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 Downtown Veranópolis, in the Southern Rio Grande do Sul state People don’t live in countries or states – they live in cities. Ultimately, it’s the local government, infrastructure and cultural services that define one’s quality of life. And quality of life in Brazilian cities is changing quickly, according to a study just released by IBGE (the main national statistics bureau). For the first time in ten years, IBGE raised information from 5,565 local governments to draw the profile the country’s municipalities.
Overall, they seem to be offering more sports and cultural opportunities, but they still have to improve their policies concerning the environment, minorities and human rights.
The report’s main conclusions:
- Bookstores can be found in only 28% of Brazilian cities (it was 35.5% in 1999). Apparently, book sales remain similar, because readers prefer to acquire them through the internet or in supermarkets. Also, the number of video rental stores is getting smaller, after many years of growth. Today, they can be found in almost 70% of Brazilian cities, but they are losing their costumers to cable TV and the internet.
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 Don’t miss this opportunity: great Brazilian artists, journalists, scientists, businessmen and philosophers speak their minds in the new TED conference series produced in São Paulo.
Some highlights (for the versions with English subtitles, click on their names and make sure the CC button, that turns on the captions, is on):
- Regina Casé is the comedian who founded Asdrúbal Trouxe o Trombone troupe in the seventies, then gave life to memorable characters of the comedy show TV Pirata, in the eighties. In 1989, she met researcher Hermano Vianna and this led to a turning point in her career. Together, they created a group of studies and professional partnerships that caused her to shift the focus of her work from art to anthropology. This partnership gave way to Brazil Legal, Muvuca, and Central da Periferia, among other projects that bring to the little screen the realities of the country.
- Fabio Barbosa, president of the Santander Group Brazil and my former boss, one of the leaders of the debate about corporate responsibility and sustainability in the country. A brilliant man with a very advanced vision. Since 2000, he developed a strategy at Banco Real (that now belongs to Santander) that includes offering lines of credit for companies that wish to comply with environmental standards and cutting companies that harm the environment off its client list (I was part of the team in charge of these cuts). The plan became the object of a study at Harvard University. Keep reading
by Regina Scharf
Brazil is well positioned to achieve the Millennium Goals – the eight development objectives that the United Nations member states are supposed to attain till 2015. The federal government just released the fourth annual report detailing the country’s progress and the results are definitely encouraging.
Among its main conclusions (to make this easier on your brain, green indicates good news; orange, neutral. No item was fully bad, according to the report):
Goal 1: Eradicate extreme poverty and hunger
Around 25.6% of the Brazilian population lived on less than $1 a day in 1990. The target for 2015 is 12.8%, but this number was down to 4.8% in 2008.
In 1996, 4.2% of the children were underweight. The target for 2015 is 2.1%, but the most recent statistics (2006) indicate that hunger is now affecting 1.8% of this population.
Goal 2: Achieve universal primary education
- Around 95% of the Brazilian kids between 7 and 14 years old are enrolled in schools.
Goal 3: Promote gender equality and empower women
- For every 100 boys studying, there are 93.8 girls (in primary education) and 133.2 (in secondary education).
Goal 4: Reduce child mortality
- In 1990, there were 53.7 deaths of children under five per thousand babies born alive. In 2008, this number was down to 22.8. The 2015 target is 17.9.
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 Neither Giselle, nor destitute homeless. A new portrait of Brazilian women emerges from a series of studies released in the last few days. She studies and works hard, both at home and professionally, earns less than her male counterparts and has an increasing importance in the country’s economy.
According to Instituto de Pesquisa Econômica Aplicada (Ipea), a federal think-tank, the International Labour Organization and Serasa Experian consultants, Brazilian women:
- Study more – 56.8% of 15 to 17-year-old girls were in school in 2008 (at the grades expected for their age), while only 44.4% of boys were studying. A similar proportion can be observed among young adults, according to Ipea : 15.7% of women and 11.8% men between 18 e 24 were in college two years ago.
- Do most of the housework – Really, no surprise here. According to Ipea, women dedicate, in average, 23.9 weekly hours to cooking and cleaning their own houses, while men spend 9.7 hours on those chores.
- A high percentage has bad jobs – In 2008, 42.1% of working women are paid either low or no salaries, or have informal jobs (no vacations, no job stability, no paid retirement). In contrast, only 26.2% of men work under those conditions. In fact, these numbers hide some good news. Things are getting a little better. In 1998, 48.3% of women and 31.2% of men had jobs this insecure. Keep reading
 From the Chrystal Ball series:
The Brazilian Ministry of Science and Technology released today a study that outlines how the country and the planet will (probably) evolve in the next 20 years. Produced by the Centro de Gestão e Estudos Estratégicos, the document offers a time line based on several sources. It is meant to help government plan its future strategies.
Part of its content is easily predictable, considering recent tendencies. But there are some surprises.
Among its main forecasts:
Economy
- In four years, Brazil will go back to its tradition of successive commercial balance deficits
- Brazilian Gross Domestic Product will be 925 billion dollars in 2015 (which means, less than our present GDP, around 1.6 trillion dollars. It is not very clear how Goldman Sachs, the original source of this information, came up with this number)
- Brazil, the brand, will increase its value. The demand for products associated to the country’s cultural diversity will grow
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A study released today by BNDES, the main federal bank responsible for financing infrastructure projects, reveals that Brazil will increase its investments in power dams, highways, railways, ports, telecommunications and sanitation. According to daily paper Folha de S. Paulo, around R$ 274 billion (151 billion dollars or 111 billion euros) should be invested between 2010 and 2013, 37.3% more than the volume spent between 2005 and 2008. BNDES didn’t publicize the investments made last year, during the global financial crisis.
These resources will finance such projects as the rocket train that should connect Rio and São Paulo at a cost of R$ 34.6 billion (19.1 billion dollars or 14 billion euros) in the next ten years. It should also finance the hydro power dams of Santo Antonio and Jirau (6.4 gigawatts combined capacity), that are already under construction in Rondônia state, in the Amazon region, close to Bolívia, and the controversial Belo Monte power dam, in the state of Pará, also in the Amazon. With an estimated capacity of 11.3 gigawatts, Belo Monte is meant to be the second biggest hydro power plant in the country, after Itaipu, in the Southern state of Paraná. This project has been dragging for over 30 years due to the many environmental and social issues it raises, and the fierce opposition of environmentalists, indigenous leaders and singer/composer Sting. Its costs are estimated in R$ 16 billion (8.8 billion dollars or 6.5 billion euros) – but here, again there is controversy. Many Brazilian entrepreneurs have already indicated that this forecast is too conservative at it will probably cost twice as much.
A worker that earns the average Brazilian salary would need to work 40 minutes in São Paulo and 51 minutes in Rio to buy a Big Mac. In contrast, an average New Yorker would have to work mere 14 minutes to buy McDonald’s bestselling sandwich. The so-called Big Mac Index is only one of the instruments used by the Swiss bank UBS to illustrate the fluctuations of the purchasing power in several parts of the world.
São Paulo and Rio are, indeed, pricey cities. The disproportion is the same for other products. To buy 1 kilo of rice, for instance, you have to work 12 minutes in São Paulo, 15 in Rio and 8 in New York.
Still according to UBS – that systematically compares the cost of life in 73 cities – São Paulo got the 45th position and Rio the 48th in the last survey. This means they are more expensive than Prague, Bangkok, Beijing or Moscow. Naturally, there are fluctuations depending on the product or service you look at. Even if renting an apartment is expensive in Brazilian metropolis it cannot be compared to the exorbitant NY rentals. This explains why New York appears in the UBS study as the 6th most expensive metropolis.
Thomas Berner, an American economist that works for UBS on this study, says prices have been growing consistently in Rio and São Paulo in the last 10 years. The price of the products and service that the bank uses as a reference became aproximately135% more expensive in reais, the national currency, between 2000 and 2009. Berner was interviewed by G1, a website related to Globo, the main Brazilian news network. G1 chose the Honda Civic to illustrate this. The car costs around 15,000 dollars in the United States and 65,000 reais (35,000 dollars) in Brazil.
Once the average income didn’t grow proportionally, you have to work many more hours to keep buying the same. Consequence: the average paulistano may consume less than half what a New Yorker can purchase.
What is your experience? Do you find you find your purchasing power lower in Brazil?
 From useful to futile, numbers that help explaining the country.
- 43% of adults that live in state capitals are overweight.
- Those who have access to the internet spent 2.8 days connected in the month of September.
- 9% of the kids born in 2008 were not registered.
- 473 million reais ( 256.6 million dollars or 184.5 million euros) were collected by the government of the city of São Paulo thanks to driving and parking tickets. 99% of the Brazilian cities have budgets lower than that.
- 57% of the inhabitants of the city of São Paulo would like to move away (Is this related to the previous number? Maybe).
- Brazil is the 88th country in the education ranking produced by Unesco. Paraguay and Bolivia are in better shape.
- 1 in 5 Brazilians that have a formal job works for the public service.
- President Lula spent 87 days abroad in 2009 – a personal record.
- 9 in 10 Brazilians have a cell phone.
- 500 million reais (271.3 million dollars or 195 million euros) will be spent to fix up Maracanã stadium, in Rio, for the 2014 World Soccer Cup.
- The Brazilian delegation to the UN Climate Summit in Copenhagen last December had 743 members. It was three times bigger than the American delegation.
- 1819 houses and buildings at Brazilian roadsides have been used for child prostitution. It’s one every 27 kilometers.
Source: recent editions of Veja magazine
 Investment U, a newsletter of a an investment consultants group, released a few days ago a small report about the health of Brazilian Economy to allure their clients into this market. I don’t know their work or credentials, but this report offers a nice summary of what’s going on.
Yes, it is optimistic and, yes, I am sure you will find other specialists that would disagree with their analysis. After all, If you have two economists in a desert island, you will for sure have at least three conflicting opinions. But this could be a good starting point for those beginning to explore Brazilian investments.
Basically, Investment U points out that there is a solid economy foundation:
“~ Commodities: Brazil holds a strong position in commodities like sugar, iron ore, soybeans, orange juice, pulp, paper, and now even oil.
~ Structural Reforms: The country has worked diligently towards structural reforms in recent years – and through improved fiscal and monetary policies, it’s achieved a noticeable improvement. That includes…
- Lowering inflation.
- Reducing net debt to 40% of GDP.
- Paying off its International Monetary Fund loans.
- Aggressively boosting its foreign reserves to $200 billion.
- Achieving an investment grade rating for its debt.
~ A Stricter Central Bank: Brazil’s central bank has moved toward more conservative policies. Among them…
- The current interest rate is 8.75% – a full 4% above the 4.5% inflation rate.
- Brazil’s banks are required to keep 30% of all deposits with the central bank, plus capital reserves of at least 11% of total assets, when most financials outside the country maintain capital ratios of 16% or more
~ Increased Energy Independence: For decades, Brazil has worked hard to boost its energy independence – a strategy that is now paying off big-time. Not only did the nation become self-sufficient in oil last year, it also discovered the world’s largest oil and gas reserves in decades. This improves its chances of becoming a major oil exporter, given that Brazil already derives much of its own electricity from hydro energy and powers many of its cars with sugar cane ethanol.”
The article also points out that:
- much of the country’s growth comes from within, guaranteeing its independence. “A mere 13% of its growth comes from foreign trade, which largely consists of commodity exports to China“, it says.
- “it was the last Latin American country to enter economic recession… but the first to exit from it. Not only that, the country has emerged from the global downturn in better shape than many other countries and estimates call for GDP growth to fall between 4.5% and 5% this year”.
- “In terms of the job market, Brazil has more than made up for the 800,000 jobs it lost during the economic crisis by adding one million jobs over the past six months”.
- “Brazil’s middle-class is growing, too – a trend that is significantly aiding growth. Between 2001 and 2007, Brazil’s poorest 10% enjoyed a 49% jump in real income. And with half of Brazil’s 200 million population now considered “middle class,” credit card purchases have jumped by 22% a year over the past decade. Auto sales hit a record high of 300,000 in June 2009″.
All these facts are not a secret to those that follow the Brazilian market, but it is always refreshing to see this sort of information delivered in such a clear summary.
Since the first day of the year, the Brazilian minimum wage is 510 reais (the equivalent of 283 dollars or 201 euros). Why 510 and not 500 or 520? Is this enough for a minimally descent life?
Today I got a fascinating (and simple) explanation on how the government might have come up with this number from Brazilian blog Vida Depois dos 50. It quotes Pasquim, a satirical newspaper from Rio that fought conservatism and dictatorship in the 70s. The guys of Pasquim found some forty years ago the formula that explained (tragicomically) how the value of the minimum wage was established. A formula that is still valid today. According to Pasquim, at that time:
- one cafézinho ( a shot of coffee, no milk) cost 0.12 cruzeiro (the currency in the rocking seventies)
- one pão francês (the little bread Brazilians have for breakfast) was 0.04 cruzeiro
- If you had the combination of one cafézinho and one pãozinho four times a day, your minimal needs would have been met
- One family had in average four people
- One month has 30 days.
So: 30 X 4 X 4 X (0.12+0.04) = 76.80 cruzeiros = minimum wage
In other words: a family of four needed this amount to pay for this diet for one month. And that was exactly the value of the minimum monthly salary at the time.
Are you still with me?
Well, Vida Depois dos 50 updated this calculation. Today:
- one cafézinho is 0.75 real
- one pão francês is 0.30 real
- The other factors remain the same.
So: 30 X 4 X 4 X (0.75 + 0.30) = 504 reais, which is practically identical to the value of the minimum wage today.
How fascinating is that? If you keep that diet, don’t pay rent, don’t use any type of transportation, don’t send your kids to school, don’t ever have leisure, Brazilian minimal wage is perfect for you!
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