Archive for November, 2009

Volkswagen swells Brazil foreign investment legion

November 27th, 2009

The announcement of a $3.5 billion investment by Volkswagen on Thursday is the just the latest in a string of recent moves by foreign companies in Brazil.

VW intends to spend the money by 2014, when it will also sponsor the country’s national football team as it hosts the FIFA World Cup for the second time.

VW’s investment comes hot on the heels of Ford, which last week said it will plough $2.3 billion into an expansion programme until 2015.

Brazil’s car makers are expecting record sales this year after temporary cuts in taxes paid by producers were passed onto buyers

Michelin too is getting in on the act, investing ‘hundreds of millions of dollars’ in a new factory in Rio de Janeiro state, aimed at doubling its tyre making capacity in Brazil.

If that were not enough, October saw foreigners line up to invest $17.1 billion into Brazil’s financial markets - a record since the country’s Central Bank began calculating figures in 1947.

Whereas Brazil’s economy would have been devastated by such a global economic downturn downturn in the past, the relative lack of exposure of its banks to toxic US mortgage debts that fuelled the crisis have helped the country pull through largely unscathed.

Having been one of the last countries around the world into recession, Brazil was one of the first out, after economy returned to growth in the second quarter of this year.

While his precedessor Fernando Henrique Cardoso can quite rightly claim much of the credit for the groundwork laid for Brazil’s current stability, those who previously mocked Brazilian President Inácio Lula da Silva’s comments that the crisis would prove to be a small wave rather a tsunami, may be entitled to feel just a little foolish.

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Controversial Iranian leader in new Brazil visit

November 23rd, 2009

Photo: karimii,flickr

Photo: karimii,flickr

Brazilian President Luiz Inácio Lula da Silva is expected to raise human rights issues with Iranian leader Mahmoud, Ahmadinejad, while outlining his continued support for Iran’s nuclear programme, which has sent alarm bells ringing among western nations.

Ahmadinejad makes a stopover in Brazil on Monday, as part of a five-nation trip, including: Bolivia, Venezuela, Senegal and Gambia, aimed at boosting economic ties.

Last week, Iran appeared to reject plans to send most of its stocks of low-enriched uranium abroad, delivering a heavy blow to UN-brokered efforts to ease Western fears it could use the material to make a nuclear bomb.

So far, Brazil has far backed the Islamic state saying it has the right to peaceful nuclear power. President Lula is opposed to international sanctions on Iran.

On a visit to Brazil two weeks ago, Israeli President Shimon Peres called on Brazil to use its influence to challenge Iranian threats against his country.

Though Iran insists its nuclear energy programme is for peaceful purposes, Ahmadinejad’s previous questioning of neighbouring Israel’s right to exist has provoked understandable nervousness.

For the Brazilian government, the visit is seen as an opportunity to boost trade links, while developing an independent foreign policy, including relations with increasingly influential countries.

In May, Ahmadinejad cancelled a visit to Brazil scheduled, staying at home to concentrate on elections, the results of which later sparked widespread protests by opposition groups, amid allegations of fraud.

Ahmadinejad’s new visit, like first one has angered Jewish and human rights groups, leading to protests in Brazil.

Opponents of the visit argue Brazil should not be rolling out the red carpet to a leader who has repeatedly questioned whether the holocaust took place and openly supports the oppression of women and the persecution of homosexuals.

Protestors, waving placards in Rio de Janeiro on Sunday, compared Ahmadinejad’s denial of the holocaust with denying the shipment of three million slaves from Africa to Brazil from the 16th to the end of the 19th century.

The treatment of women´s rights and the persecution of gays are seen as other reasons why Brazil should not get involved with Iran.

Opponents also say Lula  — a symbol of Brazil´s struggle to free itself from military dictatorship — should not be rolling out the red carpet to a leader who openly promotes oppression.

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‘Lightning strikes’ hit Presidential election race

November 12th, 2009

Getting their heads together. Lula with Dilma

Getting their heads together. Lula with Dilma. Photo: Agencia Brasil

Brazilian President Luiz Inácio Lula da Silva finds himself having to shield his preferred candidate to replace him from criticism, after late night power cuts hit 18 states across Brazil earlier this week.

Before she became Lula’s chief of staff, Dilma Rousseff, who is being treated for lymph cancer, was energy minister, but the president says he won’t be ready to apportion blame until the facts are known.

With Brazil, hosting the FIFA World Cup in 2012 and having last month been awarded the 2016 Olympic Games, the government will be keen to head off any suggestion the country’s ability to do so is in any way compromised by the events of Tuesday night.

Well before the Olympic announcement, the issue of power cuts was a politically sensitive one.

Instances during the previous government of Fernando Henrique Cardoso, who was in office for eight years until the end of 2002, prompted finger pointing and accusations of a lack of planning.

‘Rationing is bungling’

“Today we have an inter-connected Brazilian electricity system,” President Lula said. “In this last seven years we have put in place approximately 30% of what was done in 123 years.”

Claims of progress appeared to be backed by ABDIB, the body representing the infrastructure building sector, which like many others is calling for a far-reaching investigation.

Presidential elections will be held at the end of next year, with Dilma trailing in the polls behind frontrunner José Serra, in a race that has been billed by observers as a contest between two competent administrators lacking in charisma.

Though the government insists the problems do not stem from her watch, Dilma was notified in July of the potential for a blackout.

“A blackout is a thing that no one can say won’t happen. What I promised is that there will not be rationing. Rationing is bungling,” said Dilma, who is aiming to become Brazil’s first female head of state.

Dilma, like others, is citing lightning strikes as the most likely cause, something dismissed by the National Airspace Research Institute, which provides satellite data to meteorologists.

Photo: Agencia Brasil

Until more is known about the incident, Serra, from the PSDB party, was careful not to blame the government, but with close to half the national electricity capacity affected, he said it is vital to get to the bottom of the matter quickly.

“We have to know what happened so measures can be taken,”  Serra, the governor of Sấo Paulo state (pictured right) told reporters.

Political stress

The incident, which left 60 million people without light and also fed through to water supplies, has put increased strains on the relationship between Lula’s Workers Party PT and rival PMDB with which it has forged an often shaky alliance.

Should Dilma win power, her party is expected to remain dependent on PMDB to get legislation through the Senate – a source of anger for her party and those in Brazil, who see PMDB as opportunists from a bygone age doing little promote development and prevent corruption.

The president was heavily criticised from all sides for sticking with the alliance through a corruption scandal, which for a time this year threatened to topple Senate President José Sarney, before charges against him were dropped.

As part of earlier efforts to smooth relations with Sarney and his PMDB party, Edison Lobấo was installed as energy minister, when seats in government were handed out.

How Lula now deals with Lobấo could have a significant impact on that alliance.

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Large parts of Brazil plunged into darkness

November 11th, 2009

Sao Paulo fell prey to the blackout. Photo: Fernando Stankuns, flickr

Sấo Paulo on Tuesday night. Photo: Fernando Stankuns, flickr

Authorities are investigating the causes of a massive power cut, which reportedly blacked out areas in as many as 18 of Brazil’s 26 states, the federal district and neighbouring Paraguay late on Tuesday night.

So far, the finger has been pointed at everything from some sort of atmospheric phenomenon to an accident affecting one or more transmission points from the giant hydro-electric complex at Itaipu on the border with Paraguay.

Rio de Janeiro state was among the worst affected regions, according to Mining Minister Edison Lobão.

At 6am Itaipu’s generating stations were said to be working normally again.

A note from the plant’s operators said within 15 minutes of the power cut Paraguay’s network was already receiving electricity from Itaipu, underlining the possible causes as an external fault.

Itaipu, which has an installed capacity of 14,000 megawatts, supplies close to 20% of Brazil’s consumption and 87% of Paraguay’s needs.

The major power outage led to traffic chaos in cities such as Sấo Paulo with traffic lights out of action. As night became day, the city’s water companies struggled to get the system working again, leaving nearly 7 million people without supplies.

Power cuts back in 2001, when a lack of planning was blamed, have made the issue politically sensitive.

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Rise of militias boost security policy calls for Rio shantytowns

November 10th, 2009

Photo: Gang'Star, flickr

The growth of militias in Rio de Janiero’s shantytowns is cited as the most alarming aspect of a study into serious levels of violence released by Rio de Janeiro State University.

“The army, federal, state and city police must unite around a security policy capable of meeting this threat,” Alba Zaluar, a sociologist, who worked on the study in conjunction with the university’s applied statistics department said, according to government news agency Agencia Brasil.

By last year, militias had taken control of 400 slums of the 965 included in the study versus 108 four years ago, researchers found.

In some cases, where there is no official police presence, militias have succeeded in forcing out drug traffickers and criminal gangs, taking over areas previously under their control.

It has led to turf wars between criminal gangs, leading to fears the situation is spiralling out of control.

Militias have not only increasingly taken control of the supply of gas canisters used by slum dwellers to fuel ovens in places that are among the most unlikely to be attended by utility companies, but also the selling and letting of properties in such areas.

“It’s a big business that can bring in even more than drug trafficking,” Zaluar underlined.

Having in place so called ‘police peace keeping units’ (UPPs) are just as important as promoting a spirit of trust between the police and the local communities, which fear ‘the shoot first, ask questions later’ approach adopted in many previous operations, Zaluar said.

“The way police see slum dwellers and how they see the police has to change. There has to be a relationship built on trust,” he added.

The report comes on the day police mount a massive search operation for those linked to militias operating in the western Campo Grande part of the city.

Last month, two weeks after the city was awarded the 2016 Olympic Games, two Brazilian policemen were killed after their helicopter crashed, having been shot at in clashes between Rio de Janeiro police and drug gangs.

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