São Paulo – Economist Eduardo Gianetti da Fonseca outlined three possible scenarios for Brazil’s economy following the presidential elections due in October this year. A professor at the Brazilian Capital Markets Institute (Ibmec, in the Portuguese acronym) and presidential campaign advisory team member for the political party PSB, which should confirm the former minister Marina Silva as its candidate, Fonseca delivered a lecture at the Arab Brazilian Chamber of Commerce’s offices in São Paulo last Tuesday (19th).

He foresaw similar macro- and microeconomic scenarios in case either opposition candidate wins, Silva or Aécio Neves (PSDB), and two possibilities in case president Dilma Rousseff (PT) is re-elected.

Gianetti said Brazil’s macroeconomic tripod – floating exchange rate, inflation targeting and primary surplus – is extremely fragile and the opposition will need to carry out corrective actions early on in their term in office, should they be elected, so as to reconnect with the economic scenario seen in Fernando Henrique Cardoso’s second term (1999-2002) and Luiz Inácio Lula da Silva’s first term (2003-2006).

“We will have adjustments for two or three quarters,” he said, referring to actions required in order for economic tripod to regain strength.

In the case Rousseff is re-elected, Fonseca said one possibility would be a learning curve, whereby the president would acknowledge her administrative mistakes and work on correcting them, moving back towards the tripod and creating the conditions for private sector investment in infrastructure. Another scenario would be the prevalence of a “I did so well they re-elected me” line of thinking and the ensuing “Argentinization” of Brazil, culminating in a financial crisis.

Fonseca gave an overview of the status of Brazil’s economy and explained the events that led to the current conjuncture. He remarked that the country remained virtually unscathed throughout the 2008/2009 crisis, after a period of growth, social inclusion, rising income, full employment and stable macroeconomics. “This illusion lasted until 2010,” he said.

According to him, the Brazilian economy is now faced with a worrisome combination of three issues: low growth rate, inflation near the top end of the target range and a current account deficit. “Whenever you have low growth, inflation should be well-behaved,” he said.

How has Brazil come to this situation? One factor, he said, was the change in external environment. “Global winds were blowing in our favour,” said Fonseca, citing high prices of the commodities sold by Brazil (like agricultural products and ores) in relation to the cost of products the country imports and the low interest-based monetary policy of developed countries, which caused an influx of capital to the country. Commodities prices have not plummeted, but have not kept rising either, and foreign money is now taking the opposite route.

Another factor he mentioned is Brazil’s fiscal situation, which harks back to the Constitution of 1988, when the State went from centralized to federative and states and municipalities became endowed with public sector attributions. Nonetheless, federal government spending increased instead of declining, and taxes were created under the guise of “contributions,” a gap left open by the Constitution. Brazil’s gross tax burden went from 24% to 25% of the Gross Domestic Product (GDP), in 1988, to a current 36%. “The gross tax burden grew linearly in every administration that followed,” he said.

A large portion of spending goes to Social Security, which currently soaks up 12% of the GDP, according to the economist. “This is an astronomical amount for a country that is still young.” This, according to him, explains Brazil’s low capacity for investing in both physical and human capital. According to him, the country cannot solve the Social Security issue without productivity gains. Each Brazilian needs to be more productive.

Another factor that has caused the economy to deteriorate, according to Fonseca, was the quality of economic policy. According to him, the transition from the FHC administration into Lula’s was conducted in utterly competent fashion. “It was a great, welcome surprise,” he says, noting that the economic tripod was maintained, with a floating exchange rate, an inflation targeting system and fiscal targets. “This pact would only be broken later on, in Lula’s second term, but more so during Rousseff’s administration,” said Fonseca.

 Other factors which undermined the tripod, according to the economist, include a reduced primary surplus, as the government resorted to “creative accounting” such as delaying payments to meet the target, contracting debt on one end to transfer funds to another; the top end of the inflation target, which became the new mid-range, and government-controlled collective transport and fuel prices; and finally, intervention in the foreign exchange market to stave off price hikes. 

According to him, the government started micromanaging, taking the place of the market and picking out sectors to be the “victors.” The economist believes this is a mistaken philosophy. Government measures must be horizontal, i.e. benefit the business environment across the board. This, says Fonseca, causes the market to become distrustful of regulation.

The event was presented and hosted by the Arab Chamber president Marcelo Sallum and former director Mário Rizkallah. It is part of the lecture cycle held by the organization on economics, culture, careers and other subjects.

*Translated by Gabriel Pomerancblum

São Paulo – Economist Eduardo Gianetti da Fonseca outlined three possible scenarios for Brazil’s economy following the presidential elections due in October this year. A professor at the Brazilian Capital Markets Institute (Ibmec, in the Portuguese acronym) and presidential campaign advisory team member for the political party PSB, which should confirm the former minister Marina Silva as its candidate, Fonseca delivered a lecture at the Arab Brazilian Chamber of Commerce’s offices in São Paulo last Tuesday (19th).

He foresaw similar macro- and microeconomic scenarios in case either opposition candidate wins, Silva or Aécio Neves (PSDB), and two possibilities in case president Dilma Rousseff (PT) is re-elected.

Gianetti said Brazil’s macroeconomic tripod – floating exchange rate, inflation targeting and primary surplus – is extremely fragile and the opposition will need to carry out corrective actions early on in their term in office, should they be elected, so as to reconnect with the economic scenario seen in Fernando Henrique Cardoso’s second term (1999-2002) and Luiz Inácio Lula da Silva’s first term (2003-2006).

“We will have adjustments for two or three quarters,” he said, referring to actions required in order for economic tripod to regain strength.

In the case Rousseff is re-elected, Fonseca said one possibility would be a learning curve, whereby the president would acknowledge her administrative mistakes and work on correcting them, moving back towards the tripod and creating the conditions for private sector investment in infrastructure. Another scenario would be the prevalence of a “I did so well they re-elected me” line of thinking and the ensuing “Argentinization” of Brazil, culminating in a financial crisis.

Fonseca gave an overview of the status of Brazil’s economy and explained the events that led to the current conjuncture. He remarked that the country remained virtually unscathed throughout the 2008/2009 crisis, after a period of growth, social inclusion, rising income, full employment and stable macroeconomics. “This illusion lasted until 2010,” he said.

According to him, the Brazilian economy is now faced with a worrisome combination of three issues: low growth rate, inflation near the top end of the target range and a current account deficit. “Whenever you have low growth, inflation should be well-behaved,” he said.

How has Brazil come to this situation? One factor, he said, was the change in external environment. “Global winds were blowing in our favour,” said Fonseca, citing high prices of the commodities sold by Brazil (like agricultural products and ores) in relation to the cost of products the country imports and the low interest-based monetary policy of developed countries, which caused an influx of capital to the country. Commodities prices have not plummeted, but have not kept rising either, and foreign money is now taking the opposite route.

Another factor he mentioned is Brazil’s fiscal situation, which harks back to the Constitution of 1988, when the State went from centralized to federative and states and municipalities became endowed with public sector attributions. Nonetheless, federal government spending increased instead of declining, and taxes were created under the guise of “contributions,” a gap left open by the Constitution. Brazil’s gross tax burden went from 24% to 25% of the Gross Domestic Product (GDP), in 1988, to a current 36%. “The gross tax burden grew linearly in every administration that followed,” he said.

A large portion of spending goes to Social Security, which currently soaks up 12% of the GDP, according to the economist. “This is an astronomical amount for a country that is still young.” This, according to him, explains Brazil’s low capacity for investing in both physical and human capital. According to him, the country cannot solve the Social Security issue without productivity gains. Each Brazilian needs to be more productive.

Another factor that has caused the economy to deteriorate, according to Fonseca, was the quality of economic policy. According to him, the transition from the FHC administration into Lula’s was conducted in utterly competent fashion. “It was a great, welcome surprise,” he says, noting that the economic tripod was maintained, with a floating exchange rate, an inflation targeting system and fiscal targets. “This pact would only be broken later on, in Lula’s second term, but more so during Rousseff’s administration,” said Fonseca.

 Other factors which undermined the tripod, according to the economist, include a reduced primary surplus, as the government resorted to “creative accounting” such as delaying payments to meet the target, contracting debt on one end to transfer funds to another; the top end of the inflation target, which became the new mid-range, and government-controlled collective transport and fuel prices; and finally, intervention in the foreign exchange market to stave off price hikes. 

According to him, the government started micromanaging, taking the place of the market and picking out sectors to be the “victors.” The economist believes this is a mistaken philosophy. Government measures must be horizontal, i.e. benefit the business environment across the board. This, says Fonseca, causes the market to become distrustful of regulation.

The event was presented and hosted by the Arab Chamber president Marcelo Sallum and former director Mário Rizkallah. It is part of the lecture cycle held by the organization on economics, culture, careers and other subjects.

*Translated by Gabriel Pomerancblum

São Paulo – Economist Eduardo Gianetti da Fonseca outlined three possible scenarios for Brazil’s economy following the presidential elections due in October this year. A professor at the Brazilian Capital Markets Institute (Ibmec, in the Portuguese acronym) and presidential campaign advisory team member for the political party PSB, which should confirm the former minister Marina Silva as its candidate, Fonseca delivered a lecture at the Arab Brazilian Chamber of Commerce’s offices in São Paulo last Tuesday (19th).

He foresaw similar macro- and microeconomic scenarios in case either opposition candidate wins, Silva or Aécio Neves (PSDB), and two possibilities in case president Dilma Rousseff (PT) is re-elected.

Gianetti said Brazil’s macroeconomic tripod – floating exchange rate, inflation targeting and primary surplus – is extremely fragile and the opposition will need to carry out corrective actions early on in their term in office, should they be elected, so as to reconnect with the economic scenario seen in Fernando Henrique Cardoso’s second term (1999-2002) and Luiz Inácio Lula da Silva’s first term (2003-2006).

“We will have adjustments for two or three quarters,” he said, referring to actions required in order for economic tripod to regain strength.

In the case Rousseff is re-elected, Fonseca said one possibility would be a learning curve, whereby the president would acknowledge her administrative mistakes and work on correcting them, moving back towards the tripod and creating the conditions for private sector investment in infrastructure. Another scenario would be the prevalence of a “I did so well they re-elected me” line of thinking and the ensuing “Argentinization” of Brazil, culminating in a financial crisis.

Fonseca gave an overview of the status of Brazil’s economy and explained the events that led to the current conjuncture. He remarked that the country remained virtually unscathed throughout the 2008/2009 crisis, after a period of growth, social inclusion, rising income, full employment and stable macroeconomics. “This illusion lasted until 2010,” he said.

According to him, the Brazilian economy is now faced with a worrisome combination of three issues: low growth rate, inflation near the top end of the target range and a current account deficit. “Whenever you have low growth, inflation should be well-behaved,” he said.

How has Brazil come to this situation? One factor, he said, was the change in external environment. “Global winds were blowing in our favour,” said Fonseca, citing high prices of the commodities sold by Brazil (like agricultural products and ores) in relation to the cost of products the country imports and the low interest-based monetary policy of developed countries, which caused an influx of capital to the country. Commodities prices have not plummeted, but have not kept rising either, and foreign money is now taking the opposite route.

Another factor he mentioned is Brazil’s fiscal situation, which harks back to the Constitution of 1988, when the State went from centralized to federative and states and municipalities became endowed with public sector attributions. Nonetheless, federal government spending increased instead of declining, and taxes were created under the guise of “contributions,” a gap left open by the Constitution. Brazil’s gross tax burden went from 24% to 25% of the Gross Domestic Product (GDP), in 1988, to a current 36%. “The gross tax burden grew linearly in every administration that followed,” he said.

A large portion of spending goes to Social Security, which currently soaks up 12% of the GDP, according to the economist. “This is an astronomical amount for a country that is still young.” This, according to him, explains Brazil’s low capacity for investing in both physical and human capital. According to him, the country cannot solve the Social Security issue without productivity gains. Each Brazilian needs to be more productive.

Another factor that has caused the economy to deteriorate, according to Fonseca, was the quality of economic policy. According to him, the transition from the FHC administration into Lula’s was conducted in utterly competent fashion. “It was a great, welcome surprise,” he says, noting that the economic tripod was maintained, with a floating exchange rate, an inflation targeting system and fiscal targets. “This pact would only be broken later on, in Lula’s second term, but more so during Rousseff’s administration,” said Fonseca.

 Other factors which undermined the tripod, according to the economist, include a reduced primary surplus, as the government resorted to “creative accounting” such as delaying payments to meet the target, contracting debt on one end to transfer funds to another; the top end of the inflation target, which became the new mid-range, and government-controlled collective transport and fuel prices; and finally, intervention in the foreign exchange market to stave off price hikes. 

According to him, the government started micromanaging, taking the place of the market and picking out sectors to be the “victors.” The economist believes this is a mistaken philosophy. Government measures must be horizontal, i.e. benefit the business environment across the board. This, says Fonseca, causes the market to become distrustful of regulation.

The event was presented and hosted by the Arab Chamber president Marcelo Sallum and former director Mário Rizkallah. It is part of the lecture cycle held by the organization on economics, culture, careers and other subjects.

*Translated by Gabriel Pomerancblum

São Paulo – Economist Eduardo Gianetti da Fonseca outlined three possible scenarios for Brazil’s economy following the presidential elections due in October this year. A professor at the Brazilian Capital Markets Institute (Ibmec, in the Portuguese acronym) and presidential campaign advisory team member for the political party PSB, which should confirm the former minister Marina Silva as its candidate, Fonseca delivered a lecture at the Arab Brazilian Chamber of Commerce’s offices in São Paulo last Tuesday (19th).

He foresaw similar macro- and microeconomic scenarios in case either opposition candidate wins, Silva or Aécio Neves (PSDB), and two possibilities in case president Dilma Rousseff (PT) is re-elected.

Gianetti said Brazil’s macroeconomic tripod – floating exchange rate, inflation targeting and primary surplus – is extremely fragile and the opposition will need to carry out corrective actions early on in their term in office, should they be elected, so as to reconnect with the economic scenario seen in Fernando Henrique Cardoso’s second term (1999-2002) and Luiz Inácio Lula da Silva’s first term (2003-2006).

“We will have adjustments for two or three quarters,” he said, referring to actions required in order for economic tripod to regain strength.

In the case Rousseff is re-elected, Fonseca said one possibility would be a learning curve, whereby the president would acknowledge her administrative mistakes and work on correcting them, moving back towards the tripod and creating the conditions for private sector investment in infrastructure. Another scenario would be the prevalence of a “I did so well they re-elected me” line of thinking and the ensuing “Argentinization” of Brazil, culminating in a financial crisis.

Fonseca gave an overview of the status of Brazil’s economy and explained the events that led to the current conjuncture. He remarked that the country remained virtually unscathed throughout the 2008/2009 crisis, after a period of growth, social inclusion, rising income, full employment and stable macroeconomics. “This illusion lasted until 2010,” he said.

According to him, the Brazilian economy is now faced with a worrisome combination of three issues: low growth rate, inflation near the top end of the target range and a current account deficit. “Whenever you have low growth, inflation should be well-behaved,” he said.

How has Brazil come to this situation? One factor, he said, was the change in external environment. “Global winds were blowing in our favour,” said Fonseca, citing high prices of the commodities sold by Brazil (like agricultural products and ores) in relation to the cost of products the country imports and the low interest-based monetary policy of developed countries, which caused an influx of capital to the country. Commodities prices have not plummeted, but have not kept rising either, and foreign money is now taking the opposite route.

Another factor he mentioned is Brazil’s fiscal situation, which harks back to the Constitution of 1988, when the State went from centralized to federative and states and municipalities became endowed with public sector attributions. Nonetheless, federal government spending increased instead of declining, and taxes were created under the guise of “contributions,” a gap left open by the Constitution. Brazil’s gross tax burden went from 24% to 25% of the Gross Domestic Product (GDP), in 1988, to a current 36%. “The gross tax burden grew linearly in every administration that followed,” he said.

A large portion of spending goes to Social Security, which currently soaks up 12% of the GDP, according to the economist. “This is an astronomical amount for a country that is still young.” This, according to him, explains Brazil’s low capacity for investing in both physical and human capital. According to him, the country cannot solve the Social Security issue without productivity gains. Each Brazilian needs to be more productive.

Another factor that has caused the economy to deteriorate, according to Fonseca, was the quality of economic policy. According to him, the transition from the FHC administration into Lula’s was conducted in utterly competent fashion. “It was a great, welcome surprise,” he says, noting that the economic tripod was maintained, with a floating exchange rate, an inflation targeting system and fiscal targets. “This pact would only be broken later on, in Lula’s second term, but more so during Rousseff’s administration,” said Fonseca.

 Other factors which undermined the tripod, according to the economist, include a reduced primary surplus, as the government resorted to “creative accounting” such as delaying payments to meet the target, contracting debt on one end to transfer funds to another; the top end of the inflation target, which became the new mid-range, and government-controlled collective transport and fuel prices; and finally, intervention in the foreign exchange market to stave off price hikes. 

According to him, the government started micromanaging, taking the place of the market and picking out sectors to be the “victors.” The economist believes this is a mistaken philosophy. Government measures must be horizontal, i.e. benefit the business environment across the board. This, says Fonseca, causes the market to become distrustful of regulation.

The event was presented and hosted by the Arab Chamber president Marcelo Sallum and former director Mário Rizkallah. It is part of the lecture cycle held by the organization on economics, culture, careers and other subjects.

*Translated by Gabriel Pomerancblum

Brasília – The number of people in the world who require humanitarian aid has never been so high in history. So has warned the United Nations Office for the Coordination of Humanitarian Affairs (Ocha). On this Tuesday (19th), World Humanitarian Day, the organization sets out to raise awareness to humanitarian issues and international cooperation efforts to support people in situations of extreme vulnerability.

The date marks the worst attack ever to a UN building, 11 years ago in Baghdad. The attack caused the deaths of 22 employees, including Brazil’s Sergio Vieira de Mello, then the special representative of the UN secretary general in Iraq.

According to the Ocha, this is a day for remembering all the people who have lost their lives while performing humanitarian services and to celebrate the spirit that inspires said work around the world. “Thousands of people around the globe are doing amazing work every day, but unfortunately some pay too high a price. On this World Humanitarian Day, we honour these people who have faced danger to help the neediest.”

One of the countries that require humanitarian aid the most today, according to the UN, is Syria, where nearly half the population – 10.8 million people – needs assistance. The scenario is considered the main humanitarian crisis in the world today, since the struggle between government forces and opposing groups makes working in the region difficult.

In Brasília, the date will be marked by the launch of a postage stamp honouring Sergio Vieira de Mello. In Mogadishu, Somalia, a 5 kilometre trek/race will take place. In London, England, a crown of flowers will be placed at the Westminster Abbey. The UN should release an overview of the humanitarian scenario worldwide.

Furthermore, Doctors Without Borders (MSF, in the French acronym) warns of the Ebola outbreak in Sierra Leone, Liberia and Guinea. A total of 675 agents are providing assistance to the victims and the organization says these countries need further aid. “More professionals to “get their hands dirty’ are crucial in order to help implement and develop new approaches and strategies,” the organization has said in a press release.

MSF has added that it needs not only epidemiologists, physicians and Ebola specialists, but also people with backgrounds in disaster management. As all health services turn to fighting the spread of the virus, basic attention is put on the back burner. According to the organization, this may cause an increase in deaths by common causes such as malaria and diarrhoea.

*Translated by Gabriel Pomerancblum

São Paulo – Agrícola Famosa will start shipping its current fruit crop to the Arab countries in September. The company is based in Icapuí, in Brazil’s Ceará state, and sells approximately ten containers a week to Saudi Arabia and the United Arab Emirates. “This is the third crop we sell to these countries,” says company partner Luiz Roberto Barcelos. The enterprise sells mostly melon and watermelon.

Sales to the Middle East still pale in comparison to Agrícola Famosa’s total weekly export volume, which is 300 containers. But Barcelos believes in the market’s potential. “We are new to this market, but it holds great promise, what with its hot weather and widespread consumption of the fruits we sell,” says Barcelos regarding melons and watermelons, more widely consumed in high temperature places.

The company first entered the Arab market by taking part in overseas promotion programs of the Brazilian Export and Investment Promotion Agency (Apex-Brasil) and via a trader in Holland who occasionally sold Agrícola Famosa fruit to the Arab countries. Barcelos believes exports to Arabs can increase to thirty 40-foot containers a week within five years.

Presently, Agrícola Famosa’s premier foreign destination is Europe, which accounts for over 90% of sales. The company sells to England, Holland and Spain. Annual output is roughly 150,000 tonnes of fruit and approximately 60% is shipped abroad. Barcelos and the company’s other founding partner, Carlo Borro, both have backgrounds in trading companies. The company currently has two other partners, Richard Müller and Marconi Lima.

Large business

Agrícola Famosa was founded in 1995 and began exporting in 2000. The company owns eight farms in the states of Ceará and Rio Grande do Norte, and only sells its own production. Its farmed area spans 8,000 hectares, of which 70% are in Ceará and 30% are in Rio Grande do Norte. Of these, 7,000 hectares are used for growing watermelon and melon. The company is also diversifying and investing in banana, papaya, passion fruit, pineapple, plus the vegetable asparagus.

The company is known for the fruit production technology it employs. Its harvesting techniques include dripping irrigation, nutrient-enhanced irrigation (rather than just water) and biological pest control with reduced usage of agrochemicals. During processing, the Brix system measures the rate of sugar the fruits contain. In order to be packaged, fruits must contain at least ten degrees Brix of sugar. The company also offers a Premium line with 12 degrees Brix.

Agrícola Famosa
Telephone: (+55 85) 33245038
Website: www.agricolafamosa.com.br

*Translated by Gabriel Pomerancblum