Monthly Archives: January 2014

Brazil

This will be my last scheduled post on Latin America for a while. I am shifting my gaze towards Asia where most of the action of my second book, Chita Quest, takes place. In passing I want to mention that Venezuelan President Maduro continues his search for a scapegoat for his country’s economic woes. Today he launched an attack on the national television stations, saying that the telenovellas so dear to the hearts of Venezuelans were eroding the country’s moral fiber.  No mention was made of his destructive economic policies.

Brazil. Roughly the same size as the continental United States, Brazil has a population of some 200 million people, about half of whom are classified as middle class.

A few decades ago, Brazil did some smart things and conquered hyperinflation. For more than twenty years, Brazil’s economy sizzled, reducing poverty by two thirds and virtually creating a huge middle class. Then government largess inflated the public debt with a large public sector and the accompanying large pension requirements. The increased bureaucracy had to justify its existence so spun out all sorts of business-unfriendly regulations. The tax system became byzantine and taxes soared. Infrastructure issues were not addressed. For example, air travel has doubled in the past two decades but airports have not kept pace—something that will bite the country in the butt during the upcoming FIFA World Cup this summer followed by the Summer Olympics in 2016. Productivity has suffered. Unit costs have doubled due to raising the minimum wage—in dollar terms, they have tripled, making it difficult to export manufactured goods. The education system is terrible—most spending is on university-level schools. The internal transportation system is shaky. And there are still millions of really poor people dragging down the social services.

The discovery of tremendous deep-water offshore oil reserves could bail Brazil out if managed properly. Already politicians are screaming to increase spending on social programs. Brazil needs to refocus public spending on infrastructure, education, public health and to reduce its tax structure. The question is whether Brazil will follow in the footsteps of Norway and, to a lesser extent, the U.K., or will it fritter away its oil opportunity like Mexico.

I used to fly to the Bolivian city of Puerto Suarez on business with the Bolivian Air Force. Puerto Suarez is right on the border with Brazil. We would stay in Corumba, Brazil where the food was wonderful and the night life extraordinary. John Grisham captured the essence of rural Brazil in his novel The Testament. Brazilians are fun-loving and semi-crazy. Great people and lots of fun to be around. I hope Brazil works out its problems and regains its economic momentum.

http://topics.nytimes.com/top/news/international/countriesandterritories/brazil/

As always, here’s a different view from across the pond. Amazing how stories involving World Cup preparations dominate the British press…just sayin’…http://www.telegraph.co.uk/news/worldnews/southamerica/brazil/

For those of you who prefer their news delivered via video, here is a brilliant discussion the state of the economy and future opportunities from The Economist magazine:

http://www.economist.com/blogs/americasview/2013/09/special-report-brazil#

http://www.nytimes.com/2013/12/30/world/americas/brazil-forging-economic-ties-with-cuba-while-hiring-its-doctors.html?_r=0

The CIA World Book points out that brazil is the fifth largest country in the world and borders every country in South America except Ecuador and Chile. http://www.google.com/search?client=safari&rls=en&q=CIA+world+book+brazil&ie=UTF-8&oe=UTF-8

Edward Snowden has made quite a splash in Brazil. He has recently requested asylum there. The Brazilian president is particularly incensed at his revelations. Don’t be surprised if he ends up in Brazil, a major improvement to living conditions and life style–compared to chilly Russia.

http://www.nytimes.com/2013/12/18/world/americas/snowden-offers-to-help-brazil-in-nsa-inquiry.html

Here’s the latest summary of the preparations for the World Cup:

http://www.csmonitor.com/World/Americas/Latin-America-Monitor/2014/0121/World-Cup-prep-or-welfare-help-Sao-Paulo-razes-centrally-located-shantytown

http://www.miamiherald.com/2014/01/10/3863470/brazil-has-long-way-to-go-before.html

Here is an update about the situation with the creaky Brazilian air traffic system:

http://online.wsj.com/news/articles/SB10001424052702304732804579425360166993226

Many of you probably remember this disaster last November when a crane collapsed onto a stadium being built for the World Cup.

http://latino.foxnews.com/latino/sports/2013/11/30/sao-paulo-stadium-collapse-only-one-problem-in-brazil-world-cup-construction/

For more news about the Brazilian sports scene, try

http://www.foxnews.com/topics/brazil.htm

And just for grins, here’s a recent Op-Ed on the economies of the BRIC countries vis-à-vis the United States which paints a brighter picture for the U.S. and a bleaker one for the BRICs.

http://www.washingtonpost.com/opinions/david-ignatius-an-emerging-market-problem/2014/01/22/173a984c-82f3-11e3-bbe5-6a2a3141e3a9_story.html?hpid=z3

 

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Latin America continued–El Salvador

I had not planned on writing about El Salvador since I have only passed through the airport one time. But an opinion piece by the El Salvadoran ambassador to the United States in the Christian Science Monitor this morning caught my eye. I thought I would do a bit of research then comment on the article.

First, some background:

Here is a good overview, courtesy of the BBC.

http://www.bbc.co.uk/news/world-latin-america-19401932

El Salvador contains more than twenty active volcanoes which cause all sorts of misery in this Massachusetts-sized country.

http://www.bbc.co.uk/news/world-latin-america-25566450

Here’s a synopsis of recent stories and details from the New York Times, InfoPlease and, of course, the all-encompassing CIA Factbook. Please note that El Salvador is the only country in Central America with no outlet to the Caribbean/Atlantic, exports electricity, is a drug transshipment point, and is a refiner of petroleum products which it then exports:

http://topics.nytimes.com/top/news/international/countriesandterritories/elsalvador/

http://www.infoplease.com/country/el-salvador.html?pageno=1

https://www.cia.gov/library/publications/the-world-factbook/geos/es.html

Ambassador Zamora lays out the problem of gang-related violence, then proceeds to propose his opinion of what needs to be done in a country that was until recently one of the murder capitals in the world. In a nutshell, he says that past attempts to curb violence have been military and police hard-line crackdowns which are violent in themselves.

As the above articles have pointed out for you, violence in El Salvador has been greatly reduced recently due primarily to a truce with the gangs– not a continuing war with the gangs.

He sees the need for a regional approach which would, of course, involve the United States. Here is where I see some difficulty for the good ambassador. The United States government has, in my not-so-humble opinion, dealt with drugs with the same hard-line military and police approach rather than attempt to attack the reasons people use drugs. Trying to ameliorate the miserable conditions in the barrios/ghettos/ public housing blocks and youth-marginalization in our respective countries seem a more positive way of dealing with drugs, the drug trade and the associated drug-related crime. This would better benefit our citizens instead of filling prisons and shooting people.

See what you think. Is there a lesson to be learned for the United States?

http://www.csmonitor.com/Commentary/Opinion/2013/1220/How-US-can-join-El-Salvador-in-combating-international-gangs