Brazil reopens for business

After electing a pro-business president who is committed to anti-corruption, Brazilians send a message to the world: “dear investors,  please come back”.

Concerns about Bolsonaro

Some concerns may arise, of course. Is this Bolsonaro guy a dictator? Will he turn Brazil into a populiste society? My short answer is: No and No. In fact, investors seems to have understood this better then the international press.

As Jean van de Walle’s explains in his blog, The Emerging Markets Investor, there is a disconnect between the Brazilian electorate and the “furious criticism” expressed by the foreign press. Walle points out that the high esteem which the international press still holds for former President Lula, despite the fact that he was convicted for corruption. The basic divergence can be explained by the almost exclusive focus of the foreign press on public persona. “Lula is remembered as an endearing and charismatic crusader for the poor, (… while) Bolsonaro is taken to task for a history or rude and politically incorrect statements on socially sensitive issues.”

The business community seems to have understood this better then the press. Some companies have already announced they will be investing in Brazil. The Brazilian stock exchange index Ibovespa is up.

Challenges ahead

Brazilian investment bank Itau’s report last week points out that Bolsonaro will face several challenges.  Legislative reforms will impact Brazil’s fiscal situation.

Staying on top of the opportunities

Companies targeting emerging markets can not forget that Brazil has a population of over 200 million. It is time to assess industry competitiveness and market segmentation. The goal is to combine performance, market perceptions, strategic analysis, growth potential and specific industry dynamics in Brazil.

These issues are the top of the iceberg. They are part of a study I prepared about the new investments opportunities in Brazil. I will be happy to talk about it.




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Turning Brazil into an agricultural powerhouse

The challenge of feeding a growing population was in the center of Malthus problem theory.  This large subject will be addressed by a panel during the World Economic History Congress in Boston. Our group will discuss the history of food production, processing and trade from a global perspective, focusing on the effective role of scientific and practical innovation in the availability of food on a large scale. I will present the Brazilian case with the paper Turning Brazil into an agricultural powerhouse with research and planning, 1970-2010.


Some members of the group and family during our pre-conference in Milan (from left to right) Silvia Conca, Benjamin Davison, Hildete Vodopives, Philip Dehne, Dominique Barjot, Christiane Cheneaux (and her husband), Fabrice Le Graet and Yves Tesson

The Brazilian innovation story

Brazil is the largest country in terms of arable land, with around 264 million hectares. Nevertheless, food production faced a number of constrains, poor productivity and difficult logistics.

The agriculture methods imported from the temperate regions of Europe were not adapted to the local climate. The problem escalated by the end of the 1960s, when a supply shortage forced the government to look for solutions. This paper looks into Brazil’s reorganization of the agriculture research system in the 1970s and, in particular, the Brazilian Agricultural Research Corporation, (Embrapa).

Founded by the Brazilian government in 1973, Embrapa radically changed food production in the country. In a 40-year period, Brazil overcame food shortage and became a leading international player. Embrapa’s agenda made innovation a priority, adapting products and production chain to the peculiarities of the Brazilian climate and soil. More recently, this State controlled organization, turned to international competitiveness and sustainability.

This research will be presented in the session The Struggle for Food: From Malthusian Tension to GMO and Beyond (19th-21st Centuries) Our panel takes place on Wednesday August 1rst, room 235 MIT building, Cambridge MA.

About the panel The Struggle for Food

Organiser: Silvia A. Conca Messina, ‘La Statale’ University of Milan, Italy,


Franco Amatori, Bocconi University, Italy,
Claudio Besana, Catholic University of Milan, Italy,
Silvia A. Conca Messina, ‘La Statale’ University of Milan, Italy,
Rita D’Errico, Roma Tre University, Italy,
Irina Potkina, Institute of Russian History RAS, Russia,
Dominique Barjot, Paris-Sorbonne University, France, Christiane Cheneaux, Paris-Sorbonne University, France,
Yves Tesson, Paris-Sorbonne University, France,
Hildete de Moraes Vodopives, Paris-Sorbonne University, France,  Rajkamal Singh Mann, Oxford Brookes University, UK, Tahar Abbou, University of Adrar, Algeria,
Phillip Dehne, St. Joseph’s College, New York, USA,
Benjamin Davison, University of Virginia, USA,

Paper Titles (Provisional)

Franco Amatori, From Malthusian tension to GMO

Claudio Besana, Silvia A. Conca Messina, Rita D’Errico, The Italian Food Preservation Industry since the 19th Century.

Irina Potkina, The formation of food industry in the Russian Empire in the 19th Century

Dominique Barjot, Scientific and practical innovation in the French Food Industries: the strategy of the Danone Group from the origins to today

Christiane Cheneaux, The nature of the famine and the” King law” in the Seine Department (19th Century)

Hildete de Moraes Vodopives, Turning Brazil into an agricultural powerhouse with research and planning, 1970-2010.

Rajkamal Singh Mann, Exploring the change in net-food status of countries in South Asia and South- Eastern Asia: 1961-2013

Phillip Dehne, Feeding hungry Europe after the First World War: American food, British transportation, German gold

Benjamin Davison, The Beef Economy and Malthusian Worries in Cold War America





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Brazilian presidential elections pressing question: what candidate will the “big-center”parties support?

Who will the “big-center” parties (DEM, PRB, PP, and SD) support? According to a report of ITAU BBA, it could be with he PSDB (pre-candidate Geraldo Alckmin) or PDT (pre-candidate Ciro Gomes). This is a sensitive decision because these parties have around 18% of the time available for TV  and radio campaign, starting August 31st onwards.

By the way, the first debate of pre-candidates took place July 4th in Brasilia at the Brazilian Confederation of Industries (CNI). Geraldo Alckmin (PSDB), Marina Silva (REDE), Jair Bolsonaro (PSL), Ciro Gomes (PDT), Henrique Meirelles (MDB) and Álvaro Dias (PODE) participated in the debate.

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Boeing and Embraer confirm talks for a potential merger

Wall Street Journal reported that Boeing is in discussions to take over Embraer, the Brazilian airframer. The deal would boost Boeing’s presence in the regional jet market.

For the moment, they confirm only that they are talking but there is no guarantee a transaction will result from these discussions.



An Embraer-Boeing deal will allow them to combine forces after Airbus announced plans to acquire a majority stake in the Bombardier CSeries programme. The Series is already at the center of trade disputes involving both the USA and Brazil with Canada.

Embraer was founded in 1969 by initiative of the Brazilian gouvernement, a military regime at the time. The company was later privatised and its stocks are now traded in São Paulo and New York

Stock Exchanges. In 2000, Embraer began exploring the executive aviation market, introducing the Legacy, built on the same platform of Embraer’s ERJ 135 regional jet.


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How young Brazilians hope to clean up politics

WITH his reversed baseball cap and facial fuzz, the style of 29-year-old Daniel José Oliveira (pictured) is hardly typical for a Brazilian politician. Nor is his background: he was one of 11 siblings brought up in a small town by a domestic servant and an office porter. After winning a scholarship to a Catholic school, he studied economics at a fine São Paulo campus. That led to a job at J.P. Morgan, a scholarship to study at Yale University and a job offer from another American investment firm.

But in 2015, with Brazil’s economy crashing and its politics mired in scandals, he instead came home. Inspired by En Marche!, the French liberal party which propelled Emmanuel Macron to the presidency, he hopes to be elected next October as a federal deputy for São Paulo state.

Until recently, politics was a turn-off for his generation. The average age of lower-house deputies elected in 2014 was 50, 19 years above the national mean. Brazil’s old-timers are discredited: after more than three years of the Lava Jato (car wash) corruption probe, 40% of congressmen are under investigation. Politicians are unloved. Just one voter in 20 admires them; only 3% approve of President Michel Temer.

Confidence in congress has been sagging for ages. In 2010 Tiririca (Grumpy), a professional clown, was elected to Brazil’s lower house under the slogan “It can’t get any worse.” It did. On December 6th he told his congressional colleagues he would not seek re-election in 2018. “Only eight of the 513 actually show up here,” he moaned. “I am one of those eight and I am a clown.”

Young Brazilians are fed up. “Four years ago someone like me running for congress would have made no sense,” says Mr Oliveira. But renewing Brazil’s congress will not be easy. Independent candidates are banned and parties are unwelcoming to newcomers. In some states seats stay in the hands of well-known families.

Dislodging them may get harder. In 2015, after a series of scandals, Brazil’s supreme court outlawed corporate campaign contributions. In October congress created a “special campaign-finance fund” for next year’s election. But the fund, and airtime, will be allocated in proportion to parties’ current representation. That frustrates newcomers. “Congress is like a cancer,” says Mr Oliveira. “It’s not working in the best interests of the body and it’s defending itself to survive.”

People are trying to find a cure. Mr Oliveira has applied to RenovaBR, a programme to support young Brazilians who want to run for congress. Financed by entrepreneurs, it offers 150 “scholars” courses on Brazil’s institutions plus advice on campaigning and policy. It has thousands of bidders for a half-year programme starting in January. Scholars will get a monthly stipend of 12,000 reais ($3,645).

They will be selected by written tests and interviews. They can belong to any party, but cannot hold extremist views. In return the scholars vow to complete their mandate, justify their voting decisions to their constituents and avoid hiring family as staff members. Eduardo Mufarej, who started the project, hopes to see at least 45 scholars elected.

Other groups are working to make congress more representative. Bancada Ativista (Activist Group) is a left-leaning outfit, formed to fight São Paulo’s city-council election in 2016. Rather than creating a party, it chose eight candidates from two established ones. Only one was a heterosexual white male. “By definition, a black woman is more representative than a white graduate from Harvard,” says Caio Tendolini, a 33-year-old member of the group. It arranged “speed-dating” events for candidates to meet voters and offered social-media training and public-policy contacts. It started working: the candidates drew a total of 75,000 votes and one got in. It will scale up its operation next October.

Agora! (Now!) was founded in 2016 to coax into politics young Brazilians who had shown leadership skills in other fields. Until now it has largely focused on developing policy ideas. “Politicians here think about getting elected first and then worry about their agenda…it should be the other way around,” says Marco Aurélio Marrafon, one of the group’s 150 members. Agora! has working groups on everything from health to homicide. It initially had no plans to run for congress, but “things are getting out of control”, says Ilona Szabó, a co-founder. Next year it plans to field 30 candidates for congress by persuading two parties, Partido Popular Socialista and Rede, to be vehicles. “We want to be a new political force,” says Ms Szabó.

October’s elections are perhaps the most important since democracy was restored in 1985 after 20 years of dictatorship. They are also unpredictable. Fewer Brazilians than ever identify with the old left-right model. Most want to try something new. That can favour extremists: Jair Bolsonaro, a congressman who says harsh things about gays and women, is second in the polls for the presidency. But it could also help moderate newcomers. Four out of five Brazilians say they want “ordinary citizens” to run for congress next year.

Their efforts may fail. New candidates fret about finances and some are already running low. Mr Oliveira used to help his parents out with the bills. Since deciding to run for office he has had to stop. With corporate donations banned, the candidates must rely on individual contributions, and no one knows how generous Brazilians will be. Lack of broadcast time will hurt.

“Next year might not be the tipping point,” warns Mr Oliveira. “But we have to open a trail. If not, there will be no hope of renewal in 2022.” Political renewal may not happen overnight. But Brazil’s Young Turks are making a start.


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Is Bolsonaro going to be President?

What do we think of Bolsonaro? Will he be positive or negative for Brazilian stocks, like Petrobras and Vale?


A radical from Rio Jair Bolsonaro hopes to be Brazil’s Donald Trump

Can a right-wing demagogue win next year’s election?


IN THE arrivals hall of Belém’s airport the excitement is palpable. Hundreds of supporters of Jair Bolsonaro, a seven-term congressman and would-be president, gather under the steady gaze of a squad of policemen. Some hold banners with Mr Bolsonaro’s campaign slogan: “Brazil above everything, God above everyone”. A few wear “Godfather” T-shirts, with his face in place of Marlon Brando’s. When the candidate finally emerges through sliding doors the crowd surges forward, straining for a glimpse. While bodyguards forge through the scrum, the crowd hoists Mr Bolsonaro aloft as if he were a homecoming hero.

The visit to Belém, the sweltering capital of the Amazonian state of Pará, is an early stop in Mr Bolsonaro’s campaign to win the presidential election due in October 2018. A religious nationalist and former army captain, he is anti-gay, pro-gun, and an apologist for dictators who tortured and killed Brazilians between 1964 and 1985. He rails against the political elite, whose venality has been exposed by the three-year Lava Jato (Car Wash) investigation.

His message resonates. If the election were held today, an eighth of Brazilians would vote for Mr Bolsonaro, according to Ibope, a pollster. In a crowded field, that would put him second to the former president, Luiz Inácio Lula da Silva, who has the backing of a third of the electorate. The two would face each other in a run-off.

Polls this early are unreliable and Mr Bolsonaro’s eighth of the electorate is hardly a groundswell. His appeal may well fade as the economy recovers from a recession and voters pay more attention to the election. But his second-place status says much about the turbulent mood among Brazilians. A choice between him and Lula, who has been convicted by a lower court of corruption, would be a grim one indeed. Lula is appealing against the verdict.

Telling it like it isn’t

Mr Bolsonaro, who represents Rio de Janeiro in congress, hopes to be a Brazilian Donald Trump. His rhetoric is even more indecorous. In 2016 Mr Bolsonaro dedicated his vote to impeach Dilma Rousseff, then Brazil’s president, to the dictatorship’s chief torturer, Carlos Alberto Brilhante Ustra. (Ms Rousseff herself, once a member of an urban guerrilla group, had been tortured by the military regime.) In 2014 he told a congresswoman he wouldn’t rape her “because you don’t deserve it”.

Mr Bolsonaro, whose middle name is Messias (Messiah), talks little about what he would do as president, apart from restoring law and order. He admitted in a recent interview with Bloomberg to a “superficial understanding” of economics. He holds some mainstream views, such as favouring gradual reform of the ruinously expensive pension system. Less conventional is his wish to loosen gun-control laws, restrict Chinese investment in Brazil and cosy up to Mr Trump. He opposes gay marriage (legal since 2013) and adoption by gay parents. “His political instincts are to radicalise rather than moderate,” says Paulo Sotero of the Brazil Institute at the Woodrow Wilson Centre in Washington.

Public opinion is becoming more militant, too. The influence of social conservatism appears to be growing. In September Santander, a bank, abruptly closed an exhibition of “queer art” in Porto Alegre in southern Brazil, which included a painting that showed someone having sex with an animal. Campaigners said it promoted blasphemy and bestiality. Around a thousand people joined a “Christian march for Brazil” on October 16th in São Paulo. Some held banners that called for the military to take over the country. Mr Bolsonaro, who was baptised in the Jordan river last year, will attract support from evangelicals. They make up a fifth of the population, according to the census taken in 2010; three decades before, they were one in 15.

Anger about the economy, crime and corruption will add to Mr Bolsonaro’s support. Despite a recent pickup in economic growth, the unemployment rate is still high at 12.4% and poverty is increasing. The murder rate is rising. Michel Temer, the current president, survives in office only because congress has twice rejected appeals by prosecutors to put him on trial for corruption. His approval rating is a risible 3%. Just 13% of Brazilians think democracy works well; a third would back another coup. Nearly 60% want a president from outside one of the three biggest parties.

Mr Bolsonaro has belonged to seven during his 26-year congressional career. He is now a member of the Christian Social Party, which has just 11 of the 513 seats in the lower house. He pays a price: public money for campaigns and time on television and radio are distributed according to parties’ share of seats in congress. But money has become less important since recent reforms capped campaign spending and prohibited corporate donations. Mr Bolsonaro boasts that he will spend just 1m reais ($310,000) on his campaign (in 2014 Ms Rousseff spent 300 times as much).

He is betting on social media. He has 4.8m followers on Facebook, more than any other Brazilian politician, and posts several videos a day, many of which are viewed by more than 1m people. His campaign is well organised. In Belém it deployed women to deal with any female protesters who might show up; sending men to confront them might have produced ugly press coverage.

“Bolsonaro is the only honest candidate we have,” explains Bárbara Lima, a 27-year-old volunteer. “There is no proof that he is racist or homophobic.” Older supporters remember the military dictatorship fondly. “My childhood was one of the happiest times of my life. I had liberty, security and health,” recalls Tom Meneses. “Then the socialists came to power.”

Despite fury and nostalgia, the odds are against Mr Bolsonaro becoming president. A third of Brazilians rule out voting for him in the first round. As the economy improves, fewer may gamble on a radical presidency. The two-round electoral system makes it hard for extremists to win; in a run-off, the moderate majority rallies to the more mainstream contender.

The only candidate with higher rejection rates than Mr Bolsonaro is Lula, but he may be not be able to run if a higher court upholds his conviction. His disqualification would make things still more difficult for the Rio radical. Even so, Mr Bolsonaro’s strong early showing is a warning sign. Centrists must prove that they are better equipped than extremists to repair the damage politicians have done.

This article appeared in the The Americas section of the print edition under the headline “He’s not the Messiah. He’s a very naughty boy”


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Brazilian currency boosted by lower inflation in the U.S.


While domestic turbulences remain, the Brazilian currency experiences a relief thanks to an external factor. Itau-BBA’s report indicates that emerging market currencies were favoured by lower-than-estimated inflation in the U.S. According to the Brazilian investment bank, the good news about inflation should delay the U.S. Federal Reserve’s decision to hike the benchmark interest rate before year-end.

In Brazil, inflows’ outlook is also on a positive trend.  The exchange rate closed the week at 3.15 reais per dollar, appreciating 0.3% and performing in line with its peers. Brazilian Central Bank’s stock of FX swaps is currently $24 billion.The currency flow maintains the positive trend. Although foreign flows to the stock market are negative by $807 million during the month.

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