You cannot stay one day in Brazil without hearing someone complain about high taxes and poor public services. According to this narrative, the prices of everything from cars to beauty products are inflated by opaque taxes even as the nation struggles with sub-standard hospitals, inadequate public transport and other services.
Now a study from a consulting company, Brazilian Institute of Planning and Taxation (IBPT), seems to bear out the common perception about Brazil’s tax burden. It ranked Brazil last in a list of the 30 countries judged by taxation versus quality of services.
Brazilian President Dilma Rousseff, under siege over late preparations for the soccer World Cup that starts in June, at last has something to celebrate.
The first of a series of major infrastructure programmes promised to the Brazilian public as part of the tournament has finally been inaugurated – or at least “the first phase of the first phase” of the project. On Wednesday, Ms Rousseff presided over the opening of a new terminal at the international airport in the capital, Brasília.
Back in January, at what I had hoped was the height of São Paulo’s unusually intense summer heatwave this year, I went out to buy an electric fan. My first four stores had sold out. The fifth was down to its last item. Later, reading the newspapers, it became apparent that this was happening across South America’s largest metropolis.
The heat is one thing. More worrying is that this year it has not been accompanied by the usual late afternoon thunder storms. The result is a water shortage so severe that São Paulo’s main reservoir, the Cantareira System, is full to just 15 per cent of its capacity, its lowest level since records began.
The Arena das Dunas World Cup stadium in Natal, in northeast Brazil shimmers in the late afternoon sun. It looks a bit like a giant silver-plated armadillo or, as one local put it, like a spaceship that’s crash-landed in the middle of the city.
President Dilma Rousseff stopped off here this week, en route to the World Economic Forum in Davos, for the stadium’s inauguration. It has come in on budget, according to the government, at around R$400m, so Rousseff was keen to big it up.
The Brazilian economy may be slowing but that isn’t deterring foreign investors from piling in.
The voracious appetite to invest in Latin America’s largest economy was underscored by the success of Brazil’s airport auction on Friday.
Who says sewage treatment can’t be a sweet smelling business?
Certainly not Singapore’s GIC. The city state’s sovereign wealth fund has just struck a deal to invest R$300m ($135m) in Aegea Saneamento e Participações, the water and sewage treatment arm of Grupo Equipav, the Brazilian conglomerate.
“Aegea manages an attractive portfolio of water and sewage concessions in Brazil. We are delighted to have Equipav and IFC as our partners and look forward to working with the shareholders and management to help grow the company,” said Tay Lim Hock, president of GIC Special Investments, in a statement on Tuesday.
No one likes Mondays but the government of President Dilma Rousseff will be waking up to the new week with an especially unpleasant headache.
An auction late on Friday of two key toll roads, meant to be a landmark for the country’s nearly R$1,000bn infrastructure programme, did not go so well. That’s bad news for a government that has less than 14 months to prove that it is serious about an issue that was meant to be its raison d’être – lifting Brazil’s lagging rates of investment.
By Nick Robinson of Aberdeen Asset Management
In 365 days’ time the first match of the Fifa World Cup 2014 will be played at the Itaquerão stadium in São Paulo.
Brazil will be hoping to emulate, if not better, both the feel good factor and the legacy left by the 2012 London Olympics. In the immediate aftermath of the games, the UK was propelled out of recession with GDP growth of 0.9 per cent.
One of my first memories of using mobile phones in Brazil was making calls from the top of a mango tree.
This was in the 1990s, a time when cellphones were still relatively rare. And during holidays on the family farm in the middle of the country, that mango tree was the best place to find reception.
Roads in Brazil (top) and India. A fair comparison?
Rankings from the World Economic Forum show Brazil as lagging far behind the Brics countries on almost every aspect of infrastructure – the subject of a beyondbrics Chart of the Week. Er … excuse me? I beg to differ.
Brazil’s infrastructure is poor, even dismal in some cases, but this is more relative to its own needs and its income level as a country with a per capita income level among the Brics second only to Russia. At least in my experience, it is not bad in absolute terms when compared with many other developing countries, particularly those in the poorer parts of Asia, such as India.
It is coming to a town near you – the great Brazilian infrastructure roadshow. Kicked off this week by Finance Minister Guido Mantega in New York, the roadshow aims to raise US$235bn for much-needed bridge, road, railway, port, power plant and airport construction in Latin America’s biggest country.
Brazil’s problems with infrastructure are hardly news. The rise of a new lower middle class numbering more than 100m people is one source of the country’s recent economic miracle. But it has also led to crowded highways and packed flights. Last year, demand for flights increased 7.14 per cent, according to airlines, while the number of seats available rose less than half that.
Brazil’s government knows that if there is a silver bullet to solve the country’s mounting transport infrastructure problem, it is rail. That is why it is pushing with increasing determination a proposal to build not just one but possibly several bullet trains in the country.
President Dilma Rousseff encouraged markets last year when she decided to invite private sector investors to participate in the overhaul of the nation’s airports.
There was further applause when she announced subsequent infrastructure packages offering companies the chance to participate in concessions to build and operate highways, railways and airports.
Well, they thought it was going to be bad. But not this bad. Consumer price inflation in Brazil was 0.88 per cent in the month to mid-January and 6.02 per cent over the previous 12 months, the IBGE, the national statistics institute, said on Wednesday.
On Monday, the central bank’s weekly survey of market economists showed inflation expectations were creeping up: the consensus for January had risen to 0.81 per cent from 0.78 per cent a week earlier. But Wednesday’s figure was off the chart.