Friday, October 14, 2016

FT LatAm For 14 October, 2016

11:04 AM (5 hours ago)
to me
Revamping Brazil
By Samantha Pearson 
October 14, 2016
Brazilian President Michel Temer may well be the country’s most unpopular man. Promoted to the job following a questionable impeachment process, the 76-year-old is largely known for his striking resemblance to Bela Lugosi’s Count Dracula and for his use of painfully formal Portuguese phrases. In his spare time, he likes to compose somewhat corny poetry, mostly dedicated to his wife or “muse” - a 33-year-old former beauty queen. Even Temer’s name does him no favours - “temer” is the verb “to fear” in Portuguese.
However, in spite of his rock-bottom popularity ratings - only 14 per cent of Brazilians approve of his government according to a poll this month - Temer performed nothing short of a miracle this week, persuading the government to rein in spending for the next two decades.
On Monday night the lower house of Congress approved a constitutional amendment to freeze budget spending in real terms for 20 years – the first of the new government’s austerity measures to control the budget deficit and win back investors’ trust. Brazil’s budget deficit has ballooned to around 10 per cent of gross domestic product from 3 per cent in 2013.
After nine hours of heated debate, 366 lawmakers voted in favour of the amendment, far exceeding the minimum 308 votes needed. While the lower house of Congress must still confirm their decision in a second-round vote, followed by final approval of the measure by the Senate, Monday’s vote suggests Temer will have the support he needs to push through other ambitious fiscal reforms.
Meanwhile, the new management of Petrobras is busy trying to repair the damage done to the state-controlled oil company after years of government meddling and corruption. In an interview this week with the Financial Times, chief executive Pedro Parente said he had told Temer he would only take the job this year on three conditions: being able to hire Petrobras’s managers on merit, allowing economic rationality to dictate commercial strategy and being allowed to manage the thorny issue of petrol pricing. Temer apparently agreed to all three. The new strategy seems to be paying off with the company’s shares gaining almost 80 per cent since Parente was named as CEO in May.
All this good news may eventually help boost the ‘vampire’s’ approval ratings but it will certainly be no good for his literary endeavours, as Temer himself explains in his poem ‘Assintonia’ (‘Asynchrony’) “I’m lacking sadness, the mobilising instrument of my writing,” he writes. “Sadly everything is going well and because of this my writing is going badly.”
China rethinks developing world largesse as deals sour
Quote of the week
“You can lose your reputation very fast, but to regain it takes a long time” - Petrobras CEO Pedro Parente on his battle to turn around the state oil company
Other views
People in Colombia trust the church more than any other institution
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The week in review
Brazil’s exchange chief rejoices at post-impeachment opportunities
São Paulo’s bourse has its eyes set on regional expansion after year of political turmoil
Mexico’s anti-corruption efforts lack the urgency people desire
Notebook: Old habits die hard among the country’s elite
Colombians fear the return of a familiar terror
Communities bloodied at the hands of the Farc embittered by vote that vetoed peace deal
China rethinks developing world largesse as deals sour
An end to risky bets on the ‘red elephants’ of Beijing’s global financial diplomacy?
Colombia’s Darién Gap opens up to tourists
In the wake of the rebels’ ceasefire, the beaches and jungles of the Darién Gap are beginning to attract visitors in search of adventure
Brazil is on the ascent as investors eye further gains
With its currency and benchmark index surging, the country has become an emerging market favourite
Macri alters investor perceptions of Argentina if not the numbers
President’s strengthening of institutions and the rule of law has raised hopes
Brazil’s Michel Temer battles to sell austerity reforms
Government prepares to introduce 20-year freeze on budget spending
Rio rebooted: why luxury brands are buying in to the city
The Olympics may be over but fashion houses are still going for gold in Brazil
Prize of peace still eludes Colombians
The Nobel award for Juan Manuel Santos comes as the country is deeply divided