The [U.S.] House Appropriations Committee on Wednesday approved a 2014 Homeland Security funding bill with a bipartisan voice vote. The bill is expected on the House floor in June. In a surprise development, the committee approved an amendment from Rep. Tim Ryan (D-Ohio), which would effectively end immigration from Brazil.
The provision was included in order to pressure Brazil to extradite Brazilian-born Claudia Hoerig to the United States for trial in the murder of her husband, Air Force Major Karl Hoerig. The Ryan amendment does not affect travel visas or visas for temporary workers, an aide said.
If passed, the amendment would defund USCIS operations that involve processing immigration applications from Brazilian nationals.
Ao aprovar na quarta-feira, 22, um projeto de lei para liberar recursos para a segurança interna dos Estados Unidos em 2014, o Comitê de Finanças da Câmara dos Deputados avalizou emenda que impede a emissão de visto de residência permanente para cidadãos brasileiros nos Estados Unidos. O projeto de lei será submetido ao plenário da Câmara em junho e, se vier a ser aprovado pelas duas casas do Congresso americano, comprometerá o atual esforço dos EUA de aprofundar sua relação com o Brasil.
It's important to note: Brazil's Constitution prohibits extradition of Brazilians. Plus, it's complicated: Hoerig renounced her Brazilian citizenship when she became a U.S. citizen in 1999, but Brazil's Ministry of Justice never finished processing her paperwork to terminate her citizenship. Since Brazil still considers her a citizen, it won't extradite her, but the U.S. also considers her a citizen.
While it seems unlikely that something this ridiculous could pass, stranger things have happened, and this Congress doesn't exactly have a great track record. It's especially scary because it got tacked on as an amendment and could easily get lost in the fray.
I agree that impunity is a serious problem, and I think others would too. But this is also a sign of how far from reality some members of Congress are in terms of comprehending Brazil's importance to the United States. Brazil and the U.S. may have disagreements when it comes to binational legal disputes like this (see: Goldman case), but this is not something you do to a serious ally. You don't punish people who aren't to blame for the problem.
UPDATE, 6/9: Good news - the House eliminated the language on banning Brazilian immigration from the bill on June 5.
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.
President Rousseff with university students from Pernambuco, a state that is 58% multiracial and black.
May 13 marked the 125th anniversary of the signing of the Lei Áurea, the law that abolished slavery in Brazil. More than a century after Princess Isabel penned the law, Brazilians of African descent have 1.6 fewer years of schooling than their white counterparts, and earn about 60 percent of what whites earn. Black Brazilians represent 65 percent of homicide victims, and have an infant mortality rate 60 percent higher than white Brazilians. Black Brazilians make up about 60 percent of the prison population, and have an average life expectancy of six years less than white Brazilians. There's a lot of sixes.
To try to correct these historic inequities stemming from slavery, the Brazilian government has made efforts to pass legislation to ensure rights and equal opportunities for black Brazilians. But can one legislate a change in culture?
The first law was passed in August 2012, requiring public universities to set aside half of their spots for public high school students, largely aiming to benefit black Brazilians. And though racial quotas had been in place at numerous universities for at least a decade, the law inspired and continues to inspire controversy. There are those who argue that race in Brazil is too hard to define, and that social class should be a basis for quotas. Some say the system is easy to exploit. There are those who argue that quotas incite more racism, and lower the quality of education. And there are those who simply deny that racism or racial inequality exists at all. Early results show that quotas actually have the opposite effect, since in some universities, affirmative action students tend to get higher grades than their counterparts (though they tend to do worse on standardized testing, according to one study). I recently had a conversation with a black professional from Rio and a white journalist from São Paulo who both explained why they oppose quotas based on a variety of the aforementioned reasons.
"The worst still are those people (many of whom are black) that are against quotas (and other similar things), arguing that they 'never needed them.' And I consider this and say: 'I agree, of course, how could I not? And what's more, I'm also against that whole dialisis thing in public hospitals and wheelchair ramps in buildings.' All that happened yesterday, and continues happening today. The past, like a stone thrown in a lake, creates ripples in the water and has an effect on the present. The past is the present. Racial quotas are necessary today not to correct the historic injustices of the past, but to correct the daily injustices of the present."
Even though Brazilians of African descent make up at least half of the population, only 6 percent of university students are black. That university classrooms have historically been largely white means a major sea change for establishing a more diverse student population. It means changing not only the culture of colleges, but the concept that universities should no longer be centers of privilege.
Then there's the Domestics Law, which was signed in March and went into effect in April. The law has revealed a serious culture clash between the past of slavery and the modern reality of labor rights. Brazil has nearly 7 milliondomésticas, more household servants than any other country. The majority are women, and over half are black. Now, household workers have the same labor rights as formal-sector workers, like a 44-hour work week, a lunch hour, overtime, and unemployment insurance.
The fear is that the law could lead to mass layoffs--around 815,000, by one estimation. Some have complained that they won't be able to afford maids anymore; conservative magazine VEJA published a calculator to determine how much maids will cost under the new law. It also published a cover story about the law with an image of an unhappy man doing the dishes with the headline: "You tomorrow." Globo published a piece about what it will mean for families that have to do their own cooking and cleaning. One psychoanalyst quoted in the story predicted "emotional confusion" and a higher rate of divorces.
Historians compared the legislation to the Lei Áurea, saying it was a watershed moment for black Brazilians. Slavery created a "strongly exclusionary society, despite appearing racially diverse and having social mobility," said UFRJ Professor Flávio Gomes. "My surprise, with the domestics law, is the fact that these workers were in a category of "nearly citizens" in terms of workers rights."
Even today, many middle-class homes, even small ones, have a room and sometimes a separate bathroom for a domestic worker. Relationships between maids and families are complex; the movie "Neighboring Sounds" illustrates this phenomenon well. The law aims to change this, in theory, moving from a slave-owner relationship to one of worker-employer. "We’re shutting down the last of the slave quarters and throwing away the key," Senate President Renan Calheiros said last month.
But will the law work? Will families fire their maids? Will they simply ignore the law and risk being taken to court for inevitably lengthy labor lawsuits? Or will they ignore the law and count on the maid not to complain? Or will unwillingly go along with the new rules? Laws in Brazil sometimes "don't stick," and this is an interesting one to watch.
But the bigger question is if the law will actually change the culture of domestic employment. My guess is: not anytime soon. There has been talk of maid shortages due to women moving into other professions, another element of pressure on people employing domestics. My guess is that if these shortages continue and if families fear backlash from not obeying the new law, they may turn to foreign workers, which has already started happening in São Paulo. Brazil has become an increasingly bigger destination for immigrants, and low-paying jobs that involve going around labor laws are natural magnets for foreign workers.
One can look to other countries, like the United States, to try to see if legislation like affirmative actions works or has a sizeable impact. But how long laws take to change a deeply rooted culture is much more difficult to define.
Alessandra Orofino is one of those people who identifies a problem and immediately starts planning possible solutions. She's an organizer, which is complicated in the digital age given the speed with which you can connect to a huge audience, but also given the ease of clicking "like" on Facebook can limit people's willingness to do much else. By using web and mobile technology, Orofino is not only helping organize Cariocas, but is helping change the way Cariocas interact with and influence public policy. And she's only 23.
I spoke to the co-founder and executive director of the Meu Rio organization, and she told me about how it all began and her goals for changing how Cariocas influence decision-making in Rio.
The Origins of Meu Rio
Orofino's big idea came from her different experiences abroad and at home. She grew up in Rio, and lived in Montreal for part of her adolescence. She got a scholarship to study political science in Paris, but after a year at a training ground for French public officials, she decided to go back to Rio. In Brazil, she began working for Promundo, an advocacy group against gender-based violence and violence against children. There, she gained experience in campaigning.
After that, she went India to work on gender-based violence research. In New Delhi, she worked with a local NGO and interviewed victims of violence.
“I knew that I wanted to work with organizing because one of the things
that were most striking to me in India was that every one of the girls I
talked to felt so lonely,” Orofino said. Through her experience, she knew there was a community of people with the power to change things, while there was a lack of public policy action happening. She wanted to organize, but couldn't do that in a research role.
Her next step was to go to Columbia, where she got a scholarship to study economics. But before she left, she had an important conversation with a high school friend, Miguel Lago. It was in 2008, right after Fernando Gabeira had lost the Rio mayoral election to Eduardo Paes. Gabeira had a really interesting campaign, said Orofino, that
was “pretty bold” in its premise and execution; he lost by a small margin. A
group of young people were engaged in his campaign, but felt frustrated after the election, almost wanting the city not to work and "for
everything to go to hell." Lago and Orofino discussed the fact that the energy of these young people wasn’t being channeled toward the good of the city to build something positive. They talked about how to organize people in Rio to become "a real power toward accountability, transparency, and
participation in government, regardless of who was in power," explained Orofino. They wanted to create a voice for the city that wasn't subject to the electoral cycle.
So Orofino got to work, examining organizing efforts work in other parts of the world. She discovered Get Up, the biggest political movement in Australia that uses new and innovative tools to organize people. Jeremy Heimans, the founder of Get Up, was moving to NYC to start a new organization called Purpose just as Orofino was about to start at Columbia. Two weeks after arriving in New York, she knocked on his door, and he hired her. After starting at Purpose, she found the perfect place to incubate an organization in Rio. After working at the organization in New York, she went back to Rio to open Purpose's Brazil office and start fundraising for her own organization. At the end of 2011, Meu Rio was born.
Channeling the Power of Technology to Mobilize Cariocas
Meu Rio is an online platform that allows Cariocas to have a say in what's happening in the city. "We think about our work as translating public policy issues into a
language that is understandable to broader society and young people," said Orofino. The site gives people an opportunity to act on things they think are important, and allows both organizers and users to identify areas for change and action. Meu Rio has a team
dedicated to researching public policy so they can mobilize people
effectively.
There are a number of different components to the organization. First, there are online petitions, on both Meu Rio and on a subsite called Panela de Pressão. This site allows petitioners to email the responsible party directly when they sign a petition. Meu Rio also does video and design work, creating short clips and infographics to explain public policy. The organization also has a blog called Blog de Olho, which serves as a watchdog for the city council. Meu Rio sends a person to cover what's happening there every day; not even the media does that anymore, Orofino points out.
Keeping an eye on the city council has helped inspire campaigns. One, for example, demanded open data from the city council. It gave in, and by July their data should be accessible. Another came out of the state legislature. Meu Rio discovered that a state-level bill had been introduced at the last minute to change the city's environmental codes. It would give the executive the power to choose which projects would go through an environmental licensing process, and which would be exempt. The criteria for deciding which ventures would be exempt would not be released to the public, nor would the bill be discussed with civil society. "It was an open door for corruption," said Orofino. The vote was due to take place the same day, but Meu Rio mobilized quickly and got 7,000 people to sign a petition and several hundred people to call their legislators. Around 150 people showed up to the vote. The legislators got scared and didn't vote, and just days later, the governor killed the bill, saying it was flawed.
Meu Rio uses technology not only to mobilize, but to have a direct impact. Last year, an eight-year-old student wrote to Meu Rio about her school, the Escola Municipal Friedenreich. It has around 300 students, and is one of the best public schools in the country along with specialized staff and facilities for the disabled. The city had decided to demolish the school to build a parking lot for the nearby Maracanã Stadium. There was no plan to rebuild the school or transfer the students, and the parents only found out through the local news.
So the organization set up a campaign to save the school and got 20,000 signatures on a petition. The campaign started attracting media attention, but even the secretary of education--who Meu Rio met with--didn't know what to do. So Meu Rio decided to try a new tactic. They set up a webcam at an apartment across the street from the school, and monitored the school 24/7 through a website with a live feed from the camera. People could sign up to be a "guardian" of the school and watch the feed, and if bulldozers showed up, those watching could press a red button to contact Meu Rio, which would send out text messages to followers in order to physically protect the school. Around 3,000 people signed up to watch the school, and using analytics, Meu Rio discovered that for the two months of the campaign, not a minute passed that someone wasn't watching the school. Public officials realized it would be a PR disaster to demolish the school, said Orofino, and gave
up. The school will stay through 2013, and should it be demolished, a new school will be built in the same neighborhood.
Building a Movement: Next Steps
Meu Rio is working on three different objectives, aside from their mission. First, they're trying to grow their membership base. Any time someone takes an action on the website--be it signing a petition or signing up for an event--they have to register with their email address. After only a year and a half of existence, Meu Rio has 100,000 members who have
acted on at least one campaign. Around 80,00 have acted on more than one
campaign, and about half are ages 20-29.
The next step is fundraising. Orofino participated in initial fundraising rounds from around 80 individuals and a few local foundations. But it's not easy to be a non-profit in Brazil without receiving funding from government agencies or public companies. Since Meu Rio doesn't want to compromise its work, it can't receive money from the government or political parties. Now, it's trying to diversify its sources of funding, and started a campaign in April to allow people to give in smaller amounts online and to give monthly donations. Around 350 people signed up to give monthly, and Orofino wants to get to 1,000 this year. The goal is to be completely member-funded within three years, she explained.
The last step is becoming a completely independent organization. Meu Rio was incubated by Purpose, which is still an incubation partner and is technically the employer for some staff members.
Orofino's Rio de Janeiro
I asked Orofino about a worthy issue in Rio that doesn't get a lot of attention. Sanitation, she explained, is an invisible problem and a "perfect failure." Fifty percent of Cariocas lack sanitation, be it safe piped water or a connection to the sanitation system. Not only is it a public health risk, but an environmental risk for the whole city, Orofino pointed out, given that sewage ends up in the ocean or in someone's backyard. Since pipes run underground, it doesn't create electoral capital, since no one will see it. It's not as visible as other public projects, and it's not a terribly sexy issue.
Meu Rio has a campaign to change how CEDAE, the city's water and sanitation company, works. Its president, who has been there for a long time, has unchecked powers, since CEDAE isn't regulated by other government agencies. This allows the president to make major decisions, like changing the price of water or making changes to the sanitation system without any regulation or consultation. Meu Rio's campaign is still ongoing.
On the other hand, I asked her why people should be excited about Rio. For Cariocas, she said, "there’s a tremendous window of opportunity
that is open now and will close soon." With lots of investment and attention, "Rio has the timing, resources, and momentum to tackle its historical challenges," she noted.
The eyes of the world watching, too, she said. Since that's not always the case, Cariocas should use that to improve sanitation,
education, urban mobility, and other obstacles to development.
For foreigners, Rio provides an "amazing laboratory," said Orofino. It's a city of contrasts that can remind one of Paris in one neighborhood or Nairobi in another. "What happens in Rio is relevant to the developed
and developing worlds," she explained. Seeing what's happening in innovation
and startups could be useful for people to implement all over the world. Plus, Rio is an easy city to feel at home in. "Rio has the willingness to lend its identity to whoever lands here," Orofino told me.
Finally, I asked about what will happen when the mega-events end. For Meu Rio, the work won’t change. "The most important thing will be to make
sure that after the party is over, the people who are here are able to
keep participating in the life of their city," Orofino said. "We talk about
the infrastructure and social legacy of the Olympics, but not enough about democratic legacy. What does it do for democracy and participation? If we
use those opportunities to create a culture of accountability and
participation, that’s something that can then live on long after this
window of opportunity is gone."
During my recent trip to Rio, someone told me that Rio is experiencing its "golden age" because of the upcoming mega-events and the growing investments the city is attracting. So given this fact, what would be the best legacies to result from this presumed renaissance? A functional public transportation system? Improved public schools? State-of-the-art hospitals? A modern sewage system? Maybe. But one thing that will definitely come out of this period are grandiose public works, ones that certainly contribute to the city but ones that also need to be maintained after the Olympics or risk becoming white elephants. That's really one of the big questions: if everything being built and accomplished in this window of time can survive until 2017.
I'd like to give two examples of these public works, which I had the chance to visit this month, and a third example of a cautionary tale.
The Rio Museum of Art (MAR) is an amazing new institution, which opened to the public in March. It's made up of two connected buildings: an uber-modern one with a sleek design, and another that resembles the early 20th century architecture that you find in downtown Rio.
The museum not only has a great collection of modern art, but it has entire sections that showcase Rio. It's like a trophy case for the city, and a wonderful way for people to celebrate Rio, its history, and its culture in a meaningful way. It's not that Rio doesn't already have good museums, but often they are places seen as places for, and sometimes with works catered to the elite. It was heartening to see not only that the museum was packed, but that there were Cariocas from across the socioeconomic spectrum.
And at MAR, it's not what you usually find at Rio's museums, like paintings from the 18th century. There are lots of works focusing on favelas, as well as Rio social movements. For example, there's an amazing installation of a favela made out of cinder blocks, wire, beer cans, and other recycled materials (see below). But even those classic paintings are wonderful, showing the city in its colonial days.
Another plus: tou can go all the way to the roof and see a view of the bay. MAR is part of Rio's massive port revitalization project, and there are several screens that have an interactive view of what the area will look like when all the construction is done, with videos showing the simulated buildings and infrastructure. (The Museum of Tomorrow, for example, will be built on the spit of land you can see in the photo below). Looking at the simulations, you can't help but hope that not only will they actually come to fruition, but that they'll also last.
Next is another public work on the other side of town. Parque Madureira, a huge, beautiful park surrounded by favelas and blue-collar neighborhoods, is a perfect example of creating public space where it's needed. (It's also a smart political move, but anyway.) The park opened last June, and now not only attracts Cariocas but also performances from singers like Daniela Mercury and a visit by skater Tony Hawk.
There's a stage with a large plaza for concerts and shows, numerous areas for different sports ranging from volleyball to ping pong, a bike path, koi ponds, a playground, a fountain for kids to play in, gym equipment, several cafés, and a skate park that Hawk called one of the best in the world. It's also very green, both literally and figuratively, with different elements made from recycled materials, some solar panels, and plants sprouting from building facades. There's also a visible police presence, including both municipal guards (who can't carry guns) and military police.
One of the coolest parts of the park is the "nave de conhecimento," or knowledge ship. It's one of several located throughout the city that give locals free internet access. There are iPads for kids, an upstairs with laptops for events and classes, and evidently, a Wifi signal that people use by sitting outside. There are also several large touch screens that allow people to search maps, look up information, and make suggestions to local government about their communities.
The government wants to expand the park even more. But walking through and seeing everything looking new, it made me concerned about what will happen once Paes is out of office, let alone 2017.
And then we come to Engenhão.
This photo was taken in 2007 during the Pan-American Games, when the stadium was brand-new. Now, with less than 2 months to go before the Confederations Cup and about a year away from the World Cup, Engenhão is closed indefinitely. That's because the six-year-old stadium is essentially falling apart. The city found that the stadium--which cost $190 million to build--had structural problems, particularly with the roof. That mega-event, Brazil-based journalist Andrew Downie points out, was over budget with promised infrastructure projects that never happened, and venues that aren't being used or now have to undergo costly renovations. "It is nothing short of scandalous that the organizers are being given a second chance," he wrote.
At the end of a long hall on the second floor of Rio's international airport, there is a group of ATMs designed to rob bank account numbers. Despite reports of these robberies allegedly dating back to 2008 and police reports from victims, no one has done anything.
The horrific rape of an American woman in Rio earlier this month, as well as the rapes of Brazilian women that only came to light as a result, put the city on high alert. In an ideal world, these crimes should serve as a wake-up call about impunity and rule of law--that police should actually attempt to investigate all crimes, not just those with rich or influential victims. In addition, this week's attack in Boston brings into sharp relief the need for even more security during mega-events. Foreign Minister Antonio Patriota said that Brazil will take "all necessary measures" to do so. The city government is already taking steps to try to reduce crime, with programs like the pacification units (whether that is really working is another question, but it is at least taking steps).
So with that in mind, I realize that an ATM scam pales in comparison to any of the aforementioned unspeakable crimes, or many of the crimes taking place in Rio, for that matter. But it's emblematic of a continuing problem in Rio with the police failing to act and of impunity in general. Police sometimes are unhelpful; the last time my husband tried to report a card getting cloned in Rio a
few years ago, the police actually wouldn't even file the report. When people do report crimes--in this particular case, both foreigners and Brazilians--nothing is done. All in all, this is the kind of thing that makes Brazilians purse their lips and shake
their heads, and say something about how that's a shame but that's Rio. But it doesn't have to be this way, not for smaller crimes nor for the more serious ones. It shouldn't have to be.
***
I became the unwitting victim of the scam last week while traveling in Rio. I was alone and didn't want to wander around the streets with cash, so I thought I'd take out money as soon as I got the airport. The airport, after all, should theoretically be one of the safest places in the city. Theoretically.
I remembered that there were some banks on the top floors, but I just needed an ATM. I asked around and was sent to the second floor. I remember thinking that it was nonsensical that there weren't any ATMs on the arrivals floor. But I went upstairs anyway. I headed down the long hall, recognizing a drugstore where I usually buy stuff before departing flights. The drugstore was open, but the place where the ATM guard would sit was empty. A man in front of me seemed to have trouble taking out money, and gave up. I should have known better, but I was exhausted and impatient. I picked the HSBC ATM, quickly took out money, and left.
A few days later, my bank emailed me saying my account had been blocked. When I called, they told me that someone had tried multiple times to take out large sums of cash from my account. But going through each transaction with the representative, I told her that the first withdrawal was in fact mine. "Oh, I just wanted to check that," she said. "That type of ATM is associated with fraud." I cut up my ATM card.
Later, numerous people told me they'd also been victims of the same scam at the same ATMs in Galeão, and sent me links to forums--such as this one and this one--with people reporting the same crime starting in 2011 and even allegedly dating back to 2008. Not every single person who uses the ATMs is getting robbed, evidently, but a consistent pattern is clear. These types of scams take place all over the world. But the fact that one of only two sets of freestanding ATMs in an international airport have been used for several years to rob people is something that could theoretically be resolved easily.
***
Before my flight home, I briefly stopped at the drugstore across from the ATMs. I asked one of the cashiers if he ever noticed anything unusual at the ATMs. "Well, you always see all sorts of weird people," he said. I told him about the scams. He didn't seem surprised. "Yeah, I mean, this hall is totally empty," he pointed out. The guard, I noticed, was in his post this time. "The guard isn't always there," the man added. When I left, the guard was talking on his phone.
To be honest, I'm a little tired of these pre-mega-event stories, of these will-Rio-be-ready stories and is-Rio-tourist-friendly stories, and all of that. I'm much more interested in if the UPPs are working, if new transportation projects are going to happen and if they're going to help commuters, if some of the incredible new public works being built will survive in their current form after 2016. (More on that next week.) So consider this one a freebie to all of the journalists looking for a World Cup/Olympics story. Given how and which crimes seem to get the attention of police in Rio, the media might be the easiest way to tackle this one. It shouldn't be that hard to investigate, and both the tourist and civil police should theoretically have records of some of these complaints. Theoretically.
Earlier this month, I reported on Brazil's tomato crisis, with prices of tomatoes and other vegetables rising. Soon after, the international press also began covering this issue (see Beyond Brics, FT, Bloomberg, AP, NPR, and Quartz). There were even reports in the Brazilian press of tomato smuggling across the Argentine border. One of Brazil's most popular TV personalities, Ana Maria Braga, wore a "tomato necklace" on TV and joked she was wearing gold. This weekend, two of Brazil's largest weekly magazines put tomatoes on the front cover. Much of the coverage, both domestic and international, focuses on the threat of inflation, and what rising inflation could mean for next year's presidential election. There's also the issue of consumption. Valor reported last week that due to rising food prices, supermarket sales fell 2.1 percent in February, though families spent 9.3 percent more than in February 2012. In the last week or so, tomato prices have started to go down, though prices of other vegetables--namely onions and potatoes--increased by 15 and 25 percent, respectively. Onions, too, are being smuggled across the Argentine and Paraguayan borders.
To determine what is really going on with food inflation, I talked to São Paulo-based economist Luciano Sobral, also known as the Drunkeynesian, to get his views on whether this a long-term trend, a short-term problem, or a symptom of other economic forces at play.
Tomatoes, onions, and other vegetables and food products have risen
over the last year. There are climatic reasons (drought, rains) and
agricultural reasons (less area planted), but what are the bigger
economic forces at play?
I
don’t think there are other bigger economic forces acting here, since
demand for those items is pretty much stable. As you mentioned, there
was a supply shock caused mainly by climatic reasons (heavy rains in the
Southeast, a severe drought in the Northeast), and since arbitrage is
not possible for several products (there’s no international market, at
least not a liquid one where players can hedge or speculate), prices
skyrocketed. Curiously, the prices of exchange listed agricultural
commodities have been falling consistently since last September, so if
there’s any external factor in foodstuff items it should lead to lower
domestic prices.
How is food inflation going to affect inflation overall? The economy overall?
Of
course the first effect is a spike in headline inflation. The infamous
tomato story caused a frenzy on local media (two of the largest weekly
magazines in Brazil are currently running cover stories about inflation
and food prices), and called attention to a deeper, more structural
problem: headline inflation is so sensitive to food prices because
ex-food inflation has been quite high. Service prices are rising more
than 10 percent per year. There’s a huge adjustment in relative prices going
on, and it’s not favourable to capital or investments. Thus the
conundrum: the current situation is very desirable politically (low
unemployment and real wages rising), but it doesn’t seem sustainable,
since overall profit margins look already quite weak and don’t attract
new private investments. Dilma has the political incentives to postpone
an adjustment until after next year’s elections, but, as a long term
growth strategy, Brazil cannot rely only on state-lead,
profit-insensitive capital investment.
Do you think food-driven inflation will continue into next year? Or is this a short-term issue?
I
don’t see a major global uptrend in food prices, so I’d bet this is a
short-term issue. Shocks related to climate are pretty much random,
impossible to forecast. What’s been more or less established is that
they tend to dissipate quite quickly, as soon as the climate turns favorable
or higher prices attract new producers or importers to the market. An
example: tomato prices hit R$12/kg a couple of weeks ago; this weekend I
bought beautiful tomatoes at a supermarket for less than R$4/kg.
What does the price spike of certain foods reveal about the Brazilian economy?
Despite
all the progress of recent years, Brazil remains a (somewhat) poor and
(very) unequal country. The substantial weight of food prices in the
average consumption basket (and, consequently, in price indexes) is an
evidence of that: everytime certain food prices rise, there’s a national
concern. This is similar to what happens with tortilla prices in Mexico
or rice prices in some poor Asian nations. Another interesting aspect is
the dependence of Brazilian food markets on local producers, since
importing is not a viable emergency solution (think of taxes, red tape,
complicated logistics). This tends to make supply shocks more frequent
and persistent. Finally, it shows the old obsession of the country with
inflation, as if it were part of our collective conscience, and how
there’s little space in current inflation to accommodate shocks within
the established inflation target range (2.5 percent to 6.5 percent, with a center of
4.5 percent). Brazil indeed has an inflation problem, although I don’t think
it’s as dramatic as the media and some economists are painting it; only
it serves as an important alert to more complicated structural issues.
