.
population that are best for Brazil.
Nobody has a more qualified team to
execute them so that Brazil can dream
of a better future,” he said. Asked
about the PSB candidate, Neves said
he has “great respect for Marina Silva,”
but he is convinced that his proposals
“are better.” (August 23)
Rousseff and Neves slam Silva
Seeking reelection, Dilma Rousseff
(PT) went on direct attack, saying that
Marina Silva (Brazilian Socialist Party,
PSB) wants to “reduce to dust” the
country’s industrial policy. Rousseff
also warned that Silva intends to “end
the role of the National Development
Bank (BNDES).” (September 2)
Meanwhile, Aécio Neves denied
rumors that he would drop out of
the race and also took the fight to
Silva. With former president Fernando
Henrique Cardoso beside him, the
Brazilian Social Democratic Party
(PSDB) candidate said he has “full
confidence” that he will make it to
the runoff. The press conference
also marked a change in tone for his
campaign: “Brazil needs to know the
real convictions of Marina Silva,” he
said. Neves accused Silva of having
voted against the fiscal responsibility
law when she was in Congress.
(September 2)
Rousseff recognizes need for
change
In an effort to neutralize calls for
change from campaign opponents,
President Rousseff (PT) said in
Belo Horizonte city that she will
“update policies” and “teams” in a
possible second term. This is the first
time she has promised changes if
re-elected—until now she has left
unanswered questions about possible
management mistakes in her first
term. (September 3)
The late Eduardo Campos and Marina Silva
Presidente Dilma Rousseff and Senator Aécio Neves dispute Marina Silva’s rise in the polls.
Polls show Silva winning
According to two polls published
in early September, Marina Silva
(PSB) would defeat President Dilma
Rousseff (PT) in second-round
voting in October. In the first round
the Ibope poll projects Rousseff
getting 37% of the vote, Silva 33%,
and Aécio Neves (PDSB) 15%. In the
runoff on October 26, Silva would
win 46% to 39%. Polling company
Datafolha projected first-round
shares of 35% for Rousseff, 34% for
Silva, and 14% for Neves, and Silva
winning the runoff 48% to 41%.
(September 3)
Oil scandal blows up as election
nears
A scandal involving the state-
controlled oil giant Petrobras
flared up again over testimony that
implicated dozens of top figures in
President Dilma Rousseff’s governing
coalition in a vast kickback scheme.
In a confidential plea deal with
prosecutors, a former executive
of Petrobras, Paulo Roberto Costa
revealed details about the operation,
which involved the overbilling
of contracts for oil projects and
distribution of benefits among
officials and politicians. (September 8)
7. 7September 2014 Ÿ The Brazilian Economy
FROM THE EDITORS
A LITTLE OVER SEVEN YEARS AGO, Brazilians
welcomed the Growth Acceleration Program (PAC).
After years of neglect it was a beacon of hope that
Brazil’s infrastructure would no longer be neglected.
There was hope of reducing the cost of getting
Brazilian products to foreign markets, of making our
products competitive around the world, of making
life easier for the suffering people in Brazilian cities.
Did any of these things happen?
Not noticeably. It still costs a
Brazilian manufacturer four or five
times as much to get a product to
market as it costs a South Korean
manufacturer. And last year
ordinary Brazilians hit the streets
to protest about the high costs of
simply getting themselves to work.
On average, investments in
infrastructure were just above 2%
of GDP; it will take twice that much
to make up for years of neglect, and more again to
catch up with new demand. Last year, 2.4% of GDP
was invested in infrastructure; this year only 2.5%
is budgeted.
The PAC failed to revive infrastructure because the
government took far too long to call in the private
sector and grant concessions for roads, railways,
and ports. Most PAC money went to social housing
programs, and the government was able to spend
only part of what was intended for transport.
In 2012 the government finally had a change of
heart. Recognizing that the public sector was unable
to carry out large projects efficiently, the president
launched an ambitious program of infrastructure
concessions.
Perhaps not ambitious enough, though. A major
problem related to investments in infrastructure
is the abysmal inefficiency of the public sector in
using budgeted resources. Between 2003 and 2013, it
failed to use about US$35 billion of funds authorized
for transportation.
Even the president has conceded that she will
have to make adjustments in her policies and her
team if she is elected to a second term, so there
may be hope again. But it will
take very significant changes if
Brazil’s people and businesses
are to get the infrastructure they
need and deserve. It will take a
comprehensive restructuring of
how public works are planned
and how they are executed—how
projects are assessed and chosen,
how to ensure that budgeted
resources are used efficiently. Not
only must the responsibilities of
federal agencies to streamline projects be clarified,
regulatory agencies must also be strengthened, and
their performance monitored.
With the presidential elections fast approaching,
we believe all candidates recognize that raising fixed
investment in general and infrastructure investment
in particular is critical to increase productivity and
growth. Whoever is elected will need to carry out
reforms to speed projects, raise productivity, and
improve the business environment.
Brazil still has remarkable strengths, especially a
sophisticatedandresourcefulbusinesscommunityand
pockets of innovation excellence. The next president
should take full advantage of these strengths to pull
the country out of the current doldrums and get
infrastructure investment back on track.
Why is it so hard to get
around in Brazil?
Whoever is elected
will need to carry
out reforms to
speed projects, raise
productivity, and
improve the business
environment.
8. 8 September 2014 Ÿ The Brazilian Economy
THE 2014 ELECTIONS
João Augusto de Castro Neves
THE DRAMATIC EVENTS OF the past few weeks
warrant a slight change to the title of last month’s
column, Brazil’s third way? The tragic passing of
Eduardo Campos and his replacement by Marina
Silva adds more uncertainty to the presidential
race and certainly raises the odds of a third party
success, which would splinter the two-decade-
old hegemony of the Workers’ Party (PT) and the
Brazilian Social Democratic Party (PSDB). Last
month’s title, then, could very well stand without
a question mark.
The Marina Silva candidacy of the Brazilian
Socialist Party (PSB) undoubtedly represents
a significant inflexion point in Brazil’s political
landscape. As she transitions from a protest vote
candidate to someone who could prove to be a
leader, Silva brings to the center of the campaign
the diffuse sentiment for change that has swept
Brazilian cities since last year’s protests. The
transition, however, is far from trivial: some of
the attributes needed to gain trust from broader
segments of society may clash with those that
make her somewhat of an archetype of the “new
politics” she advocates.
Silva’s green credentials, for example, have
generated significant animosity within the
agribusiness sector in the past and also raised
industryconcernsaboutmorerigidenvironmental
licensing for infrastructure projects. Her decision
to invite Beto Albuquerque (PSB) to be the
vice-presidential candidate is a good sign. He
has ties with agribusiness, and her advisers are
clearly seeking to make a statement that her
government would look to the private sector to
boost investments. Nevertheless, she has a long
trackrecordofendorsingstringentenvironmental
licensing to the detriment of such investment
projects as hydropower in the Amazon, which
raises questions about whether she can fully win
over the industrial sector.
Additional dilemmas became clear after
the release of her platform. The platform did
give clear indications that if she is elected,
Brazil’s third way
castroneves@eurasiagroup.net
As she transitions from a
protest vote candidate to
someone who could prove to
be a leader, Silva brings to the
center of the campaign the
diffuse sentiment for change
that has swept Brazilian cities
since last year’s protests.
9. 9September 2014 Ÿ The Brazilian Economy
THE 2014 ELECTIONS
Silva’s economic team will be market-friendly
and look to manage the economy better. The
document signals the return to the three legs
of macroeconomic management implemented
by Fernando Henrique Cardoso and continued
through most of Luiz Inacio Lula da Silva’s two
terms inoffice: fiscaldiscipline,inflationtargeting,
and a free-floating exchange rate.
But ambitious promises to expand social
programsraisequestionsaboutfiscalpolicyunder
a Silva administration. The fiscal cost of these
programs certainly suggests that if elected, she
will have to roll back many of these commitments.
The promises suggest two possibilities: Either her
campaign allowed some of the proposals to be
madepublicwithoutduevettingbyhereconomic
advisors. Or her own commitment to fiscal
austerity doesn’t run that deep. At a minimum,
the fact that Silva is making specific promises in
sectors like health and education, subjects on
which legislators are highly organized, means she
is creating a potential political problem for her
administration after the election.
It is in the political realm, in fact, that Silva’s
greatest liabilities lie. The same features that
make her a very competitive candidate make
her a potentially dangerous president. By
listing “High Intensity Democracy” as its first
pillar to tackle, her platform reinforces the
perception that she is convinced of the need
to “renew” politics and establish governance
on new grounds. In practice, that means she is
opposed to engaging in the traditional means
of constructing congressional majorities in
Brazil’s multi-party presidential democracy by
distributing cabinet posts to parties in Congress
to lock in support.
The platform, moreover, suggests that political
reform will be front and center on her agenda
after the election. She would eliminate the
ability of elected executive office holders to run
for reelection, extend the 4-year presidential
term to 5 years, introduce public funding of
campaigns, and generally implement reforms
that could weaken political parties. The platform
is also heavy on introducing elements of “direct”
democracy, such as more frequent use of
plebiscites and referendum.
Needlesstosay,theoddsthatheradministration
will become mired in a difficult political reform
with low chances of approval loom very large.
Given her unwillingness to negotiate support
with parties in the “traditional” way, at a time
when difficult economic adjustments should
come, getting reforms through without a
disciplined congressional base of support won’t
be easy. Even though Silva is calling for tax reform,
placing a premium on political reform makes the
former unlikely to make headway.
The last two presidents who attempted
to ignore or change the rules of the game
of coalition-building were either impeached
(Fernando Collor in 1992) or faced a major
political crisis (Lula’s first-term vote-buying
scandal).
The same features that make
Silva a very competitive
candidate make her a
potentially dangerous
president.
10. 10 September 2014 Ÿ The Brazilian Economy
BOOK REVIEW
Anne Grant
Michael Reid, whose previous book was the 2007
Forgotten Continent: The Battle for Latin America’s
Soul, lived in Brazil from 1996 to 1999 and still
returns regularly from his base in Lima. As is clear
from the numerous notes in Brazil,* he also does
his homework.
Reid sees the country’s roots, its achievements,
its promise, and its contradictions. In Part I, which
covers Brazil’s early history, for instance, he notes
that in the nineteenth century “The biggest
constraints on Brazil’s economic development
remained the enormous difficulty and cost
of transporting goods around the country.”
And “Nor did the First Republic [1893] heed …
warnings [of a reporter] of the need for popular
education and social inclusion.” Brazil’s World War
II economy, he says, was built on commodities; no
attention was given to competitiveness.
Sound familiar? In fact, themes familiar to
readers of The Brazilian Economy echo through
the book. Throughout, too, Reid does not back off
from giving credit or criticism where either is due.
The result, at least for a non-Brazilian, is a much
clearer sense of what Brazil is really like now—and
why. In Brazil, for instance, street demonstrations
like those so common in France are rare, which is
why seeing so many people in the streets in June
2013 was such a shock to the Brazilian psyche. It
was fascinating to learn that one of the rare few
occurred in 1880, under Emperor Dom Pedro II
—when the fare charged by trams in Rio de
Janeiro prompted three days of rioting! Although,
unlike 2013, the army eventually opened fire on
protesters, the fare rise was cut immediately.
IS BRAZIL REALLY “AN
UNREFORMED LEVIATHAN”?
AnneGrant,anAmericanlawyer,hasbeensenioreditorofTheBrazilian
Economy since its inception.
*Michael Reid, Brazil: The Troubled Rise of a Global Power, New Haven
and London and New York: Yale University Press.
In his new book, Brazil: The Troubled Rise of a
Global Power, long-time The Economist writer
Michael Reid picks out economic, social, and
cultural threads from the past that still color
the governance of Brazil today.
11. 11September 2014 Ÿ The Brazilian Economy
BOOK REVIEW
Reid does a particularly useful job of setting the
context for what Brazil is going through today,
before analyzingthecurrentsituationindetail.He
pointsoutthatinthe1930s,inthefirstascendance
of Getulio Vargas, there was economic recovery
but it was deficit-financed. The 1934 constitution
was liberal, but it was ignored. He distinguishes
Brazil’s military dictatorship (1964–85) from
those elsewhere in South America because it
maintained a “façade of democracy” and relative
due process. And he explains what ultimately led
to its undoing because of three sets of distortions
that were “especially costly in the 1980s: (1)
inflation, (2) currency overvaluation and Brazil’s
persistent balance of payments problem, and (3)
state interventions in the economy.
In Part II, The Making of Democratic Brazil,
Reid begins by explaining the difficult launch of
the New Republic: “Begun amid such hope, the
New Republic delivered only disappointments,”
and points out that when the coalition behind
it fractured, “for better or for worse a potential
opportunity for a radical rupture with the socio-
economicpatternsbequeathedbythedictatorship
was lost.” He itemizes changes made by the 1988
constitution, though noting that “it confused
constitutional principles with policy choices and
sometimes involved an absurd level of detail.”
After describing the soap opera that was
the Collor administration—“it was somehow
characteristic of Brazil’s problems that the man
who proclaimed it his mission to modernize his
country (and in part did so) practiced the old
patrimonial vice of blurring the public interest
with private ones”—Reid dissects how the
Real Plan conquered inflation and says of the
election of Cardoso, “Brazil’s slow accident-
prone transition to democracy finally seemed
complete.” The litany of lost opportunities for
structural reform that follows in the rest of the
book explains why it only seemed that way.
The transition from Cardoso to Lula was
encouraging. Lula in his 2002 Letter to the
Brazilian people reassured them that “stability
and control of the public accounts and of inflation
are today the patrimony of all Brazilians,” and so
it seemed throughout his first term. But, Reid
says, “The reality was that the cycle of faster
economic growth that had begun with the Real
Plan had run its course.” In fact, in his second
term Lula adopted “a somewhat more statist
economic policy.” Rousseff intensified this. She
and her administration accepted that “growth
would have to come more from investment
than consumption. But as a promised economic
recovery failed to arrive in 2012, they seemed to
panic.” After dissecting how things then went
wrong, Reid commented, “In footballing terms,
these policy mistakes were own goals. They
offered Brazilians no lasting benefit.”
But Read recognizes that starting with Cardoso,
income inequality fell for the first time since the
1960s, and “by guaranteeing that no Brazilian
should starve, Bolsa Família (Family Grant
Program) set a floor without which the notion
of democratic citizenship would have been a
mockery.” However, he does point out in what
follows that “the new middle class” is middle class
only in economic, not in social or cultural terms.
Reid does a particularly useful
job of setting the context for
what Brazil is going through
today.
12. 12 September 2014 Ÿ The Brazilian Economy
Reid makes trenchant comments on Petrobras
as a vehicle for politics and about land ownership
problems, but does note that “Brazil is an
agricultural superpower thanks to sustained
increases in productivity,” often with help from
state-owned Embrapa, a research operation.
He also is encouraged by the evidence of
entrepreneurial success in a variety of areas. In this
discussion he points out problems with the 1942
Labour Code, which was based on Mussolini’s,
which now has 900 articles, noting it is “almost
impossible to comply with the code in full.”
In Part III, Prospects, Reid looks at where Brazil
has been (its history) and asks tough questions
about where it might be going. For instance, in
his thorough discussion of foreign policy, Reid
simply asks, “What does Brazil really stand for,
and what does it want?”
Chapter 13, An Unreformed Leviathan, relies on
Reid’s habit of telling detail. “What marketers call
social classes C, D, and E, who make up more than
80 percent of the population, spend an average
of 3 to 4 hours a day on public transport, in many
cases on crowded buses or suburban trains. No
wonder they were angry about the fare rise.”
But they were angry about other things as well.
One demonstrator said, “Stop saying it’s about
fares, it’s for a better Brazil.” Reid comments that
“[Rousseff’s] initial response was to propose a
Constituent Assembly—as if she had just woken
up after falling asleep in 1984.”
In 2013, Reid notes, Brazil “boasted the world’s
most fragmented system”—the 12-party Rouseff
coalition administration brought total ministries
up to 39, which adds up to many more senior
patronage jobs and reflects “Brazil’s tradition of
patronage politics going back to the monarchy.”
He points out that “The constitution in the late
1980s decentralized revenue more than it did
responsibilities …. The result was a horrendously
expensive and inefficient arrangement.” He notes
that “In giving something to the have-nots, Lula
didn’t take away the privileges of the haves,” and
ties some of his and Rousseff’s activities to those
of “the corporate state of Vargas and Geisel.” In
discussing corruption Reid lays bare the roots of
“the voracious cupidity of a predatory class of
professional politicians.”
Quoting Mario Henrique Simonsen, Reid sums
up his theses by saying, “The great national
debate is not between left and right, but between
the modern and the archaic.” That remains
true.” He continues, “Unless Brazil abandons its
recent dalliance with a revival of the corporate
state and returns to trying to create an effective
regulatory one, it will not be able to meet the
demands of its increasingly empowered citizens
for more opportunities, better services, and a
better quality of life.” Yet depressing though his
analysis may be, he is not without hope. “The
protests of June 2013 suggested that Brazil’s
social transformation of the past two decades
has generated much more demanding citizens.
That was not before time.“
BOOK REVIEW
“The protests of June 2013
suggested that Brazil’s social
transformation of the past two
decades has generated much
more demanding citizens.”
13. COVER STORY
Solange Monteiro
BRAZIL’S INFRASTRUCTURE HAS BEEN a central topic of discussion—
and contention—since the Lula administration created the Growth
Acceleration Program (PAC) in January 2007. With transport and ports
then deteriorating after nearly three decades of low investment, there
was hope that Brazil’s economy would regain its dynamism.
Seven years later and with the second PAC program about to end
after awarding a large number of concessions for infrastructure,
the preliminary results show that the anticipated acceleration of
infrastructure projects has not occurred. According to InterB Consulting,
infrastructure investment has grown slightly above 2% of GDP, but at
least 4% is needed to meet the country’s needs. “In 2013, we recorded
2.4% of GDP; in 2014, the forecast is 2.5%. At that rate it would take 25
years to reach 4%,” says Claudio Frischtak, InterB president.
The investment program is now undergoing a mandatory review.
It will be the central topic at the Seminar on Infrastructure and Heavy
Construction in Brazil on September 30, in Rio de Janeiro, sponsored by
the Brazilian Institute of Economics of Getulio Vargas Foundation (IBRE).
Time for
a route
correction
With performance less than is necessary
to meet Brazil’s infrastructure demands
and with funding scarce, investment
needs to become more efficient.
September 2014 Ÿ The Brazilian Economy 13
14. 14 September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
There is no room for inefficiency if Brazil wants
to attract investors. High on the reform priorities to
accelerate infrastructure investment are reducing
excessive red tape, streamlining regulation, and
numerous microeconomic reforms. “We have
the tools, but we get the execution wrong,” says
Eduardo Zaidan, vice president of the Construction
Union of São Paulo (SindusCon). “We need a strong
business environment to support decisions to
invest when the backdrop is lower growth.”
CONSTRUCTION SLOWDOWN
Thecurrentuncertaintyhashadadepressingeffect
on the construction industry. IBRE staff estimate
that in 2014 the construction
sector will contract by at least
5.1% and perhaps as much as 8%
if sector confidence indices show
no significant improvement in
the second half of the year. “If
these projections are confirmed,
construction GDP will have
fallen by 0.7% a year for 2012–14
compared to annual growth of
5% for 2005–11,” says Armando
Castelar, IBRE coordinator of
applied economics. In the most
pessimistic IBRE scenario, fixed
investment would fall by 8.4% in 2014—the worst
contraction since 1996.
Zaidan points out that construction has
been slowing down since 2012, and the
construction industry has a large weight in total
investment—”42% of investment in Brazil goes
through the construction sector.” He adds, “The
construction activity we see today is a result of
decisions taken in the past. If new investment
decisions are made slowly, there will be no
possibility of a strong rebound next year.”
In the quarter ended in August, the IBRE
Construction Confidence Index showed a slight
improvement but was still 9.9% lower than in
the same period last year. Ana Maria Castelo,
coordinator of IBRE construction surveys, says that
“The current sluggish activity and uncertainty in
the construction industry underscore the limiting
factors for business. In August, for the first time,
the survey shows more concern about demand
than about a shortage of skilled labor.”
MY HOUSE, MY LIFE PROGRAM
One factor weighing on the housing sector is the
high price of real estate. “It is true that in the last
seven years, mortgage lending increased six fold
as a proportion of GDP, and it continu One factor
es to grow, but there are also limits on household
borrowing capacity. Property prices have tripled
and incomes have not kept
up,” Castelar says. There is also
uncertainty about whether the
MyHouseMyLifeprogramwillbe
renewed. That popular program,
which subsidizes housing for low-
income households, has financed
3.2 million homes. Zaidan notes
that“In2003,beforetheprogram,
only 30,000 properties were
financed in Brazil.”
José Carlos Martins, president
of the Chamber of the Brazilian
Construction Industry (CBIC),
advocates extension of the second PAC for six
months, until the third phase is in place: “The
transition from the first PAC to the second took 10
months … That can really disrupt the construction
sector.” He also advocates changes in the lending
terms to expand the benefits to other income
groups: “Today, someone earning R$1,600 pays
R$80 in mortgage payments, but someone
earning R$1,601 pays nearly R$400. A more
gradual schedule of interest rates and subsidies
would be better.”
HEAVY WORK
Like residential construction, industry, which is a
major factor in demand for heavy construction,
In 2014 the construction
sector will contract by at
least 5.1% and perhaps
as much as 8% if sector
confidence indices
show no significant
improvement.
15. 15September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
Brazil: Projected investment, 2014-2017
(Billions of Brazilian reais)
has clearly reduced its fixed investment because it
has not been performing well either. Public works
and the large number of infrastructure concessions
should support fixed investment, but they do
not. Armando Castelar and Claudio Frischtak
highlight some reasons: (1) The public sector
continues to dominate in some infrastructure
sectors, and it has major problems of bureaucracy,
mismanagement, and corruption. (2) The unstable
economic situation, with high inflation, increases
uncertainty about the long term. (3) Government
puts pressure on concessionaires to reduce their
rates of return. (4) Finally, regulatory agencies have
been weakened and privatization of public assets
has been politicized.
Joisa Campanher Dutra, coordinator of the
Center of Studies in Regulation and Infrastructure
(CERI) of the Getulio Vargas Foundation, describes
R$35
R$43
R$55
R$81
R$91
R$186
R$188
R$679
Oil and gas
Energy
• 40 GW
• 39,048 km
Railways
• 12,000 Km
Roads
• 7,500 Km
Urban transportation
Ports
Airports
16. 16 September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
what has been happening with regulators in
the last 20 years: “The initial motivation was to
build up a competitive market
and improve its efficiency. The
scenario has changed recently,
and the influence of politics
on regulation has increased
significantly. This does not create
a good business environment,
or attract new concessions,” she
says. Adds Vinicius Benevides,
president of the Brazilian
Association of Regulator y
Agencies (Abar), “More stable
regulation is a necessity because,
as we know, decisions about
investing in infrastructure take into consideration
primarily the size of the market, the political
environment, and the stability
of the regulatory framework.”
“It took more than a year
to reorganize the highway
system. The concession plan
was announced in August 2012
and construction contracts were
expected by April 2013. But so far,
wehavenorailwaysandports.All
this creates uncertainty about
the future,” says CBIC’s Martins.
Carioca Engineering, a
construction company, must
live with this uncertainty. The
Photo: Fernando Frazão/Agencia Brasil..
Social housing — Residential developments
of My House My Life program, Estácio
neighborhood in Rio de Janeiro
“The construction activity
we see today is a result of
decisions taken in the past.
If new investment decisions
are made slowly, there will
be no possibility of a strong
rebound next year.”
Eduardo Zaidan
17. 17September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
company is active in bidding for concessions and
public-private partnerships (PPPs). Even though
its contracts cover airports,
sanitation, oil and gas, and ports
and it expects to bring in R$2
billion in revenues this year, it
expects its revenues to drop 40%
in 2015. Why? Roberto Moscou,
general director of the company,
explains it’s the slowness of the
concession process. “In the case
of ports, for example, the law is
stranded in the Court of Audit.
Who will invest in private port
terminals if the rules are not
clear?”
Moscou says that, knowing the
limitations that are still present
in the process, the focus of his
company is structured deals and private clients,
although he acknowledges that “concessions
bring balance to the billing of
a construction company, which
is cyclical.”
Public procurement is a very
slow process, Moscou points
out. Carioca Engineering built
20km of the Rio de Janeiro
metropolitan beltway. “We
could have completed it in a
year and a half and we took
six years because there were
600 land expropriations to
be made,” Moscou says. “The
expropriations went slowly, we
had to stop the work, and we
lost money. In contrast, when
we built the port terminal of
Port of Santos — Delay in dredging projects restricts
movement of large ships.
“The current sluggish
activity and uncertainty in
the construction industry
underscore the limiting
factors for business. In
August, for the first time,
the survey shows more
concern about demand
than about a shortage of
skilled labor.”
Ana Maria Castelo
18. 18 September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
the Companhia Siderúrgica do Atlântico (CSA),
it was negotiated with the German executives
for seven months, but the day
after we signed the contract, we
were working with all permits in
hand.”
The research of economist
Carlos Campos of the Institute
of Applied Economic Research
(IPEA) illustrates how inefficiently
federal resources are used, as
measured by the difference
between resources authorized
for fixed investment by the
government and state-owned
enterprises, and those that are
effectively executed. Campos says that “Between
2003 and 2013 the country failed to use R $70
billion of funds authorized for
the transportation sector.”
Mauricio Muniz, PAC secretary,
argues that “PAC 2 saw a large
improvement in planning and
execution. Through last April,
R$871 billion were executed,
about85%ofthetotalauthorized
investment. We almost doubled
investmentscomparedwithPAC1.”
CBIC’s Martins thinks that to
really improve PAC budget
execution, it is necessary to
improve the whole planning
Rails grow — Expansion of investments
in railways is expected
“Over R$200 billion
projected in the Program
of Investment in Logistics
will only make up for the
current deficiencies in
infrastructure.”
Rodolpho Tourinho Neto
19. 19September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
system, starting with the quality of the projects
chosen and clarifying the responsibilities of
federal agencies to streamline
project controls.
WHO PAYS?
So far no initiative has provided
enough funding to raise public
investment in infrastructure, and
in coming years the government
will have even less fiscal room
to fund more investment. In the
2015 budget, the PAC and My
House My Life program have
additional resources totaling
R$65 billion, only a 2.7% nominal
increase over 2013.
Rodolpho Tourinho Neto, president of the
National Association of the Construction Industry
(Sinicon),isskepticalthatfunding
for infrastructure projects will
go up much: “Over R$200 billion
projected in the Program of
Investment in Logistics will
only make up for the current
deficiencies in infrastructure.
But we will still have to meet
and finance the future demand
for infrastructure.”
The National Development
Bank (BNDES), the principal
long-term lender in the country,
is more optimistic. The bank
expects to steadily increase its
“Today, someone earning
R$1,600 pays R$80 in
mortgage payments, but
someone earning R$1,601
pays nearly R$400.
A more gradual schedule
of interest rates and
subsidies would be better.”
José Carlos Martins
Urban transportation — Bus rapid transit (BRT)
Transcarioca is part of PAC.
Photo: cidadeolimpica.com.br
20. 20 September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
disbursements for infrastructure. “Since 2003,
disbursements for transport and logistics grew on
average 37% per year, reaching R$9.5 billion last
year. This year we hope disbursements will reach
R$12 billion and will continue to grow between
20% and 30% for at least the next three years,”
says Cleverson Aroeira da Silva, head of the BNDES
Logistics Department.
A l t h o u g h t h e B N D E S
disbursement plans sound
encouraging, they also worsen
the country’s fiscal situation,
Castelar observes. BNDES
subsidized loans are funded by
large Treasury’s transfers. “These
transfers, negligible in the
past, reached 9% of GDP. That
increases gross public debt,”
he warns. InterB’s Frischtak
says it is difficult for the private
financial system to compete
with BNDES subsidized credit.
According to BNDES, in July,
the bank was financing 377
infrastructure projects totaling
R$187 billion, representing 55% of the total cost of
the projects. Fritschak says the market has become
used to cheap BNDES funding, considering it a
compensation for Brazil’s high regulatory risk
premium.
Castelar warns that a better balance between
the BNDES and other lenders is imperative. “The
situation in which almost half the credit in the
Brazilian economy is not sensitive to the policy
interest rate causes the Central Bank to raise the
interest rate much more because it only affects
the other half of credit in the economy,” Castelar
says. Frischtak agrees: “We have a deep financial
and capital market, well regulated, which usually
works well, but we are not leveraging.” He believes
the risk should be shifted from the government to
the private sector, restricting the BNDES share of
project financing.
COURSE CORRECTION
Economists agree that it is
necessary to reduce political
and regulatory risks, which
are clouding the horizon for
investment. “When this is
done, we will be able to reduce
subsided loans and improve the
fiscal situation,” says Castelar.
Frischtak says that “a credible
economic policy” would raise
the economy’s potential growth,
increasefiscalspace, andimprove
the mood of investors.
The good news, Castelar
thinks, is that there has been
progress in planning, with better analysis and
more qualified people. PAC secretary Muniz
highlights several improvements in recent years:
“The Ministries have strengthened their planning
by hiring 720 infrastructure analysts, including
engineers, architects, and geologists; setting up
plans for transportation and energy; and improving
regulatoryframeworks.”Castelarsays,“Wehavealot
of waste. … We could save about 30% to 40% of the
money simply by managing projects better.”
“More stable regulation
is a necessity because, as
we know, decisions about
investing in infrastructure
take into consideration
primarily the size of the
market, the political
environment, and the
stability of the regulatory
framework.”
Vinicius Benevides
21. 21September 2014 Ÿ The Brazilian Economy
COVER STORY INFRASTRUCTURE
Camargo Corrêa was the first company
to bring Shield machines to Brazil,
specially designed for digging subway tunnels.
At 3,595 meters long, the Rio Negro
Bridge is the largest cable-stayed bridge
ever built across a river in Brazil.
Serra do Facão Hydroelectric
Power Plant (Goiás), producing enough
energy for a city of 1.2 million.
The Camargo Corrêa Construction Company has been building a history of pioneering
efforts, innovative solutions and commitment to sustainability for 75 years.
Prepared to face the various challenges of complex undertakings involving
large-scale logistics, Camargo Corrêa has become a benchmark in the engineering
and construction segment in Brazil and abroad. With 85% of its work geared toward
the private sector, it is also present in Latin America and Africa, and has delivered
over 500 jobs in various segments including urban mobility, hydroelectric power plants,
oil and natural gas, industrial buildings, and a wide range of infrastructure projects.
Camargo Corrêa Construction Company. Innovation and quality that transform realities.
CAMARGO CORRÊA.
A BETTER REALITY IS BUILT
THROUGH INNOVATION AND QUALITY.
The Laguna Bridge (Santa
Catarina) is Brazil’s third
largest, roughly three kilometers
long, with one cable-stayed
stretch 400 meters long.
22. AGRICULTURE
Chico Santos
IN AN OPEN LETTER to the candidates for the
Presidency, released in August, the Confederation
of Agriculture and Livestock of Brazil (CNA)
says that in 40 years agribusiness “tripled land
productivity, integrating the industry in dynamic
supply chains.” Currently it represents 23% of GDP
and accounts for 27% of the jobs created. In the
first half of this year agribusiness accounted for
44.4% (US$49 billion) of total exports.
According to the Center for Advanced Studies
in Applied Economics and the Luiz Queiroz School
of Agriculture, University of São Paulo (Cepea),
in the past 14 years the volume exported by
agribusiness grew 230% and its trade balance
(US$ 41 billion from January to June this year) has
expanded 468%. Because of this rapid growth,
cities founded in the 1980s, like Lucas do Rio Verde
and Sorriso in Mato Grosso state, have become
references in the economic map of Brazil. The
questions now are these: What needs to be done
to consolidate the results already achieved and to
ensure continued growth with greater balance
between the agricultural regions of the country?
And will there be enough demand to sustain the
sector’s growth?
Can Brazil’s agribusiness
become even more
productive?
Non-negotiable issues
EconomistMauroLopes,projectcoordinator,Center
for Agricultural Studies of the Brazilian Institute
of Economics (CEA-IBRE), says that, agricultural
organizationsandprofessionalbodieshaveidentified
atleast60importantissuesthatneedtobeaddressed
in the short, medium and long term. Four of these
are non-negotiable: expansion of infrastructure,
especiallyroads;expansionofagriculturalinsurance;
an active policy of phytosanitary control; and
expansion of resources for research. Research is
essential to increase productivity and better defend
crops against diseases and pests.
“When agribusiness can count on the planned
railways, highways, and waterways, it will be able
to rationalize distribution … with substantial
cost reductions and significant changes in how
domestic prices are formed, including more
rational use of land and other natural resources,”
says economist Geraldo Barros, Cepea coordinator.
The CNA acknowledges government’s efforts
to auction attractive road and railway concessions
but asks for a plan to expedite transition to an
intermodal logistics system instead of the current
22 September 2014 Ÿ The Brazilian Economy
23. 23September 2014 Ÿ The Brazilian Economy
AGRICULTURE
modelcenteredonroads—themostexpensiveofall
formsoftransport.BeyondthemainhighwaysIBRE’s
Lopes highlights the successful
experience of public-private
partnerships (PPPs) to which
farmers bring machines and state
governments,suchasMatoGrosso
state, bring asphalt for paving.
Limitations
The CNA document considers it
“unacceptable” that at this stage
only 8.7% of Brazilian crops are
covered by insurance. It says,
“Farmers have taken almost
all the risks and uncertainties
of agricultural production,
especially the volatility of
income.” That is why income insurance is a CNA
priority.
CNA says that those most vulnerable to these
oscillations are medium producers who do not
have access to financial markets, find the red tape
too difficult if they want to access rural credit,
are not eligible for the National Program for
Strengthening Family Agriculture (Pronaf), and
must deal with competitors within the Common
Market of the South (Mercosur).
According to Lopes, it would be possible to add
about 15 million hectares to the 76 million hectares
(9% of Brazil’s land) that is now under cultivation.
The problem, he says, is not finding the land, it is
finding the financing. Although the government
plans to allocate US$68 million to support the
2014/15 crop, 15% more than in the previous
year, the high costs of modern machinery, Lopes
says, mean the need for financing is immense
and farmers who are not yet
customers of the official credit
sources face great difficulty in
obtaining financing.
Cepea’s Barros notes that
investments in agribusiness
tend to expand rapidly in years
of bumper crops, but in these
moments of euphoria, major
problems arise: “It is common for
producerstomakecommitments
that are inconsistent with their
average income flow, increasing
the risk of default.” The solution,
he says, is “a policy of long-term
agricultural investment.”
Lopes thinks that this year farmers have some
capital, thanks to five consecutive years of good
prices, but they have “low resilience” to stress
surprises, such as too much or too little rain.
He and his team think a good alternative to the
shortage of capital for purchasing machinery
would be to adopt the Argentine model where
producers avoid heavy investments in machinery
by contracting with others to do mechanized
planting and mechanized harvesting. But this will
require a major change in behavior.
“When agribusiness can
count on the planned
railways, highways, and
waterways, it will be able
to rationalize distribution
… with substantial cost
reductions and significant
changes in how domestic
prices are formed.”
Geraldo Barros
24. 24 September 2014 Ÿ The Brazilian Economy
AGRICULTURE
Research and productivity
In the last two decades, total factor productivity
(TFP) in agribusiness grew 6.4% per year, according
to Barros. He believes this is the main change that
supports optimism that Brazil can take a larger
major role in the global food
market. But he is also concerned
that some higher productivity is
being bought with heavier land
use and deforestation.
The solution, he believes, is
public and private investment
in research in such areas as more
efficient soil management: “The
new challenges are continuing
advances in productivity and
efficiency in the control of new
pests and diseases that plague
agriculture, bearing in mind
environmental and social aspects. An old but still
major challenge is to also adapt research to the
Ladislaus Martin Neto, Embrapa’s executive
director of research and development, recognizes
that the problem of regional inequality is severe.
He says that some research responds to the
needs of poor farmers, but agricultural education
services for poor farmers are also needed. That
is why the National Agency for
Technical Assistance and Rural
Extension (Anater) has just been
created.
Martin Neto says that in the
last five years the government
has doubled Embrapa’s budget
to US$1.1billion in 2014, but
he notes that at barely 1% of
GDP, that is at most half of
what most successful countries
invest in agriculture. But he
is encouraged by an increase
of private investments in
coordination with public investments. New
opportunities will open, he says, adding that the
The CNA … asks for a plan
to expedite transition to
an intermodal logistics
system instead of the
current model centered
on roads—the most
expensive of all forms of
transport.
Argentine model — Planting corn in the Pampas region in Argentina. In Argentina,
producers avoid heavy investments in machinery by contracting with others to do
mechanized planting and harvesting.
needs of low-income farmers
and their families.” Barros
points out that 32% of the rural
population is still poor.
Ruralpovertyisconcentrated
in the north, particularly the
northeast. In the 2012/13 crop
year, corn yields in the north
and northeast were less than
half those recorded in the
midwest and the south, where
farming is in the hands of large
producers.
Embrapa
ThestarofBrazilianagricultural
research is the state-owned
Brazilian Agricultural Research
Corporation ( Embrapa ) ,
recognized throughout the
world for its achievements.
25. 25September 2014 Ÿ The Brazilian Economy
development of bioenergetics is still in its early
stages.
As an example, Martin Neto
cites the Inova Agro Plan, with
funding from the National
Bank for Economic and Social
Development (BNDES) and the
Financing Agency for Studies
and Projects (FINEP), launched
last year to encourage genetic
research, modernization of
machinery and equipment,
and other initiatives. “Today,
Embrapa has signed over a
hundred cooperation contracts
with companies,” he says, valued
at about US$1 billion.
Martin Neto says that one
current research target is diversification of
cultures, combining in the same area, for example,
grain crops, pasture, and forest. Brazil has 50–60
million hectares in pasture areas that could lend
themselves to better land management, but he
recognizes that transforming the approach will
require considerable research and use of modern
technologies to ensure gains in productivity and
efficiency, while still protecting
the environment.
Among new technologies
being tested at Cepea is
the use of unmanned aerial
vehicles (drones) to speed up
crop monitoring to detect, for
example, situations of water
stress, imbalances in irrigation,
and damage caused by pests
and diseases. Embrapa’s
Instrumentation Center in São
Carlos, São Paulo state, is also
doing research on the use of
drones.
An alternative to increasing
yields in soybeans, today Brazil’s main agricultural
commodity, is adding a third major crop to
corn and soybean production, though Lopes
worries that would increase pest and disease
risks. Embrapa’s Martin Neto is more optimistic
about a third crop, especially in irrigated areas.
Rural poverty is
concentrated in the north,
particularly the northeast.
In the 2012/13 crop year,
corn yields in the north and
northeast were less than
half those recorded in the
midwest and the south,
where farming is in the
hands of large producers.
Brazil's corn production and exports
(Millions of metric tons)
Source: Bureau of Foreign Trade (Secex) and National Supply Company (Conab).
0
10
20
30
40
50
60
70
80
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Exports Production
AGRICULTURE
26. 26 September 2014 Ÿ The Brazilian Economy
He thinks the risk can be reduced by continuous
monitoring by experts and prompt action to
minimize the risk.
continued growth of agribusiness.”
Martin Neto acknowledges the problem.
Today, he says, more than 150 pests could hit
New technology in the air — Drones speed up crop monitoring, detecting
situations of water stress, imbalances in irrigation, and damage caused by pests and
diseases. .
More planning
IBRE’s Lopes questions how
Brazil reacts to phytosanitary
issues ; he worries that
“whenever there is a new
disease outbreak in either
crops or livestock, there is a
rush to solve problems too
hastily and then struggle to
recover markets.” This situation
reflects a lack of planning to
anticipate problems and take
preemptive action.
“It is really necessary to
move to a higher phytosanitary
standard,” Cepea’s Barros
said, not only to avoid the
frequent interruptions of trade
associated with physosanitary
issues but also to have access to
the most demanding markets,
“an essential condition to the
Brazilian grain production has increased mainly because of higher
yields; cultivated area remained broadly the same.
Source: National Food Supply Company (Conab).
-
20
40
60
80
100
120
140
160
180
200
2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Area (Millions of hectares) Production (Millions of metric tons)
AGRICULTURE
27. 27September 2014 Ÿ The Brazilian Economy
Brazil’s agriculture. Embrapa’s
strategies are to eradicate pests,
seek pest-resistant seeds, and
share knowledge with partner
countries in order to anticipate
and prevent problems. These
preventive efforts are now being
systematized in a program in
which the Ministry of Agriculture
participates.
Secure demand
The recent fluctuation in the
prices of agricultural products
raises the other question: Will
there be markets for Brazil’s
expanding agricultural products?
IBRE researcher Ignez Vidigal Lopes points out
that China still has about a billion people in the
countryside, most of whom have to be “urbanized”
if they are to be considered part of the consumer
Among new technologies
being tested at Cepea
is the use of unmanned
aerial vehicles (drones) to
speed up crop monitoring
to detecting, for example,
situations of water stress,
imbalances in irrigation,
and damage caused by
pests and diseases.
market. She points out that
the U.N. Food and Agriculture
Organization expects by 2050
that Brazil’s food supply will
increase 40% so that it can meet
thedemandofninebillionpeople
around the world.
In 2013, China bought about
23% of Brazil’s agricultural
products and the EU bought
21%. Barros estimates that in
the next three to five years the
market for Brazilian agricultural
products will rely on the
growth of emerging countries:
“In the longer term, Brazilian
agribusiness should have as a goal to win markets
with higher value added, which are now in the
hands of developed countries,” he says. These
countries add value by processing the raw material
they import, as Germany does with coffee.
The
BRAZILIAN
ECONOMY
Subscriptions
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AGRICULTURE
28. 28 September 2014 Ÿ The Brazilian Economy
Thais Thimoteo
NO MATTER WHERE BUSINESSPEOPLE AND
CONSUMERS LOOK, they see no reason to feel
optimistic about the direction of the Brazilian
economy. The signs of a recession—GDP fell by
0.6% in June and 0.2% in March, two consecutive
quarters—uncertainty about the elections, and
the prospect of economic adjustments in 2015
have brought Confidence Indexes in 2014 down to
the levels seen during the 2009 global crisis. Since
December2013,theBusinessConfidenceindicator(ICE)
has fallen by 12%. Manufacturing and construction
have consistently had the gloomiest prospects, even
thoughtheconstructionindicatorwentupinAugust
and manufacturing in both July and August.
Expectations
Althoughtherearemorebusinessdaysuntiltheend
of the year, there are not enough to make up for
eight consecutive months of decline in the Industry
Confidence Index (83.4 points, August), according
to Aloisio Campelo, IBRE assistant superintendent
of business cycles.
“ConfidencewasworsethanexpectedinAugust,”
he says. “Street protests and days off because of the
World Cup reduced services and commerce activity,
exacerbating the decline in demand. But even
though there are low expectations for the future,
we can expect some improvement in services and
commerce in the coming months.” He explains
that “In the case of manufacturing, the outlook
is worse because inventories have accumulated,
and domestic demand is very weak because of
competition with imported manufactures. After
intense activity to complete World Cup-related
projects, construction is not seeing much recovery
related to infrastructure and social housing
projects.” Campelo also attributes the situation to
increased household indebtedness.”
The World Cup and the days off briefly spurred
consumer confidence in the economic outlook, but
after a little more good cheer in July, the Consumer
Confidence Index fell again by 4.3% in August, to
the lowest level since April of 2009. Viviane Seda,
coordinator of IBRE consumer surveys, thinks the
disappointing result reflects the dissatisfaction of
Brazilians with the state of the economy as a whole.
Consumers are concerned about the labor
market, which has shown signs of slackening—
something that did not happen in 2009. This year In
August, 58% of those interviewed thought it is now
more difficult to find jobs. “Not only are there fewer
job vacancies, but negotiating wages must also be
more difficult,” Seda said. “Consumers’ perception
of getting a job today and expectations about
future employment have become more negative
in the last four months.”
The pessimism
continues
ECONOMY
29. 29September 2014 Ÿ The Brazilian Economy
ECONOMY
Campelo believes that until the end of 2014
the negative business outlook is almost a
given considering the final days of a lame-duck
government and uncertainty about the path of
inflation. Uncertainty tends to delay investments.
In 2015, once the new government defines its
policies, Campelo thinks, confidence should rise,
though not to the peaks seen after the 2010
presidential election. “There is concern about what
commitments presidential candidates will make
during the election campaign, and what coalition of
parties will support the new government,” he says.
Investments
The low level of Use of Installed Capacity of Industry
(NUCI) in August (83.2%) also suggests that fixed
investments will not materialize, since industrial
inventories are still full and there is no demand for
machinery and equipment or hiring.
The IBRE forecast of a decline of 6.5% in gross
capital formation in 2014 underlines the worrying
investment situation, at least in the short term.
However, Campelo believes investment will swing
up again in 2015. “It is unlikely that fixed investment
will fall again next year because it is essentially
cyclical, unless we run into an energy crisis or a deep
slowdown in the United States and Europe,” he
concludes, noting, however, that fixed investment
will recover only enough to make up for the losses
in 2014.
The IBRE forecast of a decline of
6.5% in gross capital formation
in 2014 underlines the worrying
investment situation, at least in
the short term.
Confidence going downhill
(Index base 100= average of last 5 years)
80
85
90
95
100
105
110
Aug.2010
Oct.2010
Dec.2010
Feb.2011
Apr.2011
Jun.2011
Aug.2011
Oct.2011
Dec.2011
Feb.2012
Apr.2012
Jun.2012
Aug.2012
Oct.2012
Dec.2012
Feb.2013
Apr.2013
Jun.2013
Aug.2013
Oct.2013
Dec.2013
Feb.2014
Apr.2014
Jun.2014
Aug.2014
* The Business Confidence Index is a weighted average of the confidence of industry, services, commerce, and construction sectors.
Source: IBRE.
Business Confidence Index Consumer Confidence Index
30. 30 September 2014 Ÿ The Brazilian Economy
INTERNATIONAL TRADE
Solange Monteiro
THE INCREASE IN THE percentage services
contribute to exported goods reflects the
importance the sector is gaining in international
trade. In the United States and India, services
already account for added value of 50% of total
gross exports. For Brazil, the addition is 37%,
equivalent to South Korea and Canada. But as a
share of the world service market, Brazil’s services
exports are small: in 2012, they accounted for 0.9%
of the world total, compared with China’s 4.4% and
India’s 3.3%. China is the fifth largest exporter of
services, and India is the seventh.
In the last decade, Brazil’s trade deficit in services
increased almost tenfold: from US$5 billion in 2003
toUS$47billionin2013.“Thisdeficitalreadyexceeds
the income deficit, which last year reached US$40
Services without borders
billion,” points out Lia Valls Pereira, researcher at the
Brazilian Institute of Economics. In a presentation
at the 33rd National Foreign Trade Meeting last
August in Rio de Janeiro, she said she saw no sign
of a turnaround: “We are importing more services,
but have not been able to incorporate them as
a competitive factor in our exports, especially
manufacturing exports,” she said, highlighting the
low share of spending on royalties and licenses. Last
year, the main areas using imported services were
international travel (29%), renting of machinery and
equipment (22%), and transport (18%).
Nelson Fujimoto is Secretary of Commerce and
Services of the Ministry of Development, Industry
and Foreign Trade. At the event he argued that the
country should not try to limit services imports
31. 31September 2014 Ÿ The Brazilian Economy
INTERNATIONAL TRADE
but instead should stimulate
its service exports. “Some of
these imports are the result of
more investment in productive
sectors: oil sector demand for
machinery and equipment, and
hiringwaterwaytransportationto
carry commodities,” he stressed.
Fujimoto said that two years
ago the Ministry improved data
collection and the compilation
of statistics on the export of
services by creating the Brazilian
Classification of Services, Intangibles and Other
Operations that Produce Changes in Assets and
putting in place the Integrated Foreign Trade
System. The data now being gathered reinforce the
view that Brazil is more competitive in construction
professional services—such as engineering,
architecture, research and development and
technical assistance, which currently dominate its
export basket—and in information technology.
“We have also identified opportunities to diversify
trading partners,” Fujimoto
said. “Our services export are
concentrated in the United
States (31%), followed by
the Netherlands (7.18%) and
Germany (5.5%). We should be
encouraging China to purchase
Brazilian services.”
According to Valls Pereira,
raising Brazil’s share of the world
services market will depend
cruciallyonincreasedproductivity
and competitiveness, which
implies heavier investment in educating and
training workers, innovation, and negotiating
international agreements on services. “The product
fragmentation observed in the services sector
clearly shows the need for international trade
negotiations,” she said. “Unfortunately, Brazil has
done very little in this regard. We have to improve
our trade negotiation agenda principally with
neighboring countries, if we want to become the
hub of the regional supply chain.”
-25 -20 -15 -10 -5 0 5
Source:CentralBankofBrazil
Brazil's service and income balance, 2013
(US$ billions)
Direct investment income
Equipment rental
International travel
Income from investment portfolio
Transportation
Income from other investments
Information technology
Royalties and license fees
Personal, cultural and recreational
Governement
Insurance
Wages and salaries
Other services
Financial services
Professional services
Engineering and construction
Real estate rental
“Our services export are
concentrated in the United
States (31%), followed by
the Netherlands (7.18%)
and Germany (5.5%). We
should be encouraging
China to purchase Brazilian
services.”
Nelson Fujimoto
32. 32 September 2014 Ÿ The Brazilian Economy
Wanted:
More markets and
better Brazilian
products
INTERNATIONAL TRADE
BRAZIL’S TRADE BALANCE was US$2.4 billion in
2013, after recording double-digit surpluses going
back to 2002; trade surplus projections for 2014
are about the same as last year. Because of the
declining trade surplus, the current account deficit
is around US$ 80 billion and warning lights are on
as it approaches 3.5% to 4% of GDP. No currency
crisis is expected, but in 2013 the country had to
use part of its international reserves (US$6 billion)
to finance the current account deficit (US$81
billion).
The trade deficit in oil and oil products, which
rose from US$5 billion to US$20 billion between
2012 and 2013, has contributed significantly to
the deterioration in the trade balance as a whole.
The oil deficit rose because oil rig problems have
reduced production and price controls on sales of
domestic fuel sales have pushed up fuel imports.
Once these issues are remedied, it would be
possible to resume higher trade balance surpluses.
Trade surpluses
Improvement in the oil trade balance is essential to
improve performance of the general trade balance,
but other factors also contributed to the general
decline. Between 2002 and 2007, Brazil’s trade
surplus went from US$13 billion to US$40 billion,
peaking at US$46 billion in 2006. In 2003 Brazil’s
trade surplus with China was US$2 billion, though
it fell thereafter. During this period Brazil posted
trade surpluses with South America, the European
Union, and the United States. In 2008, the surplus
fell to US$25 billion as trade surpluses declined
in most markets, particularly in the United States,
and in trade with China a deficit of US$3.5 billion
emerged.
After 2009, Brazil posted trade surpluses with
South America and China. Brazil has posted trade
deficits with the United States since 2009, because
of both declining demand and less competitive
Brazilian products. Since 2013 Brazil has posted
trade deficits with the European Union and other
countries.
The trade surplus with South American countries
has declined since 2011, mainly because of the
Argentine crisis but also because exports to other
countries in the region dropped. To raise Brazil’s
trade surplus with neighboring countries means
manufacturing exports will have to improve,
because they represent 80% of Brazilian exports
within theregion. This brings us again to theissue of
the competitiveness of Brazilian products. Outside
the Mercosur countries, the other major economies
in the region (Chile, Colombia, and Peru) have
signed agreements with the United States, the
European Union, and China (except Colombia). As
result of these trade agreements, Brazil has lost the
advantage of preferential import tariffs.
Lia Baker Valls Pereira
IBRE researcher; adjunct professor, Department of
Economics, University of Rio de Janeiro State (UERJ).
33. 33September 2014 Ÿ The Brazilian Economy
In the past high
commodity prices
improved Brazil’s
trade balance with
China, but if Brazil
is to post trade
surpluses of close
to US$20 billion,
commodity exports
only to China and oil
exports elsewhere
may not be sufficient.
INTERNATIONAL TRADE
A n e a r- t e r m b o o m i n
commodity prices is unlikely. We
do not consider that a slower
pace of growth in China, around
7%, will have a major impact on
Brazilian exports to that market.
Even if Brazil exports of iron ore
and soybeans to China declines,
diversification of agricultural
exports could ensure continued
trade surpluses there.
Pessimistic scenario
In general, as an economy grows
less, imports decline and the
trade balance improves. In 2013
Brazil grew by 2.3% and in 2014
growth is expected to be near
or below 1%, yet despite lower
growth the trade balance has
worsened. Appreciation of
the exchange rate may have
contributed to increase imports,
and loss of competitiveness has
reduced exports.
Earning trade surpluses of
US$20 billion or so will require
changes in the composition of
foreign trade.
In short, the worsening of the
trade balance started before
the 2008 crisis. In the past high
commodity prices improved
Brazil’s trade balance with China,
but if Brazil is to post trade
surpluses of close to US$20
billion, commodity exports
only to China and oil exports
elsewhere may not be sufficient.
Brazil needs also to address the
competitiveness of its exports to
improve its trade balance with
the United States, the European
Union, and other countries.
-15
-10
-5
0
5
10
15
20
Other
countries
South AmericaEuropean UnionChinaThe U.S.
2002 3002 4002 5002 6002 7002 8002 9002 0102 1102 2102 3102 *4102
-10
0
10
20
30
40
50
Total
Brazil's bilateral trade balance by country
(U$ billions)
Source: Ministry of Development, Industry and Commerce.
34. 34 September 2014 Ÿ The Brazilian Economy
The Brazilian Economy—The trial of
government officials involved in the
congressional vote-buying scheme
was historic for its character and
popularity. Two years later, how is it
affecting the behavior of voters and
the presidential candidates?
Joaquim Falcão—I never thought
of the trial as something that would
have electoral consequences but
rather as an improvement of our
democracy. What was the improve-
ment? First, the Supreme Court was
able to make a decision in a timely
manner that responded to national
interests. On trial were not only the
defendants but also the Supreme
Court itself. Society asked: Will the
Photo: Release Law school FGV- Rio
Joaquim Falcão
Dean of the Law School of FGV Rio
Solange Monteiro, Claudio Conceição, and Bertholdo Castro
THELAWSCHOOLOFFGVRioinAugustpublishedtheresultsofamajorstudy
oftheBrazilianSupremeCourt.LawSchoolDeanandProfessorJoaquimFalcão
was a member of the National Council of Justice* from June 2005 to June
2009 and earlier earned an LLM from Harvard Law School. Here he explains
the implications of the Supreme Court conviction of government officials
involved in the congressional vote-buying scheme and discusses how the
court is now perceived. He also believes that last year’s street protests did not
wantpoliticalreformbutbetterpublicservices,“becausethenewcitizenisnot
the worker. He is the consumer, a consumer of public services and regulated
services.” Falcão says the Supreme Court has stopped discussing “abstract
legal doctrines and began to address actual social problems.” He adds that
“what unfortunately it has failed to address are the economic issues related
to past economic plans.”
*TheNationalCouncilofJusticeisanagencyoftheBrazilianJudicialSystemcreatedin2004.The15-mem-
ber Council is headed by the Chief Justice of the Supreme Court. Among its responsibilities are ensuring
that the judicial system remains autonomous, conducting disciplinary proceedings against members of
the judiciary, and compiling and publishing statistics on the Brazilian court system.
The political
strength of
ethics
INTERVIEW
35. 35September 2014 Ÿ The Brazilian Economy
INTERVIEW
Court be able to make a decision?
I thought of the trial as demonstrating what
I call the political strength of ethics—not
just the authority of ethics, but ethics as an
instrument of integrity in public administra-
tion. Ethical misconduct is not exactly unique
to Brazil. In recent years the chief justice of
Spain, the president of Germany, the prime
minister of Italy, President Sarkozy of France,
high Chinese officials—they
have all been accused of
ethical misconduct. There is
a pressure on the economic,
political and legal system
worldwide in favor of public
integrity. In Brazil, this issue
has greatly affected the
Workers’ Party (PT). It is not
only an election issue. It is
something much broader that
affected the credibility of the
PT government at the time.
Do we now have less tolerance
for corruption?
Corruption is not an issue of
one individual, one party, even one nation.
The congressional vote-buying scheme
involved more than the PT; it also had to do
with relations between public and private
institutions: Congress, political parties, busi-
nesspeople, banks, advertising agencies. The
government alone does not cause corruption.
The challenge in the trial of the vote-buying
scheme was whether the Supreme Court
would be able to recognize two basic chal-
lenges: the fairness of a trial that respects the
rights of the defense yet at the same time the
defense of public integrity. Convictions had to
be seen as having been done in a legitimate
way after all rights and defense appeals were
exhausted. It was a fair trial. The trial broad-
cast removed any doubt. Society watched and
also judged.
Did the trial improve the public image of the
Supreme Court?
The judiciary does justice on behalf of the
people. Although justices and
judges cannot be replaced by
the people, they represent
the people as much as the
executive and the legislature
branches. Courts have to
act in tune with the sense
of justice of the people. ... If
they are not in tune, they run
the risk of increasing popular
distrust of the magistrates, the
institutions, and the Supreme
Court. The Supreme Court
has regained its lost legiti-
macy because it got closer to
the people’s interests. It has
ruled on many issues, such as
homosexual unions, drugs, freedom of the
press, the racial quota system, among many
others. It has stopped discussing abstract
legal doctrines and moved on to confront the
actual problems of Brazilians.
What the Supreme Court unfortunately has
failed to address are economic issues related
to past economic plans.1
Chief Justice Joaquim
Barbosa tried it but postponed it due to pres-
sure from the executive branch and lobbying
from banks. This is bad because when the
Supreme Court does not face an issue, it
prolongs a situation of legal uncertainty for
“I thought of the
(vote-buying) trial as
demonstrating what
I call the political
strength of ethics—
not just the authority
of ethics, but ethics
as an instrument of
integrity in public
administration.”
36. 36 September 2014 Ÿ The Brazilian Economy
INTERVIEW
creditors and debtors and the business envi-
ronment.
The Supreme Court has been ruling on issues
that the legislature might ignore for political
reasons. Is this an appropriate role for the
Supreme Court?
The Constitution says that the powers are
independent and harmonious among them-
selves. This is an ideal situation. But the
reality is different; there is a
permanent tension between
the powers. … Democracy
is the recognition of conflict
and tension, and a nonviolent
protocol to solve them.
Tension between executive,
legislative, and judiciary is a
reality. Often the Supreme
Court takes the initiative and
is more daring. The legislature
can react but has not done so.
It has allowed the Supreme
Court to be more proactive.
For example, in Congress there
is no consensus on issues
related to racial quotas or
abortion. The churches lobby very strongly
against abortion and those in Congress do not
want to lose votes. … The drug issue is another
example: It was excessive to classify drug users
as drug dealers, a crime without bail. As a result
the prisons are crowded. … Countries like
Portugal, Uruguay, several states, the United
Nations, all have said that the current war on
drugs has failed. But if you propose any change
to decriminalize or prioritize health in the fight
against drugs in Brazil, the research shows that
the public wants more repression. …
Congress does not want to lead on long-
term reforms, which are incompatible with the
short cycle of elections. This creates opportu-
nities for other powers, such as the judiciary.
It creates a space for more efficient legislation.
There can be no vacuum in politics, and the
Supreme Court advances.
What do you think about the Supreme Court
decision to ban corporate donations to polit-
ical campaigns and political
parties?
We cannot analyze one type
of funding alone, as was
done with corporate dona-
tions to political campaigns.
It is necessary to analyze
campaign finance as a whole.
There are several sources
of funds: government fund,
the parties, the candidate’s
own resources, individual
voter donations, businesses,
NGOs, foundations. One
[source] cannot be banned
without assessing the effects
on campaign financing as
a whole. Congress is responsible for reex-
amining campaign financing, but because
members of Congress are afraid to change
it, the issue ended up with the judiciary. The
Supreme Court cannot change campaign
financing as a whole, because it can only
rule on the specific case submitted to it. I
fear that if we ban only corporate donations,
when we do not have a culture of individual
donations to political campaigns, government
funding will become absolute. I do not think
it is good for the government to interfere
“Corruption is not
an issue of one
individual, one party,
even one nation.
The congressional
vote-buying scheme
involved more than
the PT; it also had
to do with relations
between public and
private institutions.”
37. 37September 2014 Ÿ The Brazilian Economy
INTERVIEW
so much in political campaigns. We should
consider a campaign financing system with
a large variety of sources, competitive, trans-
parent, and regulated. It would be better for
democracy.
Do you think that society is prepared to partici-
pate in the discussion of political reform, as
suggested by President Rousseff after the
demonstrations of 2013?
At the time the protesters did not want
political reform. Their issue
was the quality of public
services and corruption in
public services. That is why
the people went to the street.
Against the transport lobby
that knows no bounds. …
Voters today want quality
public services. They want
safety, and health.
The situation is different in
schools. Surveys show that
parents are happy with the
education given in schools,
even if the quality in some
schools leaves a lot to be desired. But they
are not happy with safety, health, and public
services—immediate issues that afflict the
population, the everyday life of cities, which
decides the vote.
What are the main conclusions of the FGV Law
School study of the Supreme Court?
The study shows deviations in the Supreme
Court’s actual day-to-day performance. For
example, the Supreme Court should be a
collegial body. But over 90% of the decisions
are individual, monocratic. These occupy the
time of the justices. It also found that many
of the decisions are based not on merit, but
on procedural issues. … For example, the law
says that if the justices ask to review a process,
they should return it in 15 days. The average
is over 300 days. … It is against the law.
Society provides everything to the justices
of the Supreme Court: they have resources,
they are well chosen, and society respects
them. The justices have to be efficient, to act
within the procedural rules, which sometimes
they do not. Our data have
not been disputed. On the
contrary, they have been used
by several justices to give new
directions.
Do delays in justice create
injustice?
Delays in justice create
legal uncertainty, which is
conducive to injustice. Or to
no justice at all. We did a study
that classified the types of
legal uncertainty. The most
important is administrative,
resulting from long processing time. You
never know when you will get the decision.
This insecurity permeates the entire judiciary.
Brazilians do not complain that the judiciary
decides wrongly, they complain about the
time it takes to get a judicial ruling. In social
and economic life we need an environment
with predictability. (…)
1
At stake is a court decision that may require that the country’s banks pay billions of
dollars to holders of savings accounts during the Collor (1990-1992), Bresser (1987)
and Summer (1989) economic stabilization plans. According to the Brazilian Bank
Federation (FEBRABAN), compensation payments could reach about US$150 billion,
more than the net worth of the five largest banks. This would reduce banks’ capital,
jeopardize financial stability, and possibly require massive government intervention
to recapitalize the banking system.
“The judiciary does
justice on behalf of
the people. Although
justices and judges
cannot be replaced
by the people, they
represent the people
as much as the
executive and the
legislature branches.”
39. 39September 2014 Ÿ The Brazilian Economy
REGIONAL ECONOMIC CLIMATE
World economic climate improves; Latin America’s worsens.
Lia Baker Valls Pereira
Center for International Trade Studies, IBRE
lia.valls@fgv.br
THE IFO-FGV ECONOMIC CLIMATE IN Latin
America indicator (ICE) has been headed
downward since April 2013. In July, the index
fell 6.7% from April as both the assessment
of the current situation and expectations
deteriorated. Because the indicators are
weighted by the share of total trade (exports
plus imports) of each country in the region,
they also reflect the large weights of Mexico
(35%) and Brazil (23%). More detailed analysis
also suggests that countries in the region are
having different experiences. Mexico was the
only large economy that saw its economic
climate improve. Brazil’s performance was as
bad as Argentina’s, and both were worse than
the region as a whole. Mexico’s ICE increased by
4%; Brazil’s fell by 22% and Argentina’s by 24%.
Brazil’s own economic climate indicator has
been deteriorating since July 2013. According
to a separate survey conducted twice a year
on the main obstacles to economic growth,
Brazil’s performance reflects both a lack of
confidence in government policies and a loss
of international competitiveness.
Although Chile’s economic climate declined
by 6%, the expectations have improved, which
suggests that the economy is recovering. All
of Argentina’s indicators worsened, and all of
Venezuela’s have been at the bottom since
July 2013.
The worsening of some of the major
economies in the region explains why the world
and the Latin America economic climates have
been diverging since April 2013. Improvement
in the world economic climate in July was led
The Economic Climate Indicator is a quarterly survey conducted by the German Ifo Institute for Economic Research—the Ifo World Economic Survey (WES)—
and the Brazilian Institute of Economics of the Getulio Vargas Foundation The ECI is an average of the assessment of the current situation and expectations
for the next six months based on the answers of country experts to questions on key macroeconomic data (consumption, investment, inflation, trade balance,
interest and exchange rates). The indicators are weighted by the share of trade of each country in the region.
http://portalibre.fgv.br/main.jsp?lumPageId=402880811D8E34B9011D985336A53DBD
by the United States and Asia, particularly China and India. The
good news in the U.S. may thus be a factor in Mexico’s favorable
performance indicators. But then we would expect that the
improvements in China’s economic performance would have
a positive impact on major commodity exporters like Brazil.
What’s going on?
Signs of improvement in China’s economy have not
translated into increases in commodity prices, as they did in
2007–11, so we do not expect the positive income shock that
would be associated with an increase in revenue for major
commodity exporters. Domestic issues, among them inflation,
low investment, and controls on energy prices, will continue
to depress the economies of Brazil, Argentina, and Venezuela.
The world economic climate warms as Latin
America’s and Brazil’s cool
40
60
80
100
120
140
160
180
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Latin America Economic Climate Index
World Economic Climate Index
Brazil's Economic Climate Index
Sources: Ifo World Economic Survey and IBRE-FGV.