Adventures of a Gringa

May Reading Recommendations

My March reading list is coming along a bit slowly, but while I'm working on longer blog posts I've put together some of the things I've read recently that I recommend.

• Já Matei por Menos: Here's an explanation of how I came to follow Juliana Cunha's work. Her book was a quick and delightful read, a compilation of some of her blog posts dating back to 2008. One of the reasons I like Juliana's work is because she's a brutally honest, a no-BS kind of writer. No "homem cordial" (or rather, mulher cordial) here. Some of my favorite stories are about how she managed to get a steady stream of newly released books when she was young; the stereotypes of Bahians she's encountered in São Paulo; her favorite things about Salvador; her observations about her neighborhood; and her idea for a personal trainer for freelancers.

• 1491: New Revelations of the Americas Before Columbus: Without a doubt, this is one of the most fascinating books I've read in a long time. It presents theories about the indigenous population in the Americas before European colonization, claiming that these civilizations were much bigger than previously estimated, with even more sophisticated societies than thought. It covers a large portion of the Americas, but the parts about Brazil and the Amazon are really interesting. It discusses the formations found in parts of the Amazon, and introduces a theory that parts of the rainforest were actually planted by humans.

• 1565: Enquanto o Brasil nascia: As expected, this book provides an intriguing look at Rio de Janeiro's early history. It really gives you a better sense of the importance of indigenous tribes in the city's founding and development. There's a lot more about the city's original inhabitants and their lasting impact on the city than in other books I've read about the city. It also provides interesting insight into the attempted French conquest of Rio. Other cool facts: where the word Copacabana comes from, how Botafogo got its name, and how the Angolan queen N'Zinga impacted Brazilian history.

• Why Everything Costs So Much in Brazil: This Superinteressante article brings together a lot of the numbers and facts you've probably heard before about why things are expensive in Brazil. But it does so in an engaging and coherent way, and gives a good, simple overview. It's available in Portuguese and English.

• Cars Made in Brazil Are Deadly: An excellent piece of investigative work on Brazil's car industry by the Associated Press. That cars made and sold in Brazil are less safe than in other countries is not exactly a revelation, but this is the kind of piece that has the potential to have an impact and inspire a movement for higher safety standards.

March Reading List

As I'm preparing for some longer posts and interviews, I thought I'd share some books I'm reading or that are on my to-read list.

• 1565: Enquanto o Brasil nascia. Written by tech journalist Pedro Doria, this book looks at the early history of Rio de Janeiro and to a lesser extent, São Paulo. Since it's written by a journalist rather than a historian, it's a much more fun read, giving you some amazing descriptions of what Rio looked like during the colonial period. It's a fascinating read for history buffs, though it's only available in Portuguese at the moment. I'm a huge history nerd, so I ordered this for a sort of absurd price and waited a month for it to arrive in New York.

• Brasil, País do Presente. Also written by a journalist, I'm eager to get my hands on this book. It's by Daniel Buarque, editor-in-chief of content at Terra and a blogger who writes about Brazil coverage in the international media. The book examines Brazil in the eyes of the United States, looking at the continued clichés Americans tend to reference when it comes to Brazil, as well as Brazil's changing image as an economic giant.

• O Jeitinho Americano. Written by American Brazilianist Matthew Shirts, who is editor-in-chief of National Geographic Brasil and a columnist for VEJA SP, this book is a collection of stories about life in Brazil, where he has lived for over 25 years. It also as looks at Brazilian and American cultures and the differences between the two. It's also available in e-book format which should make buying it from abroad a bit easier.

• Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World. "As the future of the American economy seems to get bleaker by the day, it is tempting to look abroad for business opportunities. Europe and Asia don't provide much hope, but what about somewhere that's both closer to home and sunny year-round? In "Brazil is the New America: How Brazil Offers Upward Mobility in a Collapsing World," James D. Davidson shows that the current financial situation in Brazil is a haven for those looking to make money in a world in turmoil." In other words, could be interesting, or could be kind of bad. But I'm curious.

• A alma encantadora das ruas. Paulo Barreto, also known as João do Rio, was a writer and journalist living in Rio at the turn of the 20th century. He was quite the colorful character, and this book is a collection of his newspaper articles published between 1904 and 1907 describing a changing city. I've had this one on my list for a while, and luckily it's considered public domain and can be downloaded from the web.

• Já Matei por Menos. I first learned about Juliana Cunha's blog, Já Matei por Menos, through Alex Castro a couple of years ago. I started following her blog and later befriended her when she was in New York last year. Juliana is a journalist and student by day, and a blogger by night. (She's currently on an amazing adventure in Asia, which she's chronicling on her blog). Her first book is coming out soon, featuring some of the best posts from her blog about her life in São Paulo and her travels. It's available for pre-sale in Brazil, and although the site doesn't accept foreign addresses, you can also order directly from the publisher.

Brazil In The Year Ahead

The big story making headlines as we get closer to 2013 is that of Brazil's slowing economy. While that will continue to be an ongoing issue to watch, here are a number of other things to keep your eye on in the year ahead.

Issues to Watch: Brazil

• Oil and gas. With the first oil concessions in five years due to take place in 2013, this is the industry to watch next year. But the ongoing royalties fight in Brasilia isn't over yet, and the royalties law could end up in the Supreme Court again if Congress overturns Dilma's partial veto.
• Brazil's new middle class. As one of the most compelling tales of Brazil's growth, this group is the one to watch--especially to see if it can be sustained or grow amid sluggish GDP growth and rising consumer debt.
• Airport and port privatizations. Travelers eagerly await airport upgrades; businesses hope for more efficient ports. The process could be long, but there should be movement in this area next year, especially after the recent announcement that Rio and Belo Horizonte's international airports will also be privatized.
• Construction and housing. In spite of slower growth, this is an area that continues to chug along. FipeZap estimated that real estate prices rose by nearly 14 percent this year and doubled within the last 3 years. The government also hopes to use this sector to boost growth, and the subsidized housing program Minha Casa, Minha Vida is full speed ahead.
• BNDES. Brazil's development bank lent nearly $60 billion through November of this year and could lend up to $73 billion by the end of 2012. Keep an eye on where BNDES is spending, particularly the Brazilian multinationals and major domestic projects, like the controversial Belo Monte hydroelectric plant.
• Government corruption. Will the mensalão defendants actually go to jail? Will Dilma continue to show no mercy for those accused of wrongdoing? Will new transparency laws help uncover new scandals?

Issues to Watch: Rio

• UPPs. Violence has flared up in several of the city's "pacified" favelas, and most of the on-duty military police that died this year died in UPP favelas. Keep an eye on how current UPP favelas are faring in terms of security, as well as plans for new UPPs in other favelas.
• Transportation construction. The bus rapid transit system is underway and operating in a section of the city, with four new stations inaugurated last week. Four more stations are due to open in January with ongoing construction throughout the city. But getting the system online isn't the only challenge; people keep getting hit and killed by the BRT and many have complained about overcrowding. Expanding Rio's metro system is also underway with a price tag of $3.6 billion.
• Militias. The government has focused much of its security strategy on combatting drug traffickers and bringing a permanent police presence to favelas. Will it finally turn the heat up on the city's paramilitary groups?
• Favela removals. Forced evictions from favelas to make way for mega-event construction and urban renewal have stirred controversy on an international scale. Keep an eye out for how these removals play out.
• Mega-event preparations. From stadium construction to training programs, this is an ongoing area to watch. Maracanã Stadium renovations are due to conclude by the end of February, likely over budget. Maracanã is also due to be privatized next year, so keep an eye out for who wins the prize.

People to Watch

• Guido Mantega: Will he hang on as finance minister? If an Economist article won't be his downfall, could more disappointing growth numbers be the final straw? Or will he stay on until the bitter end?
• Joaquim Barbosa: The new president of the Supreme Court became something of a national hero for his hard-line approach during the mensalão trial. But he also decided against immediate imprisonment for those convicted in the trial. Beyond the mensalão, keep an eye on Barbosa and major STF trials next year.
• Lula: The heat recently turned up again from mensalão accusations, though it seems likely he'll remain unscathed for now. But with presidential elections in 2014, will he decide to become a candidate or let Dilma run for reelection?
• Eduardo Campos: The governor of Pernambuco looks like a likely presidential candidate in 2014. Watch for campaign announcements next year.
• Marco Antonio Raupp: Brazil's minister of science, technology, and innovation could be the spokesperson for some of the government's most interesting new initiatives. In November, he announced the launch of Start-Up Brasil, a $40 million project aimed at Brazilian startup companies.

People to Follow

• Brazil's economy - Luciano Sobral, the Drunkeynesian
• Brazil's new middle class - Renato Meirelles of Data Popular
• Brazil tech news and startups - TNW's Anna Heim
• Government transparency - Observing Brazil's Greg Michener
• Everything Rio - RioReal Blog's Julia Michaels
• Rio mega-event preparations, favela removals - Christopher Gaffney of Hunting White Elephants

Photo: Charlie Phillips

Brazil Under Construction

Alphaville construction site, Juiz de Fora

Driving through the dusty rolling hills on the western edge of Juiz de Fora, a mid-sized city in Minas Gerais about two hours from Rio, you'll notice bulldozers cutting away swathes of grass and the first signs of concrete. Soon, the scenic countryside will give way to a massive residential and business complex. Here is the site of Alphaville, the latest self-contained mini-city under construction in Brazil's urban areas. The complex will stretch nearly 2.1 million square meters, and is advertised as a "true planned neighborhood," perhaps a reference to favelas, which for a long time were not considered real neighborhoods. It won't just have homes. It promises a commercial center, services, leisure activities, and even a government building: a city within a city.

Originally built in Barueri outside of São Paulo city in the 1970s, the first Alphaville encompasses 3 million square meters and along with residential housing has its own schools, shopping centers, banks, hotels, supermarkets, a movie theater, and other services. Security is run by the complex and is tight. Now, there are nearly 45 Alphavilles established or under construction throughout Brazil--all the way from Manaus in the Amazon to Foz de Iguaçu on the border of Argentina.

Targeted at the upper-middle class as an escape from the dangers of urban life, these walled communities are the antithesis of favelas, with luxury homes secluded from the rest of the city and providing enough services that means you may not even have to leave. Alphavilles are "planned, self-sufficient, and sustainable centers with complete and planned infrastructure for a rational level of occupancy that guarantees harmony between urbanized space and the environment," the website reads.

And it's not just Alphaville. Eike Batista, one of Brazil's wealthiest men, recently purchased former amusement park Terra Encantada in Rio's Barra de Tijuca to turn into a self-contained neighborhood. The 700,000 square meter space will be converted into residential and commercial buildings in an area of the city that requires a car to get from place to place. "Cariocas like to do everything on foot," he said last month. "In my neighborhood, people will feel like they're in Zona Sul." He said he would live in the neigborhood, too. "It will be a development with all of the infrastructure of a planned neighborhood, but like Ipanema."

It's not just these walled mini-cities springing up in Brazil. Cranes pepper the skyline in São Paulo and Rio as new apartments are under construction, given a growing middle class and a booming real estate market. Open any newspaper and you're likely to see a dozen ads for apartments. Meanwhile, the government's Minha Casa, Minha Vida program for subsidized housing and loans for low-income and middle class buyers is in its second phase. Beginning in October, the government lowered interest rates while raising the maximum value of homes in the program. Since the program began, one million homes have been constructed.

And with the busy bees of construction at work and the sense of confidence in the country's growth, there's little evidence that people are worried about Brazil's economic slowdown, industrial stagnation, or the potential for rising inflation. With record unemployment and continued consumption, Brazilians don't seem too concerned about the economy. On the contrary: the buzz of construction sounds belies any slowdown.

Photo: Alphaville

November 8 Brazil News Briefs

Rio de Janeiro

• Microsoft announced that it will open its first advanced technology center in Brazil, setting up the center at a historic building in Rio's port area. The company will invest $100 million in the center over the four years.

• Brazil's House of Representatives voted in favor of the Senate's oil royalties reform bill, which would shift royalties away from producing states and distribute more to non-producing states. Rio officials say the state will lose 6 percent of its annual budget and around $2 billion next year alone. Rio Governor Sergio Cabral warned that if President Dilma Rousseff signs the bill into law, it would threaten Rio's mega-events. “It’s absolutely not viable. We are going to close our doors. We won’t do the Olympics, we won’t do the Cup,” he said.

• Prior to the World Cup and Olympics, Rio Mayor Eduardo Paes hopes to pass tax reform that would increase property taxes by 30 percent and widen the property tax base by 57 percent. Paes, who was reelected in October, had promised not to raise the tax while on the campaign trail. So given the backlash, he decided to wait until next year to introduce the reform in the state legislature.

• Rio's new secretary of transportation said over the next 4 years, the city would reduce its bus fleet by one-third--around 2,900 buses--in part to reduce Rio's growing traffic problem. Meanwhile, he said he would increase the number of rapid transit buses as commuters face long lines and overcrowding on the BRT.

• The Financial Times featured a long piece on Rio's police pacification units, exploring some of the strategy's accomplishments as well as ongoing challenges.

São Paulo

• São Paulo judges are now legally allowed to offer petty criminals the option of donating blood in lieu of jail time.

• A Datafolha survey of São Paulo voters found that 44 percent would not have voted in the mayoral election if voting wasn't mandatory.

• Reuters looks at how drug-trafficking gangs are contributing to a crime wave in São Paulo. Journalist André Forastieri writes about reports of Rio-style militias emerging in São Paulo and questions if they could be involved in rising crime.

Brazil

• A very entertaining "guide" from Granta offers advice for foreigners in Brazil, including quirky literal translations of Brazilian slang and how to maneuver Brazilian society.

For daily news briefs, be sure to follow me on Twitter.

Photo: Eliseu Cavalcante. Rio de Janeiro's port area.

Brazil's Oil Royalties Conundrum

On Tuesday, Brazil's Congress is due to vote on a bill that could redistribute the country's oil royalties, reducing the share of oil-producing areas and expanding the share in other states. Officials in Rio de Janeiro and Espírito Santo, two of the states that benefit from the current royalties system, bitterly oppose the bill. But evidence shows that in coastal towns and cities that earn oil royalties in these states have growing cases of corruption and mismanagement, as well as high levels of inequality and little progress in human development.

Landless settlers in Macaé, 2011.

A few recent examples are illustrative of the corruption and mismanagement problem in cities with large oil royalty funds.

In March, the government of Campos dos Goytacazes in Rio proudly announced the inauguration of a new Sambadrome, large enough to hold 40,000 (10 percent of the city's population). The stadium--funded entirely by oil royalties--cost R$80 million, going R$10 million over budget. Campos is the city that earns the most oil royalties of any city in Brazil, receiving R$9.7 billion from 2000 to 2010. But over the same period, the city dropped from 17th to 42nd in Rio state's development index. Seventeen percent of the city's schools and preschools operate in rented homes. Primary education in Campos received the worst grade in the state.

In April, a Federal Police case dubbed Operation Lee Oswald led to the arrest of 28 people including the mayor of the city of Presidente Kennedy, Espirito Santo. The city government was accused of fraud in awarding government contracts, overbilling, and embezzlement, with the mayor as the ringleader. Those arrested were charged with corruption, criminal conspiracy, and money laundering, among other crimes. Presidente Kennedy earns the most money in oil royalties in the whole state; the city gets 20 percent of the total amount of royalties earned in Espirito Santo. From 2000 to 2010, the city earned R$398 million in royalties. Despite a high GDP per capita, the city has the fourth-worst human development index statewide.

In September, a Rio judge decreed that the secretary of security of Mangaratiba, a Rio coastal town, would lose his job and demanded to freeze his assets. The secretary, also a policeman, was accused of earning a fortune far beyond his means, and the judge demanded he pay a fine for illegally accumulating wealth dating back to 1992. Mangaratiba earned R$170 million in oil royalties from 2000 to 2010.

Uneven development in royalty-earning cities is also an issue.

A study by Macroplan as explained in an excellent EXAME article looked at 25 cities that earned the largest amount of oil royalties from 2000 to 2010. It found that despite a huge rise in GDP, cities accomplished little in terms of human development. These coastal cities in Rio, São Paulo, and Espirito Santo earned R$27 billion (US$13.2 billion) over that period. Of the 25 cities, 16 had a higher unemployment rate than the national average in 2010. Seventeen had a lower average wage than the national average of R$1,200 per month. Twenty had higher illiteracy rates than the state average. Many cities imported workers to fill skilled jobs since the locals are unqualified. In total, 10 percent of the inhabitants in all 25 cities earn a quarter of the minimum wage. In Macaé, which earned the second most in royalties at R$4.6 billion over a decade, nearly 10 percent of the population lives in extreme poverty. By comparison, in Rio state as a whole, around 3.7 percent live below the poverty line.

Violence is also an issue. In 13 of the cities, the homicide rate is above the state average. These include Linhares (Espirito Santo), Búzios, Cabo Frio, and Paraty (idyllic beach towns in Rio state) which are among the 100 most violent cities in Brazil.

Other coastal cities in Brazil earn royalties, too--with similar results. Guamaré, a town of 12,000 in Rio Grande do Norte, earned R$202 million over the past decade and had eight mayors during the same period. One was arrested for embezzlement; another is under investigation for paying over half a million reais to bands to play at Carnival last year. The current mayor spent R$2 million on Carnival this year and R$2.2 million to celebrate the city's birthday with high-profile singers. Despite having the 20th highest GDP per capita in the country, as well as being home to biodiesel plants, a Petrobras refinery, and wind farms, 10 percent of the population lives in extreme poverty and a fifth of the poulation is illiterate.

So what will this mean for royalty distribution and how these funds are used? "Oil exploration has 20- to 40-year cycles, which come to an end. Brazil's cycle is just at the beginning and we need to decide how to best use these resources so that in the end, we have thriving cities, not huge favelas," Macroplan director Alexandre Mattos told EXAME.

Image: Mariana Criola. Police prepare to remove landless settlers in Macaé in September 2011.

The Paulistanization of Rio

Traveling between Rio and São Paulo, it's evident that in some ways, Rio is becoming more like Brazil's biggest city, in both good ways and bad as it grows and develops. Here are just a few examples. 

-Traffic has spiraled in Rio with a spike in the number of cars on the road. Sitting in traffic in Rio after sitting in traffic in São Paulo, it's hard not to compare the experience: bumper to bumper traffic, barely moving, with motorcycles noisily speeding between lanes. São Paulo traditionally has some of the biggest traffic jams in the country; Rio commuters now deal with longer and longer treks to and from work, and you'll find heavily congested roads even outside of rush hour.

-Car ownership in Rio rose by 62 percent--or 1 million cars--from 2001 to 2011, according to the Observatório das Metrópoles. There were an estimated 2.82 million cars in Rio last year. (São Paulo still has the largest number of cars in the country.) Motorcycle ownership also rose by 338 percent over the same period to 430,733. In one weekend edition of O Globo, one of Rio's largest newspapers, I counted nine sections on cars, including ad sections and a "caderno especial."

-Air quality has gone down as a result of so much traffic. São Paulo, which historically had poor air quality, now reportedly has cleaner air than Rio. A 2011 World Health Organization report indicated Rio had the worst air quality in the entire country.

-Cost of living has increased in Rio, with everything from restaurants to housing to movie tickets. São Paulo has traditionally been the most expensive city in the country and has a higher cost of living than Rio, according to the 2012 Mercer cost of living index. This year, Rio ranked as the 13th most expensive city in the world, right behind São Paulo at 12th in the world. But Rio has been creeping up behind São Paulo; it was two spaces behind in 2011 and 8 spaces behind in 2010.

-Rental and real estate prices also spiked. São Paulo has traditionally had some of the most expensive real estate in the country, but Rio real estate has become very costly. According to Cushman & Wakefield, this year Rio has the most expensive office space rentals in Brazil and all of Latin America. (Its office rentals are now the 8th most expensive in the world.) In October, Rio passed Brasília to have the most expensive real estate prices per square meter in Brazil.

-Malls have mushroomed in Rio. With the largest economy in the country and no beach, the city of São Paulo was known for its malls. Rio, too, has a big mall scene but in recent years, the city's seen new malls popping up in the Zona Norte and Zona Oeste, as well as numerous malls in Barra and Recreio. The city could see a new mall in its train station, Central, and a huge new luxury complex called VillageMall is due to open in Barra next month.

-More finance and multinational companies are opening offices in Rio, even though São Paulo is still Brazil's business hub. Just a few examples of companies opening or planning on opening offices in Rio include Pimco, Honeywell, Fircroft, and Dow Chemical. Cisco plans to open a center for innovation in the city, and GE plans to open its Fifth Global Research Center in Rio. The massive R&D center will be built on Fundão and is the first of its kind in Latin America. Direct Edge even hopes to launch an equities exchange in Rio de Janeiro to compete with São Paulo's Bovespa. Media companies are also planning expansion into Rio prior to the upcoming mega events; one recent example includes SNTV, a TV sports news agency.

-International educational centers are opening in Rio. International exchange company CIEE opened its first Rio de Janeiro center in August. Columbia University will officially inaugurate a Rio de Janeiro study center next year. Harvard University is rumored to be negotiating a Rio de Janeiro center.

-Tech companies are increasingly flocking to Rio, though São Paulo is still a major destination for such companies. Over the past few years, Rio has become one of Brazil's biggest hub for startups. Rio has more tech parks than anywhere in Brazil and hosts 22 incubaators, according to Rio Negócios. Around $1.4 billion in private investment have gone to Rio tech hubs since 2010. Some hope Rio could become Brazil's "Silicon Beach."

-The fine art scene is growing in Rio. While Rio has a number of fantastic art museums, São Paulo has traditionally been the national leader in fine art. But that may be changing. ArtRio, the city's biggest art show, began last year, when sales hit $70 million--three times what the show reached earlier in São Paulo, according to RioReal Blog. This year, the show saw 74,000 visitors in just the first four days. With a growing cultural scene, Rio's gallery scene is also expanding.

Image: Mark Goble