Rio Gringa

Brazil In The Year Ahead

The big story making headlines as we get closer to 2013 is that of Brazil's slowing economy. While that will continue to be an ongoing issue to watch, here are a number of other things to keep your eye on in the year ahead.

Issues to Watch: Brazil

• Oil and gas. With the first oil concessions in five years due to take place in 2013, this is the industry to watch next year. But the ongoing royalties fight in Brasilia isn't over yet, and the royalties law could end up in the Supreme Court again if Congress overturns Dilma's partial veto.
• Brazil's new middle class. As one of the most compelling tales of Brazil's growth, this group is the one to watch--especially to see if it can be sustained or grow amid sluggish GDP growth and rising consumer debt.
• Airport and port privatizations. Travelers eagerly await airport upgrades; businesses hope for more efficient ports. The process could be long, but there should be movement in this area next year, especially after the recent announcement that Rio and Belo Horizonte's international airports will also be privatized.
• Construction and housing. In spite of slower growth, this is an area that continues to chug along. FipeZap estimated that real estate prices rose by nearly 14 percent this year and doubled within the last 3 years. The government also hopes to use this sector to boost growth, and the subsidized housing program Minha Casa, Minha Vida is full speed ahead.
• BNDES. Brazil's development bank lent nearly $60 billion through November of this year and could lend up to $73 billion by the end of 2012. Keep an eye on where BNDES is spending, particularly the Brazilian multinationals and major domestic projects, like the controversial Belo Monte hydroelectric plant.
• Government corruption. Will the mensalão defendants actually go to jail? Will Dilma continue to show no mercy for those accused of wrongdoing? Will new transparency laws help uncover new scandals?

Issues to Watch: Rio

• UPPs. Violence has flared up in several of the city's "pacified" favelas, and most of the on-duty military police that died this year died in UPP favelas. Keep an eye on how current UPP favelas are faring in terms of security, as well as plans for new UPPs in other favelas.
• Transportation construction. The bus rapid transit system is underway and operating in a section of the city, with four new stations inaugurated last week. Four more stations are due to open in January with ongoing construction throughout the city. But getting the system online isn't the only challenge; people keep getting hit and killed by the BRT and many have complained about overcrowding. Expanding Rio's metro system is also underway with a price tag of $3.6 billion.
• Militias. The government has focused much of its security strategy on combatting drug traffickers and bringing a permanent police presence to favelas. Will it finally turn the heat up on the city's paramilitary groups?
• Favela removals. Forced evictions from favelas to make way for mega-event construction and urban renewal have stirred controversy on an international scale. Keep an eye out for how these removals play out.
• Mega-event preparations. From stadium construction to training programs, this is an ongoing area to watch. Maracanã Stadium renovations are due to conclude by the end of February, likely over budget. Maracanã is also due to be privatized next year, so keep an eye out for who wins the prize.

People to Watch

• Guido Mantega: Will he hang on as finance minister? If an Economist article won't be his downfall, could more disappointing growth numbers be the final straw? Or will he stay on until the bitter end?
• Joaquim Barbosa: The new president of the Supreme Court became something of a national hero for his hard-line approach during the mensalão trial. But he also decided against immediate imprisonment for those convicted in the trial. Beyond the mensalão, keep an eye on Barbosa and major STF trials next year.
• Lula: The heat recently turned up again from mensalão accusations, though it seems likely he'll remain unscathed for now. But with presidential elections in 2014, will he decide to become a candidate or let Dilma run for reelection?
• Eduardo Campos: The governor of Pernambuco looks like a likely presidential candidate in 2014. Watch for campaign announcements next year.
• Marco Antonio Raupp: Brazil's minister of science, technology, and innovation could be the spokesperson for some of the government's most interesting new initiatives. In November, he announced the launch of Start-Up Brasil, a $40 million project aimed at Brazilian startup companies.

People to Follow

• Brazil's economy - Luciano Sobral, the Drunkeynesian
• Brazil's new middle class - Renato Meirelles of Data Popular
• Brazil tech news and startups - TNW's Anna Heim
• Government transparency - Observing Brazil's Greg Michener
• Everything Rio - RioReal Blog's Julia Michaels
• Rio mega-event preparations, favela removals - Christopher Gaffney of Hunting White Elephants

Muito Além do Peso

With a bigger economy and a growing middle class, Brazil is facing new public health challenges, including an obesity epidemic. A documentary released in Brazil last month called Way Beyond Weight delves into children's obesity in Brazil, an increasingly worrying issue given that around a third of Brazilian kids are overweight. Some of the themes mirror the same issues in the United States--which has had a longer obesity epidemic--ranging from fast food advertising aimed at kids to children unable to identify basic produce.

The film also reveals other staggering statistics, like the fact that an estimated 56 of Brazilian babies under the age of 1 drink soda. There's even a scene showing a mother bottle-feeding a baby with soda.

It also delves into the growing presence of junk food and fast food companies in Brazil and how they target children. One scene even shows a Nestlé boat arriving in sparsely populated areas of the Amazon; these boats carry tons of cookies to this region. One of the producers noted that while they were filming, he met an indigenous chief who gave tips for making Ramen noodles.

Child obesity in Brazil isn't limited by social class, and the film aims to show children across the socioeconomic spectrum throughout the country. In a few scenes, the movie shows kids unable to identify vegetables.

Brazil's obesity epidemic still hasn't received enough attention domestically, so the film is a good start to put this issue on the policy radar.

To watch more clips from the movie, click here.

Consumption in Brazil: What's Really Going On?

With Brazil due to grow by only 1 percent this year, one of the big questions is how the economy will affect the average Brazilian and consumption, if at all. In reality, this is an ongoing debate, especially one that's been hashed out in the foreign press. Brazil has been growing slower for the past two years, so what does that mean on the micro level for consumers? In a country where an estimated 80 percent of the GDP is linked to consumption, it's an important question.

If you just read about the economy slowing, you might think things look pretty grim. The country's third quarter growth numbers literally surprised economists it was so low--half of what they expected. Dollar flows are way down: $22.16 billion so far this year compared to $66.98 billion during the same period last year. Exports have decreased, imports are up. Demand for consumer credit dropped 7.6 percent last month. Requests for U.S. visas were down 29 percent in São Paulo and 64 percent in Recife last month compared to November 2011. A December CNI/Ibope survey found that 60 percent of Brazilians plan to reduce consumption due to fears about the economy, while 41 percent report that they're in debt. (Hat tip to Dow Jones Brazil bureau chief Matthew Cowley who posted all of these numbers on Twitter recently.) The IMF estimated that 23 percent of disposable household income in Brazil is spent on paying off debt--which is much more than in neighboring Latin American countries.

On the other hand, consumption seems to be humming along. The same CNI/Ibope study found that 63 percent of Brazilians plan to buy at least one durable good (like a car or refrigerator), a home, or go on vacation through the end of the year. Cars, computers, and construction materials were the items with the highest demand. The survey also found that 28 percent of Brazilians saw their family income rise in the last 12 months.

In August, Vincent Bevins wrote a piece for the LA Times in which he explained the "great conundrum" of an economic slowdown that didn't seem to be having much of an impact on many consumers:

The boom in demand for services helps to explain the paradox of low unemployment and low growth, analysts say. Although the industrial manufacturing sector has been suffering because of the high cost of Brazilian exports, local service businesses such as hair salons, restaurants and even banks are relatively labor-intensive, and have been buoyed — for now, at least — by freely spending Brazilians.

And that still seems to be the case. Unemployment is at an all-time low and is still falling. Real wages are rising--they rose an average of 2.5 percent last quarter, and for those without a carteira assinada (papers to work in the formal job market), they rose by 5.8 percent. Family consumption rose by 3.4 percent last quarter in comparison to the same period last year.

So like many things in Brazil, things are more complex than they might initially seem. But it looks like consumers aren't deeply affected by the slowdown, at least for now.

Political Correctness and Free Speech in Brazil

A new documentary offers a glimpse into two issues in conflict with one another that have been simmering recently in Brazil: the growing calls for political correctness along with questions about what constitutes free speech. One area where these two issues have stood out is in the world of Brazilian comedy, which the documentary examines.

The world of Brazilian humor is largely male-dominated (though that's changing), meaning that a lot of popular, mainstream comedy--such as TV and websites--has a lot of machista, homophobic jokes. With growing feminist and LGBT rights advocacy in Brazil, comedians are sometimes coming under fire for targeting women and gays. To a lesser extent, there's also emerging criticism of racism in comedy.

Part of the reason the documentary is compelling stems from the fact that you really can appreciate both sides of the political correctness debate. On one hand, you can understand why in some cases, people shouldn't take humor so seriously--it's a joke, after all. You can also see how those in favor of political correctness can sound a bit annoying, which I found surprising, since two of the activists featured in the film (LGBT activist and Congressman Jean Wyllys and feminist writer Lola Aronovich) are seasoned, compelling advocates. On the other hand, you can also understand why it's important to change the ways people think and promote tolerance, since humor not only reveals societal prejudices, but can help promote them. This is pertinent when it comes to homophobia, for example, since Brazil reportedly has the largest number of gay hate crime murders in the world.

Director Pedro Arantes told TRIP that it's possible to enjoy humor without feeling guilty:

"[Y]ou're going to laugh at something at some point and later on you're not going to find it funny anymore. Some things you didn't find funny before, you'll later find funny. That's one of the goals of the film. It's not to make anyone feel guilty because he laughed at something. When I was younger, I laughed a lot at gay jokes. Now, having thought about it, I really don't find those jokes funny anymore. You work through it in your head and from then on you don't find it funny anymore. The idea of the movie is to show this: guys, it's ok. We laugh and that's part of life. But we have to think things through. Guilt is a torturous feeling. You don't need to make yourself feel guilty--you just need to reflect."

The movie looks at how humor can reveal problems with limiting free speech. Comedian Rafinha Bastos has had this happen numerous times. After making a horribly tasteless joke about rape last year, he was asked to testify before prosecutors for "inciting rape." (As the movie shows, the incident also spurred a productive conversation about rape in Brazil.) He was sued by a famous singer after making a similarly tasteless joke about her baby, and the singer won in January. Pending appeals, Bastos will have to pay the singer R$100,000 (around $47,000). Just this week, he was involved in a new scandal, after Bastos called TV personality Luciano Huck an "inconsequential playboy" in an open letter. Huck was recently fined and lost his license after refusing a breathalyzer at a traffic stop. Huck said he would sue Bastos for making the comments, though Bastos has since apologized.

The film also explores how Brazilian comedy often reveals racism, homophobia, and sexism. In Brazil, hate speech is actually a crime: making disparaging remarks about religion, ethnicity, or race can actually lead to fines and even jail time. (Some LGBT activists are pushing for hate speech related to sexual orientation to be included in such laws.) But these laws restricting freedom of expression don't necessarily change attitudes, as Taylor Barnes describes in a recent Christian Science Monitor piece about hate speech crimes in Brazil:

Despite a constitutional principle of freedom of expression, Brazilian lawmakers and law enforcement have drawn the line when it comes to agitating racial, religious, or ethnic tensions. And though the legislation is widely accepted as legitimate, even advocates of criminalizing intolerance say the best the law can do is make an offender hold his or her tongue, rather than change the racial and religious tensions that still run deep in Brazilian society.

In a country where social movements are increasingly gaining traction, where dictatorship-era censorship legislation still lingers, and where rising levels of access to education and technology are helping to forge change, the debate to balance free speech and political correctness will be an interesting one to watch.

Hat tip to Alex Castro for the documentary.