Brazil media calls for unity on World Cup

Fuleco, the World Cup's official mascot has not yet
 conquered the national fans, producers of toys said
they are targeting international tourists

It's finally happening. The World Cup starts today after 7 years of (not very good) planning, discussions and protests. In the past year, particularly, the World Cup helped Brazil show its true face to the world. The "football nation" is now an angry emerging middle class nation, that claims for more quality in the public services. It's also a stable democracy nation, which went through massive protests without a single change in its institutions. It is still a struggling nation, that suffers to put investments in due course, but it is learning.

No, we are not the skyrocketing Christ statue The Economist showed back in 2009. In fact in today's Folha de S. Paulo edition, Vinicius Torres Freire, an economics columnist, calls attention to the possibility of a technical recession (two quarters of decrease in the economic activity) in the first half of this year.

But we are not that bad. The fact the country managed to go through the protests maintaining its institutions should not pass unseen. Unlike any other emerging country with recent upheavals (Turkey, Thailand or Egypt, just to name a few) Brazil's democracy has not been questioned by the protests.

The truth (or at least the close we can get to it) lies as usually in the middle. Brazil is a country which is just learning how to invest -- as states another Folha's article, signed by Marceo Miterhof. After decades of crisis and after addressing the more pressing issues of inflation, economic stability and income distribution, the country has just started to focus its attention on the infrastructure problems. Differently than the last big investment decade of the 1970's this time the investments came under the democratic regime with all its checks and balances. It's been a tough learning.

This is why today the Folha's balance of the World Cup infrastructure legacy showed that little over 50% of the 167 planned improvements were completed in time for the games. The rest was either abandoned or postponed to after the games.

As Folha's editorial states today, it's time to bring attention to the event itself and to support the national team. This does not mean forgetting all the criticism, it means remembering the positive aspects that the event also has. I don't think anybody in Brazil believed the World Cup would bring an end to all of the country's problems. It actually contributed to expose the naked reality of a country that has improved recently but still has a long way to go.

As I already mentioned here, I believe the games will occur without any major problem. The main strikes of metro workers and homeless in São Paulo were controlled in the last minute, just in time for the event. It's the Brazilian way, always finding a solution at the last moment.

I'm also curious on what will be the political result of the games. So far, it seems the World Cup has backfired for the Worker's Party. But who knows what can happen after the World Cup nationalist marketing flood. The latest presidential poll published last wednesday showed that for the first time Dilma lost the upper hand when compared to the sum of her two main adversaries. A second round in the elections is now more likely than ever.

Dilma's popularity falls, stock market goes up

Last week Dilma's popularity fell considerably. The percentage of people that evaluate positively her government dropped from 43% to 36% during the first quarter of the year. The survey news were picked up by the major newspapers in the country, namely O Globo and Folha de S. Paulo. Latter both newspapers said the slip in the president's approval (that means Dilma's reelection is under threat) was welcomed by the market, given the valuation of the national currency and the positive closure of the São Paulo stock exchange.

Stories about the 50 years of the military coup d'etat continued to be featured in the media. This monday, Dilma Rousseff, herself a victim of torture during the militar dictatorship period, defended the amnesty law (that basically prevented the conviction of military personnel involved in the dictatorship crimes, and was being questioned by the Bar in Brazil). Her past as a leftist militant is a trump she is likely to use again during the campaign. In her speech she addressed the two former presidents both also opponents from the dictatorship: Fernando Henrique Cardoso, whom she called an exiled, and Lula, whom she called a union leader. 

"I don't deserve to be raped", photos like
this were on social media to fight sexism

Dilma also used the internet on monday to address a victim of today's Brazil reminiscent conservatives, the journalist Nana Queiroz, that started last week a social media movement to raise awareness to a survey that showed 65% of Brazilian people believe a woman that has been raped deserved to be so either because she behaved or dressed inappropriately. Nana took a picture naked from the waste up, covering her breasts with a poster saying: I don't deserve to be raped. The campaign went viral, with several women adhering, and taking similar pictures. The problem was that Nana received several threats both from men and women, and decided to remove her page from Facebook. Using her Twitter, Dilma said Nana deserve respect and solidarity.

If in the dictatorship's speech and in the latter social media manifestations Dilma did good, the president's performance on the economic front continues to disappoint. The latest forecasts for inflation, featured in Folha de S. Paulo this Tuesday shows a 40% chance of the price index finishing the year above its 6,5% ceiling. It would be the first time this would happen since 2003, and a very bad sign for a government looking to win back the market. O Globo also featured another Achilles' heel of Dilma, the investigation over corruption in Petrobras, the big oil state company. The preliminary investigations from the company showed no sign of corruption in one of the two cases, the dutch platform supplier SBM bribe to Petrobras employees. 

Dilma is still ahead in election poll

Even with all the protests, president Dilma would be elected in the first round of the presidential elections this year, according to the latest survey from Datafolha published this sunday. Dilma ranks first with 43% to 47% of the votes in different scenarios with different competitors, making more than the sum of all the other candidates for president. The result points to a stable perspective from the last evaluation of Dilma electoral performance and according to Folha analysis means that it is Dilma that should run as a candidate for PT (the Worker's Party) and not former president Lula. This was received as good news to the government because it shows that president Dilma's popularity recovered from the past results on october lat year when her vote intention was in 42%.

Dilma will face the challenge of keeping the economy
growing while avoiding inflation

In spite of the good numbers, Dilma still has some challenges ahead. Her negative evaluation went up from the previous survey, showing that her current popularity might fall in the future. The risks with the economy downturn (with the current strategy from the Central Bank to reduce the economic growth in order to control inflation) and the possible negative impacts of protests in the World Cup may force a second round of the elections in the end of October.

Former president Fernando Henrique Cardoso, from the social democrat party (PSDB), the biggest rival of PT, bets against Dilma in an interview published this weekend in El País Brasil, given to my former  boss Carla Jimenez and to Luis Prados. Cardoso makes an interesting diagnosis of the current state of affairs in Brazil: PT has lost the momentum to carry on the reforms when the country faced a window of opportunity -- as a matter of fact, the government never saw it as a window of opportunity but rather as a permanent state that, as we all know, already passed. He says, though, that if it was not the case that the country was as good as international investors thought it was in the past, it is not as bad as they think now. He claims we need a better positioning in Latin American politics (which now has an all new economic bloc: the Pacific Alliance) and expects the current dissatisfaction now common in the middle class and businessmen will be also passed on to the greater part of the population as the campaign goes on.

Protests
Enough with politics. Now back to the protests. This weekend a new set of protests against the World Cup and now the new wave of hikes in the bus tariff (that should happen in all major capitals by the end of the year) has again ended in violence. This time the controversial attitudes came out of São Paulo police and its new "ninja force"(policemen that know their ways in martial arts, and carry no guns) when they started to arrest and remove protesters based only in suspicions -- this was criticized by some lawyers because it would go against Brazilian Constitution that only allows police to act based on facts. Five journalists were taken down by these same policemen, carried out of the protests and later let go when the Police chief found out they were working to cover the protests. Among them was my former O Globo colleague and friend, Sergio Roxo. Interesting enough, as Roxo wrote in O Globo, the the protest in São Paulo ended with 6 injured people, among them 4 cops, one of which broke his arm while trying to immobilize a protester.

Press versus Black Blocs

Since the protests started on june 2013, the press has been a target of some of the revolted young people. Last week, after the journalist from TV Bandeirantes, Santiago Andrade, died on consequence of a firework explosion detonated by one of the Black Bloc protesters, this confront was more than evident. On one side we had still some of the same voices (that supported the violence of Black Blocs from the beginning) trying to downsize the meaning of the death, at the same time we had somewhat an overreaction on part of the media.

Before going further on this issue it is necessary to clarify somethings. The press has always been in the radar of leftist movement's critic in Brazil. And it is not without any reason: part of Brazilian press supported the military cup of 1964 (namely through the work of a liberal journalist called Carlos Lacerda, that latter turned against the regime) and a greater part just omitted the critic to the regime in order to keep running. Globo Television is seeing as a member of the later, especially after they called a immense manifestation for the direct presidential election as a commemoration of the city of São Paulo's anniversary. 

This is on the roots of the anger against the media. At almost all the manifestations and protests I covered at some point I could hear protesters shouting: "Fora Rede Globo, o povo não é bobo"(something like "Go away Globo Network, people are not stupid"). Not surprisingly protesters attacked reporters from day one, but maybe because the violence coming from the police was bigger (with a photographer losing the vision of one of his eyes due to a rubber bullet), the press focused its attention to the violence from the police. Latter, namely in Rio, O Globo started covering more closely the actions of Black Blocks that managed to remove the multitudes of protesters from the streets through their violence (the phrase if from a musical producer from Rio, I just borrowed). 

This week main TV news shows devoted a lot of time to give a proper dimension of Santiago's death, and ask for Justice (16 minutes in Jornal Nacional, of Globo TV, and 15 minutes in the Jornal da Band, of the Bandeirantes television, where Santiago worked). The two young Black Blocs responsible for the death were quickly arrested, in Brasilia, deputies were quick in drafting laws against protests, from an intelligent one that typifies the crime of disorder (allowing the police to actually remove people with rocks and dangerous behaviors from the protests, something they couldn't do due to a gap in legislation) to extremely dangerous ones, such as the one that relates protests to terrorist activity. 

That's not part of the overreaction, yet. For me, the overreaction came with the attempt of putting the decentralized group of the Black Blocs as part of a leftist movement aimed to create chaos on the verge of the World Cup. Newspapers quickly assumed, basing on vague an unconfirmed declarations, that the Black Blocs were connected to PSOL (a leftist party, that is very active in the protests) and quickly connected them with a Rio deputy, Marcelo Freixo.

The press steps back
Today, on their sunday edition, both Folha de S. Paulo, and part of O Globo, acknowledge part of the overreaction, which is a good thing. Folha devotes a full page to understand the movements behind the protests, and differentiate leftist, anarchist and other independent social movements from the Black Blocs. Folha also ran a survey in Rio that shows that more than 70% of the people still supports the protests, event almost 100% (I believe 98% or so) are against any act of violence from protesters and the police. Stories about the need to train better the police also were published during the week, which is also aiming to the correct direction.

The impression I get, looking from a big distance, is that finally the Black Bloc has lost its momentum. The group seduced part of young people that don't see any chance of manifesting themselves in the country's democracy, as correctly pointed out Vladimir Safatle, on Globo News this week. It is not the case that the country has no means of participating, we actually have a lot of institutionalized ways of participating, but they are opaque to the vast majority of the population. In the roots of this problem is the traditional lack of political participation among the whole population and the huge disbelief in the political parties (a disbelief that is more or less occurring also in developed countries). 

Some ponderations

Ramona Rodriguez, cuban doctor asked for
political refuge in Brazil this week

There are two things that upset me about the media and social media coverage in Brazil. On the one hand, mainstream media often is too critical and lacks a bit of context on the government decision. This, on the other hand, leads people on social media to call the whole media conservatives and fuel protesters to physically harm journalist (as this week was seen with the TV Bandeirantes cameraman hit by a bomb).

Over the past two weeks I've seen examples on both sides of this sort of thing. Two weeks ago, TV show Manhattan Connection interviewed Luiza Trajano, owner of one of the biggest store chains in Brazil, Magazine Luiza. One of the journalists, Diogo Mainardi, speaking directly from Italy where he now lives, was saying Ms. Trajano that her sector was living a crisis. She repeatedly said that was not the case, but he insisted and then she showed him the actual numbers, that were showing an increase in sales at the end of last year. 

The stress of negative points on Business journalism is something the Brazilian press does more often than we think. This is why the Central Bank disregarded the press criticism when it first cut down the interest rates. At that time it was the right thing to do, and it worked. Maybe if the press weren't so over critic, the government would listen to it more often, and maybe it would avoid the current stagflation we are facing. 

The other example occurred this week. When a great set of bad news for the government rightfully gained the newspapers. Let’s start from the beginning. A blackout (I believe the third of its kind), reached most of the country on Tuesday followed by the request for political refugee from a Cuban doctor, part of the government program (one of the many inspired by Hugo Chávez, due to its political profits in terms of votes) Mais Médicos (more doctors), and the arrest of Henrique Pizzolato, former executive of Banco do Brazil and member of the Workers Party in Italy. Immediately, bloggers and government supporters went out to say that the blackout was an isolated event (it always is), that the cuban doctor is just one among 7,400 others who are doing their jobs and so on.  It's sad to see that the same flaws are repeating, and that apparently they are not seen as a problem to some supporters of the government. 

This pretty much resumes the events of the past two weeks, I wish I could have written in more depth of all of them, but time is short in this year. Hopefully from now on the weekly posting will continue. 

"Rolezinho" and the Maranhão prison massacre

Warning in Iguatemi Shopping in a high class
neighborhood: protesters will bi fined 

The past week was a reminder of the immense inequalities existent still in Brazil -- despite the recent advances in income distribution and the low unemployment in the country. In São Paulo the "rolezinhos" -- Facebook events that started being created last december by periphery teenagers set to take place in big shopping centers intended to protest, create chaos and some level of theft -- aroused a reaction from the companies. After some discussion whether it would be legal to oppress the protesters, finally the main shopping centers were granted a justice injunction that allowed them to make a security check in every visitor and also the police to curb the events and fine in 10,000 Brazilian reals whoever is joining the movement. 

In the periphery slang "rolezinho" could be translated as a small hang out, which is ironic since one of the first rolezinhos gathered more than 6 thousand people in the Itaquera Shopping in the east zone of São Paulo. For me, this phenomenon is really interesting as it points out that social media is becoming a sort of political arm also for youngsters from the periphery, and not only the middle class. 

A worst reminder of how deep and critical is the current situation occurred on tuesdeay, when Folha de S. Paulo website published a video in which  three prisoners were decapitated (the scenes are extremely violent) int the Pedrinhas prison, located in the  Maranhão state, North of Brazil. Since december, 62 prisoners were killed in the institution, mainly in protests concerning the overpopulation of the prison. 

This instantly opened up a discussion about Brazil's prison system. The federal government immediately launched a plan to move prisoners and try to revert the crisis.  This also poses a doubts  about the future alliances for the election since Maranhão is basically a feud from the Sarney family (José Sarney, a former Brazil's president,  is a senator from the neighbor Amapá State and his daughter, Roseana Sarney is currently Maranhão's governor) and José Sarney is the main leader of the biggest situation party, PMDB.We are still about to see what will come out of this.  

2014 predictions and expectations

This year is definitely a big year for Brazil. The country will host the World Cup after 54 years, there is a presidential election coming and a lot of expectations on whether the last year protests are going to repeat or not. I wouldn't say there is a turmoil or volatile environment in the country right now. I'd put it more like a feeling that people are longing for change.

There is surely a notion now widespread that the country lost a lot of opportunities in attracting foreign investment when it was abundant and when Brazil was Latin America's darling. This feeling was long ago vented by more orthodox economists when president Dilma begun to fight the high interest rates. A fight which she has been defeated last year.

Now it seems that the pessimism is a consensus. We should not grow in 2014 more than the expected 2.3% that we should achieve in 2013. The government expenditures are likely to rise in an election year, bringing together the inflation rates. The reforms and changes long needed to attract investment and improve the education, judicial, political and health care systems will be once again delayed and we will be left with more and more demands for the next president or the next Dilma Rousseff's term in power.

The forecasts aren't necessarily gloom but neither they are exciting. It seems the country is running on auto pilot. I believe former president Fernando Henrique Cardoso, in an article for O Globo, captured the right needs for the country right now. It is mandatory that we increase productivity, that we establish new and strategic free trade treaties with countries that are recovering economically, such as the United States, and struggle to maintain Brazil's importance over South America. The Worker's Party ideology played a major role, says Cardoso, in delaying this pragmatic move towards market integration and foreign investment attraction.

I agree with that in general. Brazil is likely to be stuck in the current level of development and income if it doesn't invest in education and improve the tools for private investment. Ideology has been the worst enemy of our economic policy the last few years, this is true. There are somethings, though, that deserve consideration and contextualization.

Personally I believe that the Worker's Party experience through Lula's two consecutive terms as a president gave the impression that the government lost the chance to grow bigger, and to increase the national power of Brazilian companies. The main point at the time was the sense that during the crisis, the country bended once again to the financial markets (mostly responsible for the crisis itself) and increased the interest rates was the wrong move. I heard more than once from economists to politicians that the country, back in 2008, had lost a window of opportunity to slice interest rates to international levels.

This certainly changed with Dilma. The president aimed straight to the interest rates and had the feeling she won the battle. In 2011, the first year of decreases, inflation was kept down, and the financial system survived. There wasn't a huge increase in the families debt and the economy kept running. But when inflation eventually came, the government refused to take a step back and allow for a spike in interest rates. It rather took a different, non-conventional, path, decreasing taxes for specific sectors. This was the first "hubris" mistake I would say Dilma has learned the hardest way last year.

Another thing that changed during Dilma's office was the privatization. Since the privatization of state companies during the Fernando Henrique Cardoso term, there were a lot of opposition against the private initiative in Brazil. This is not at all unjustified. The first auctions of public goods privileged the price the companies would pay for the government instead of the price they would charge their customers for their services. This created a lot of aversion to this model of administration as winning companies charged higher fares for their services. Under the Lula's government some roads were auctioned following the exact opposite model (privileging customer's fares rather than the government prize) but this also had the inconvenience of making it difficult for companies to fulfill their investment commitments (specially under Brazilian bureaucracy) and was also rejected as a model.

Dilma had then the mission to change the model, offering the best of the two worlds: a fair price for the users of the conceded services and the guarantee that the investments were to be made. The word privatization was never again used, after Cardoso's term, and was substituted for concession, which should mean that the government would still have a regulating power and would be ultimately the owner of the public good. A lot of discussion was made on the return that the market required for the investments (considered in the beginning to high on the part of the government and too low on the part of the market). Another topic was the know-how requirement for the companies that would take part on the auctions. After first big airport concession in São Paulo, Brasília and Belo Horizonte, where some of the winners didn't have a lot of experience with busy and huge airports the rules of auctions were also changed.

Making a long story short, all of this contributed for the delays on the auctions. While there were some unpredictable things (considering that the government was also learning from the process), the ideology played also a major role here. If the government had been less tough in her first concern that private companies were demanding too much return for their investment, perhaps the auctions would have occurred during a time Brazil was still attracting foreign investment. The long discussion and the indefinition made the country fold when it had the best hand.

Both the notion that inflation should be a higher concern than low interest rates at all costs, and that there is a serious need to make the private concessions happen are in the speech of Ministry of the Presidential Chief of Staff, Minister Gleisi Hoffmann today on an interview to Folha de S. Paulo.

What to expect, then, from this very busy year? I believe there will be some building up of the Brazilian stock markets (though this is more a hope than a prediction) after the tragedy of 2013 and hopefully the World Cup will happen without major problems, but not without protests (there is a big one already scheduled for january 25th, called "No World Cup"). The doubt is over the presidential election and the next year. If the elections were today, Dilma would win. The big question in this case would be whether she would be committed more to an ideological administration than to the pragmatism that I believe is needed right now for the country.

The latest election survey from Datafolha

It seems that after a major setback from the bad economic news to the protests, president Dilma's popularity is on the rise again. The latest survey from Datafolha, a research company of the newspaper Folha de S. Paulo, shows that the president would be successful among any candidate that is considered today. Dilma scores from 41% to 47% of the total votes' intentions. This means that she would defeat almost all of their opponents in the first round of the presidential elections with the exception of Marina Silva, that is currently being accounted most as a vice-president candidate for the Eduardo Campos candidacy.

Behind this more favorable scene are some recent change on the news, that were more optimists on later weeks. Finally the government concessions got out of the paper, with the airports and the first road segment (of BR-163)  being delivered to the private initiative. The inflation also seemed to be under control, with the market predictions falling down on the beginning of the week and the Central Bank raising interest rates to 10%, on another sign that the economic policy is searching for more credibility. 

In this scenario, the government authorized an increase of 2% on the gasoline prices by Petrobras, that was suffering with cash flow problems since it had to import the fuel with a higher price than consumers in Brazil pay for it. It is still not enough for the company's needs, market analysts said, but it is a sign that things are changing. 

Last but not least, the recent news that the statistics bureau IGBE is revising last year's growth from 0.9% to 1.5% also contributed to the change of humor this week. Let's hope that the country keeps on this track for the next year.