Friday, July 21, 2006


Revenue from international travellers is growing

The Central Bank of Brazil (which controls all the flow of foreigner currency in and out of the country) released today some figures about the international tourist flow.

From January to June of 2006, the foreigner travellers spent a total of US$ 2.195 billion in Brazil; this is more than the amount spent in the entire year of 2002 (US$ 1.998 bi) and is nearing the total of 2003 (US$ 2.479 bi).

The figure for 2006 equals a growth of 17.51% over the same period last year.
The Central Bank forecasts a total for 2006 of around US$ 4.5 billion, up from US$ 3.861 bi in 2005 (so far, the highest ever).


Varig is sold

At last, Varig, which until not long ago was the biggest Brazilian air carrier, was sold.

Varig had been facing financial problems for more than a decade. The company was big in the 1980s, but they didn't adapt to the new times. The owners of the company were their own employees, and they were too reluctant to the adoption of modern management practices (e.g., personnel reduction, payments for performance).
In the 1990s, when fresher companies like TAM and GOL entered the market, Varig could not stand the war of prices.

Varig was sold to VarigLog, a subsidiary created by Varig in the 1990s to compete in the market of courier services; ironically, the offspring (managed more professionally) managed to outgrow the mother company.
The company was sold in a Judicial bidding process; there were very few bidders, and some of them were disqualified by the Justice.
In the end, Variglog paid US$20 million in cash, and issued another US$ 485 million in bonus. The new board of directors announced that, of the current 10,000 employees, less than 2,000 should remain. The number of aircrafts and the number of routes to be operated by the new company is still under discussion.

Wednesday, July 19, 2006


Another mega scandal: the "sanguesugas" (leechers)

Another mega-scandal involving Brazilian politicians is in the news.
This time, the case involves ambulances, the federal budget, and corruption.

The problem derives from the way that Budget is voted and executed in Brazil. Every year, the budget is first drafted by the Federal Administration; then it goes to Parliament, where Deputies and Senators propose amendments; however, even if the amendments are passed into law, the Treasury is not obliged to actually release the funds to cover the amendment; the actual release of funds depends, theoretically, on the convenience and importance of the amendment, but, in practice, it depends much more on "political factors".

In this case of Sanguesugas, the scheme was:
a) the owner of an ambulance maker approached Deputies and Senators;
b) the Deputy proposes an amendment, requesting funds for ambulances at his hometown;
c) the owner employed illegal means to: get the funds released (by bribing key people in the Ministries) and sell ambulances by a price way above the market (by defrauding bidding processes);
d) part of the profits was shared with the Deputy who proposed the amendment.

The amount of fraud is into the hundreds of millions of reais.

The Federal Police investigated the case in silent, and last month arrested several people, including the chief of the scheme (the ambulance maker). A Probing Comission was created in the Congress. Investigations (the main accused are collaborating with the Police) indicated that as many as 100 Deputies were involved.

Yesterday, the Supreme Court declared that the name of 56 Federal Deputies and one Senator should be made public. These people are formally indicted of several crimes connected with the scheme. This is the biggest criminal case involving members of Parliament in the History of Brazil.

The only Senator indicted so far is Ney Suassuna, from Paraiba.

These are the 56 Federal Deputies indicted:
1. Paulo Feijó (PSDB-RJ)
2. Paulo Baltazar (PSB-RJ)
3. João Caldas (PL-AL)
4. Cabo Júlio (PMDB-MG)
5. Pedro Henry (PP-MT)
6. Vanderval Santos (PL-SP)
7. Iris Simões (PTB-PR)
8. Benedito Dias (PP-AP)
9. Lino Rossi (PP-MT)
10. Edir de Oliveira (PTB-RS)
11. Tetê Bezerra (PMDB-MT)
12. Fernando Gonçalves (PTB-RJ)
13. Almeida de Jesus (PL-CE)
14. Pastor Amarildo (PSC-TO)
15. Milton Capixaba (PTB-RO)
16. Almir Moura (PL-RJ)
17. Reinaldo Betão (PL-RJ)
18. Isaías Silvestre (PSB-MG)
19. José Militão (PTB-MG)
20. Welington Fagundes (PL-MT)
21. Mário Negromonte (PP-BA)
22. Laura Carneiro (PFL-RJ)
23. Zelinda Novaes (PFL-BA)
24. Vieira Reis (PRB-RJ)
25. Junior Betão (PL-AC)
26. Ribamar Alves (PSB-MA)
27. Eduardo Gomes (PSDB-TO)
28. Eduardo Seabra (PTB-AP)
29. Osmânio Pereira (PTB-MG)
30. Jefferson Campos (PTB-SP)
31. João Batista (PP-SP)
32. Vanderley Assis (PP-SP)
33. João Mendes de Jesus (PSB-RJ)
34. Dr. Heleno (PSC-RJ)
35. Reinaldo Gripp (PL-RJ)
36. José Divino (PRB-RJ)
37. Alceste Almeida (PTB-RR)
38. Marcos Abramo (PP-SP)
39. Nélio Dias (PP-RN)
40. Ricarte de Freitas (PTB-MT)
41. Cleonâncio Fonseca (PP-SE)
42. Benedito de Lira (PP-AL)
43. Reginaldo Germano (PP-BA)
44. Ricardo Estima (PPS-SP)
45. Neuton Lima (PTB-SP)
46. João Corrêa (PMDB-AC)
47. Amauri Gasques (PL-SP)
48. Maurício Rabelo (PL-TO)
49. Coriolano Sales (PFL-BA)
50. Marcelino Fraga (PMDB-ES)
51. Raimundo Santos (PL-PA)
52. Edna Macedo (PTB-SP)
53. Irapuan Teixeira (PP-SP)
54. Itamar Serpa (PSDB-RJ)
55. Enivaldo Ribeiro (PP-PB)
56. Elaine Costa (PTB-RJ)

Friday, July 07, 2006


Candidates to President: personal assets

The Brazilian law demands that every candidate to President of the Republic declares, before the election, their personal assets.
The candidates to the election of October 2006 declared:

Lula, current President, candidate to re-election: R$ 839,000
Geraldo Alckmin, main oposition candidate: R$ 691,000
Heloisa Helena: R$ 121,000
Rui Pimenta: R$ 33,000
Luciano Bivar: R$ 8,7 million
José Maria Eymael: R$ 985,000
Cristovam Buarque: R$ 769,000

The dollar course is approximately US$ 1 = R$ 2.20

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