Wednesday, November 13, 2013

Brazil: What Changes, What Stays the Same


A brief for fans of Brazil and NSA spooks.

Last June, upon my arrival in France, I wrote a blog article on what had changed for the better and what hadn’t. To my disappointment, the list of notable improvements was much shorter than that of status quos. I have since moved back to Brazil and must sadly report that the same is true here. Positive changes are few and far between! My inspiration dried up as a result of this depressing situation. I am aware that it is an overwhelming challenge to keep my friends captivated by my blog, let alone the eavesdroppers of the National Security Agency (NSA). If Angela and Dilma’s emails and phone conversations are of prime interest to President Obama, they are not of the kind of material that would hook the thirty-something-busybodies who makes the rank and file of the NSA. Hopefully these rapacious readers will find titillating tidbits in this text, ditto fans of Brazil.

One positive change took place in June when millions of Brazilians of all age, income and skin color took to the street to voice their anger at their government’s lavish expenses and politicians’ corrupt and selfish life style. The crowd called for changes. Tax payers’ money was flowing to big events such as the 2014 Soccer World Cup and the 2016 Rio de Janeiro Olympic Games, as well as lining the pockets of a large number of politicians and officials at the expenses of education, health care and basic social services. For decades, ordinary Brazilians have put up with these excesses, their tax money (and rates are amongst the highest in the world) going into white elephants and mega-projects of no social benefits. Not surprisingly, Brasilia the capital enjoys the highest GDP per capita in the country.

Brazil is soccer mad. It is therefore astonishing that this frustration exploded at the occasion of a soccer championship which as a matter of fact was won by the home team.

The government’s binge hit a raw nerve with people who pay taxes through the nose and get little in return in terms of social services. Middle class Brazilian have to buy expensive health insurance and their children must attend private schools. Brazil is an expensive country, and its indecently high taxes further increase the cost of living. Food stuff carry sale taxes well above 15%, even Brazilian staples are not spared: Coffee 20%, water 38%, black beans 17%, soccer shoes 46%, shaving cream 57%, bikini 33%, and caipirinha the national drink a whopping 77%! Obviously these taxes hurt the poor more than the rich, so the government has set up Bolsa familia to help the former. It is a modest cash transfer with some strings attached: the family must send its children to public school and have them routinely medically checked. Smart trick, the government gives with one hand what it takes with the other. The recipients of Bolsa familia are grateful and form a trusted electoral clientele for Dilma’s party.

Dilma’s government was shell shocked by the street protests and the political elite in Brasilia took fright. Hasty promises were made, some wrongs were corrected, and many legislators pledged to play by the book. This was June, now in November it seems that nothing has happened as little has changed. The only noticeable and controversial change is the import of 4500 foreign medical doctors to be shipped to remote rural communities and urban slums, locations shunned by Brazilian doctors. The majority of the doctors are coming from Cuba. Exporting doctors has been a lucrative business for Cuba. It has been reported that the Brazilian deal will allow the Castro Jr. government to pocket nearly US$ 3500 per doctor! A much better deal than exporting cigars.

Rio de Janeiro is also changing, right now for the worse. The city is a mammoth construction site with little to see over ground as the action seems to take place underground. In the Leblon suburb where this blogger lives, every day there is less space to walk and drive as streets are dung out by heavy machinery for the future subway tunnels. All this construction pandemonium is supposed to be finished before the Olympic Games in June 2016. As construction is already behind schedule, few bet that Rio will be ready. Catching up and cutting corners the Brazilian way will probably kick in next year. For the tax payer it is a toxic mix of over budgeted sloppy work, and kick back.

For next year Soccer World Cup, some are more ready than others. If many stadiums are still being built or refurbished, the prostitutes of the state Minas Gerais are ready for business. They will be able to charge their customers’ credit cards. They have signed a deal with the government bank CAIXA (best known for offering mortgage loans to the lower middle class).

This is good news for motels. In Brazil, motels are love hotels which rent rooms by the hour. Because they are falling out of fashion with young lovers their rates have fallen nearly 9% in a year. For a country which reports a 6% inflation rate, it is a notable drop. Many motels are being reincarnated into tourist hotels which are much in demand and which for the period of the World Cup will seek to maximize their investment return.

Like the motel business, Brazil’s economy has slowed down. Additionally, the country’s self-confidence took a beating when its flamboyant and over confident billionaire Elke Batista filed for bankruptcy protection in October. Batista managed to loose US33 b in 16 months. His oil-and-gas business was based on over-optimistic forecast of oil reserves, and it crumbled when the reserves were re-assessed downward. As the Rio golden boy, he accumulated expensive toys, which are being let go at bargain prices. Too bad, his yacht Pink Fleet which used to cruise in the bay of Rio didn’t find a buyer. It has been sent to the scrap yard. Let’s hope that his Ferrari and Mercedes have a more dignified fate.

Finally there is a change which is regarded as positive for making one’s life simpler: money at the touch of a finger. My bank has adapted its automated teller machines (ATM) with fingerprint sensors. No more senior moment at the ATM when one forgets his or her PIN code. As a senior citizen, I already miss the stimulation of remembering my access code. This technology is touted as more secured and convenient, but this being Brazil one still runs the risk of being mugged at the door of the bank. Et plus ├ža change and more they stay the same.

Dear NSA agent, thank you for taking interest in my writings. I feel so valued and so much safer.