Dilma Rousseff
Backlash In Brazil; Concern over flood of Chinese imports could trigger tax reforms, spending cuts
The label “Made in China” is stirring an ever-greater backlash in Brazil as cheap imports ravage manufacturers, putting pressure on new President Dilma Rousseff to fight back.
While Brazil boasts one of the world’s few pockets of robust growth, its emergence as an economic power masks deep, fundamental imbalances, especially in the manufacturing industry.
From car parts to shoes and textiles, imports are flooding Brazilian factory floors and supermarket shelves.
Finance Minister Guido Mantega says Brazilian industry is being hurt by a global “currency war” with China, the United States and others pushing down the value of their currencies to boost exports.
Brazil’s currency, the real, has gained more than one-third against the dollar in a little more than two years, and imports from China have surged, climbing 60 per cent last year.
“The government won’t remain passive or inert as our currency appreciates and harms our industry,” Trade and Industry Minister Fernando Pimentel said when he took office earlier this month.
Rousseff has said she will prioritize some kind of tax reform and adopt large spending cuts to reduce government borrowing needs and help lower interest rates.
However, with much of her political support linked to public-sector unions, Rousseff has expressed little interest in structural reforms such as cutting generous labour and pension benefits. She also defends a big state apparatus and is unlikely to lower the overall tax burden.
Brazil’s problems highlight how this week’s meeting between U.S. President Barack Obama and Chinese President Hu Jintao — at which the issue of the yuan will be front and centre — has reverberations well beyond those two countries’ borders.
Worried by Chinese policies, Rousseff is moving away from the stance of her predecessor and mentor Luiz Inacio Lula da Silva, who saw Beijing as more of an ally than an enemy in his effort to stem U.S. and European influence in Latin America. (more…)
The death toll from Brazil’s deadly floods, the worst disaster of its kind in the country’s history, keeps climbing as emergency operations step up efforts to quell the damage
The death toll from devastating floods and landslides in Brazil rose Monday to 640, as the military stepped up efforts to reach isolated communities near Rio.
The disaster, the worst of its type in Brazil’s history, was now mobilising more than 1,500 emergency personnel, including from the army, air force, and police and fire services.
Fears of disease spreading have added urgency to the search for decomposing bodies, and officials have told the local population to not use run-off water for drinking.
Rio de Janeiro state on Monday began seven days of mourning for the victims, adding to a three-day national mourning period declared by President Dilma Rousseff.
The toll looked certain to rise further as roads were cleared to finally allow bulldozers to reach mud-slimed debris in remote hamlets six days after sliding earth swallowed them up. (more…)
