Brazil demonstrations lead to further spending promises

What does the government need to do to bring the wave of demonstrations to a halt? Spray cash at the problem seems to be the answer. That would cause further problems with Brazil facing a rapidly deteriorating financial situation and great investor resistance to funding new projects. Maybe then it is lucky that many spending promises are likely to remain on the paper.

Compromises on the cost of transport have already been made and president Dilma Rousseff has made a range of promises covering healthcare and education. A programme to import doctors from abroad -  many are already slated to come from Cuba - is likely to be stepped up and promises that oil revenues will be dedicated exclusively to education have been reinforced. The government can ill afford such largesse with a surging current account deficit of $6.48bn in May alone.

The saving grace is likely to be Brazil's natural resistance to change. Doctors unions are already up in arms about the import of medics, and insistent that doctors should be accredited by the national regulator and speak Portuguese. States continue to bicker about the destination of oil revenues with each of them wantinga slice of the pie. Most of the promises then amount to little more than that. Sadly, that is all Brazil can afford right now. The days of liberality are behind it.

About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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