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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.”
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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
Chartwatch
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