From Brazil

with Vincent Bevins and guests

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Vincent Bevins √© colaborador do jornal brit√Ęnico 'Financial Times' e correspondente no Brasil do 'Los Angeles Times'. Escrito em ingl√™s, blog aborda principais acontecimentos do Brasil sob o olhar de um estrangeiro.

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Brazil 2012 – year in review

Por Vincent Bevins

This year, the country didn’t deliver on everything international observers thought the country had promised, but Brazil still remains one of the 21st century’s most remarkable success stories. 2013 could be decisive.

For those paying attention to Brazil headlines, 2012 was mostly a bad year. For some, it was enough to re-evaluate the status as an emerging power that the country has euphorically held for years now.

The economy barely grew, and government involvement in the economy has surprised some international investors. The ruling Worker’s Party was dragged through the mud repeatedly as the Supreme Court handed down sentence after sentence for a vote-buying scandal from Lula’s first term. The PCC returned to the scene in S√£o Paulo, and a small-scale war broke out between police and the gang. New laws dismayed environmentalists concerned for the Amazon.

But Brazil still remains one of the most remarkable success stories of the 21st century. This is true for a few simple reasons. 40 million people have risen out of poverty, and inequality has decreased. Despite the slowdown, unemployment is at record lows, and wages have continued to rise. Perhaps most importantly, we saw last week that President Dilma has an eye-popping 78 percent approval rating.

In short, the vast majority of the population support the way the country is being run, people are better off than ever, and society is more just.¬†It’s important to remember that this is the whole point of economic growth and democracy in the first place. The results are there. We shouldn’t confuse means with ends, as is so easy to do when we journalists get caught up in the latest GDP numbers, or scandal.

Even some of the the year’s worst stories have a positive¬†flip-side. As ugly as the corruption trial was, many believe that the tough sentences handed down to high-level politicians could signal an end to political impunity in the country. And despite the tragedy of a spike in violence in S√£o Paulo’s periphery, the state‚Äôs murder rate is still much lower than it was a few years ago.

When Brazilians and observers (justifiably) complain about the country at the moment, a little context can be uplifting. What has the world been going through for the last 12 years, especially since 2007? How many countries in the world can you point to with: rising standards of living, reduced inequality, and widespread, long-lasting contentment with leadership? This is certainly not how things feel in my native California, or in Europe.¬†And all of this in an open, liberal democracy? I can’t think of many examples.

But of course, nothing guarantees this will continue, and 2013 could be a decisive year. We can’t expect wages to rise forever without economic growth returning, and so the world will be holding their breath until it does, as expected next year. ¬†But if instead there is more stagnation, or more of what the international community sees as state meddling in the economy, international investors could finally give up and concentrate on countries like Mexico or Colombia. And it’s hard to imagine how the PT would be seen by the people if any of the party‚Äôs social gains were reversed.

I personally don’t think either of those doom scenarios will come to pass. We’ll see. But for now, here are some of the bad, the good, and the interesting stories from 2012.

These are summaries – click the links for more in-depth info.

The bad

Corruption –

We watched all year as high-level politician after high-level politician was brought down¬†for the ‘mensal√£o’ scandal from 2003, and a new hero of the opposition (and anti-corruption movements) was born in the form of Joaquim Barbosa (pictured above).

Violence –

War broke out for the first since 2006 in S√£o Paulo. Again, the major parties were the PCC, the state’s main gang, and the military police. The latter lost over 100 officers to (mostly) targeted executions, while the murder rate in SP jumped.

The economy –

This is the big one. After growing 7.5% in 2010 (and causing us in the international press to rush here), then slowing to 2.7% in 2011, we may not do much better than 1% in 2012. Even more awkward was the moment when Finance Minister Guido Mantega joined the rest of analysts in wildly overestimating third-quarter growth, leading The Economist to call for his dismissal. Needless to say, President Dilma was not pleased to hear this from the British magazine.

But the economy is expected to pick up in 2013, thanks not only in part to the huge cut in interest rates carried out this year, which have finally come down to the levels of a normal country. And in reality, the 7.5% growth year was a statistical blip after -0.3% in crisis-hit 2009. Taken together, the economy had been growing at 3.6% a year, close to the average over the last 20 years, and to what we’re likely to see over the next few years.

But more worrying is that some investors believe, whether rightly or wrongly, that the government has begun to micro-manage the economy and that the possibility of intervention may be unpredictable. Much of this has to do with the decision to lower energy prices. I personally think they’re wrong, or at least that this was a problem of the government’s way of communicating the changes rather than the changes themselves. But some people are on edge, and this is especially important, as a drop in investment is the real culprit for the bad numbers.

And of course, there remains so much that Brazil should and could do to increase productivity and upgrade its growth model.

Infrastructure –

We are still waiting on this one. This is one part of Brazil’s economy that most desperately needs to be resolved, and we’ve still only seen baby steps.

The environment –

My visit to the Amazon this year was not pretty, both because of the persistence of slave labor and the obvious destruction of the rain forest. Things took a turn for the depressing for environmental activists as the government rolled back protections in 2012.

The good

Politics –

Whatever you think of the ruling Worker’s Party (PT), it is undeniable that if you use the standard most often applied to political parties, Lula and Dilma‚Äôs have overseen a truly remarkable success story since 2003. Lula left office one of the most popular leaders in the world, and two years into her term, Dilma is already widely supported. 78 per cent approval is a breathtaking figure. And this after everything that happened in 2012.

Despite the mensal√£o mess, the PT did very well in municipal elections this year, and took back S√£o Paulo, South America’s largest city. If 2014 elections were held today, all polls indicate Dilma would win by a landslide.

And without a doubt, the country plays a much larger role on the world stage than it did in 2002.

The PT, like everyone else, could improve greatly, but widespread support and a rising nation means you are winning, big. This is a tough act to follow.

The real economy –

As I mentioned above, for all the dismal numbers, life on the ground still feels better than ever. Families are still rising out of poverty. The explanation for this is a little complicated, but the reality is there. It can’t last forever like this, of course, but forever hasn’t happened yet.

Justice –

The flip side to the mensal√£o mess is a justice system which really has teeth for the first time anyone can remember. This has always been the case for the poor, but now politicians can be on the hook, too. This has many hoping they will think twice in the future.

Even some police are being held to account. Some of those that gunned down suspected members of the PCC and, by all accounts, set off this year’s wave of violence, are now in jail.

World Cup preparations –

For years we wondered if Brazil would be ready to host the World Cup. We haven’t sorted out our infrastructure problems, but it looks like at least the stadiums will be ready.

My personal take is the following: The World Cup will go the way Brazil does for most visitors. Something or another will go wrong. They’ll be stuck in traffic, or miss a flight, or end up spending more than they expected on this or that. But those things will be heavily outweighed by the charm of the country and the fun of the event, and most will go home raving about Brazil.

Cost of living –

For us foreigners, it’s been good news that the¬†real¬†has come down significantly this year. Brazil is no longer so maddeningly expensive. For Brazilians, the cost of living hasn’t changed much.

Corinthians –

‚ÄúThe people‚Äôs team‚ÄĚ from S√£o Paulo took the world club championship, and gave Brazilian football a much-needed boost. This also meant lots of traffic and nonstop fireworks in the city, but overall it was very good for the country, and for South America.

The unexpected and interesting

Lula back on the scene –

I suppose it was more of an anomaly that he was actually gone for a while. But after recovering quickly from cancer, the former president was given a grand welcome back and got to work quickly, helping out in this year’s municipal elections. Crucially, he has so far floated above the mess of the mensalão scandal, and insisting he know nothing of the scheme. We’ll see if he can keep this up in 2013.

Music –

2012 was a much more interesting year musically than 2011, in my opinion. We saw the rise of Brazilian hip hop to the mainstream, ‚Äútechno brega‚ÄĚ from the Amazon in the form of Gaby Amarantos, and funky pop from the likes of Tulipa Ruiz. Here‚Äôs our full interview with Emicida, and Criolo‚Äôs will be posted next year.

Eike Batista –

He did not have a good year. There was the unfortunate incident with his son, Thor. Then he attracted lots of negative attention, and fell quite dramatically from his position as Brazil’s richest man.

Race –

Hard to categorize this one as good or bad, but the country stared two deep-seated problems in the face this year: relations with indigenous populations, and the government’s approach to black Brazilians.

Tourism –

The sector is doing quite well, but it has nothing to do with the gringos. The sector is almost entirely powered by Brazilians moving around their own country.

The rebirth of the center –

Long more famous for being “Crack land” than anything else, we saw interesting new movements coming up from the street.

Evangelical power –

Much to the dismay of bien-pensant liberals, Brazil’s numerous, and often unsettling, Evangelical Christian churches revealed themselves as an ever more potent political force.

Exhibitionist turn –

We saw Brazil’s sub-celebrity realitytainment industry power into the same bizarre gears we’ve been accustomed to around the world. First, there was the sex, or perhaps rape, transmitted live on Big Brother Brasil. Then we had the young girl who auctioned off her virginity for $800,000.

Petrobras – Gra√ßa Foster –

One of South America’s largest companies inherited a true rags-to-riches story as Graça Foster took over. Here’s hoping she can help navigate Petrobras out of its current mess.

Niemeyer –

And finally, we bid a sad farewell to nation-defining visionary architect Oscar Niemeyer, who passed at 104 years old. Here’s an interview I did with him last year, and perhaps next year I’ll post my pictures from his 104th birthday party.

Here’s hoping 2013 goes better. Happy New Year.


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