Alem dos Brics, e muito alem da corrupcao normal: Brasil no Financial Times, diminuido

Sobrou até para os diplomatas lotados em Nova York, não pela corrupção, apenas pelo gosto imoderado de estacionar sem pagar parking, ou em locais proibidos.
Paulo Roberto de Almeida 

Petrobras shows corruption is now a high-stakes game in Brazil
Samantha Pearson
FT, 16/4/2015

In the 1980s, corruption in Brazil was a simple, albeit sweaty, affair. The first challenge for any executive entrusted with paying a bribe was to traipse up and down the streets to find enough black market money dealers willing to sell dollars, explains one former government contractor. In a decade when Brazil changed its currency more often than its president, kickbacks in greenbacks were considered the only ones worth having.

The second challenge was to take the cash to the meeting place, which often involved donning a long winter coat stuffed with banknotes under the tropical sun. “The biggest danger back then was passing out from heat exhaustion,” says the former contractor.

The multibillion-dollar corruption scandal engulfing Brazil’s state-controlled oil company Petrobras could not be more different. With cash allegedly siphoned through more than 300 Swiss bank accounts and laundered via everything from petrol stations to art works, the country’s largest graft scheme is so complex that after a year of investigating, the authorities are only just beginning to understand it.

While the latest scandal has shocked Brazilians and foreign investors alike, this evolution of corruption in Brazil over the past few decades is, in fact, proof of progress, analysts say. As the federal police and prosecution service have gained ever more autonomy and influence since the end of military rule in 1985, corruption rings have been forced to come up with increasingly sophisticated methods to survive.

“Even just 10 years ago, [corruption] was so commonplace that people weren’t even scared of getting caught,” says André Camargo, professor of law at Brazil’s Insper business school.

But while the Petrobras investigation, dubbed “Carwash” by police, may be considered a victory in Brazil’s battle against impunity, it also serves as the clearest compliance warning yet for multinationals operating in the country and other emerging markets.

In Brazil, foreign companies have long faced pressure to pay “grease” payments to speed up regulatory processes or fund bribe paying via third-party consultation services simply to compete with local players. However, as the Petrobras case has shown, the risks of being caught have never been higher, says Edward Jenkins, a British lawyer who advises companies expanding to Brazil as well as the Caribbean.

The Petrobras scandal has already sucked in more foreign companies than any other in Brazilian history, with Rolls-Royce and the Netherlands’ SBM Offshore accused of paying bribes to win contracts at the oil major. Singapore’s Keppel and Sembcorp Marine have also been accused of participating in the bribes-for-contracts scheme at Petrobras’s drilling provider Sete Brasil. Following allegations made by a former Petrobras and Sete Brasil executive, Rolls-Royce has said it will take the necessary action to ensure compliance, SBM Offshore said it is co-operating with the investigation and both Keppel and Semb­corp denied participating in such a scheme.

As emerging markets such as Brazil, India and China make greater efforts to tackle corporate wrongdoing, the US and the UK are also closing in from home, strengthening the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act. Crucially, there is more co-operation between developed and developing markets.

“The advice I give to foreign companies is to play by your home rules or you’re going to get your fingers very badly burnt,” says Mr Jenkins.

However, following such advice is easier said than done in Brazil. While the country’s performance in global corruption indices is not dire — Transparency International ranked Brazil ahead of China and India in 2014, and on a par with Italy — general rule-breaking is endemic at all levels of society.

Studies such as the Americas Barometer survey show Brazilians perceive corruption and rule-bending to be worse than international rankings suggest.

More anecdotal evidence also reveals a widespread disrespect for law and order. A study of parking tickets by US academics Raymond Fisman and Edward Miguel, for example, showed that Brazilian diplomats outperformed all other nationalities in Latin America in their abuse of parking privileges in New York City.

“Corruption is embedded in the culture here and that’s something that’s very hard to change — it’s the Brazilian jeitinho,” says one executive of a Europe-based company in Brazil, referring to the national habit of circumventing rules.

Literally “little way”, the jeitinho in its most innocuous form is considered a positive trait of Brazilian culture because it is an expression of resourcefulness and informality that is often traced back to the country’s mixed heritage and Iberian ancestry.

However, the concept also extends to unethical behaviour such as queue-jumping and illegal practices such as parents bribing driving instructors so their children can pass their tests.

For businesses, the jeitinho is particularly dangerous when it comes to navigating the country’s labyrinthine bureaucracy and tax systems (to comply with the latter, an average company must set aside 2,600 hours a year, according to the World Bank). Inter­mediaries have emerged to help companies cut down on the paperwork for a fee, part of which often falls into the hands of local officials.

It is a vicious circle, whereby so many individuals in positions of power profit from the country’s bureaucracy that legitimate efforts to cut red tape are met with huge resistance. “There are markets where it is humanly impossible to play by the book because the bureaucracy that has been created is so insuperable,” says Insper’s Professor Camargo.

This type of “everyday corruption” is the most problematic for companies operating in emerging markets, writes Ravi Venkatesan, the former chairman of Microsoft India in an article on combating corruption for McKinsey.

The only solution for multinationals is to invest more in compliance in countries such as Brazil. Many make the mistake of allocating budgets for audits and compliance reviews simply in proportion to the revenues of their foreign subsidiaries, says Mr Venkatesan.

With Brazil facing what could be its worst recession in a quarter of a century, country managers may struggle to convince their head offices to invest more there. However, as more foreign companies are sucked into the Petrobras scandal it is becoming clear that multinationals can no longer afford to break the rules either.

“This is an inflection point for Brazil,” says Mark Weinberger, global chairman and chief executive of professional services provider EY. “Companies are figuring out that it’s never worth taking the short cut to be able to compete on a particular project or market opportunity by risking the brand.”

Financial Times: Brasil no ponto de nao retorno? - Samantha Pearson

Brazil: At breaking point
Samantha Pearson
Financial Times, March 20, 2015 6:52 pm

With Petrobras mired in a corruption scandal, President Rousseff hopes an economic boost will lift flagging ratings

Demonstrators rally to protest against the government of president Dilma Rousseff in Copacabana Beach in Rio de Janeiro, Brazil on 15 March, 2015.
Thousands of demonstrators wearing the yellow-green national colours protested Sunday in several cities of Brazil against president Dilma Rousseff, who is facing a complex economic panorama and a political corruption scandal.

Brazilians on Copacabana beach in Rio de Janeiro protest over the government of President Dilma Rousseff, below, and a corruption scandal involving state energy company Petrobras
Emilio Pastore normally spends the weekend visiting his elderly parents or taking a quiet bike ride in the countryside around São Paulo. But last Sunday the 50-year-old systems analyst printed out a banner with the slogan “no more lies” and took to the streets for the first protest of his life.

The multibillion-dollar corruption scandal engulfing state-controlled oil company Petrobras and President Dilma Rousseff’s ruling coalition was too much to bear, he says.

 “Corruption has escalated from random cases to a state strategy — it now seems to be the official source of party funds, from the small-town mayor all the way up to the nation’s president,” he says. “We’ve had enough.”

Among the 1m protesters who joined him on São Paulo’s Paulista Avenue, a woman in her eighties waved a poster calling for the president to “go away”, while chanting crowds draped in Brazilian flags guzzled down beer and popcorn. This is what Brazilians, albeit in their own festive and non-confrontational way, look like when they reach breaking point. “It’s one thing for Brazilians to vote in an election; it’s another thing to take to the streets,” says Fernando Schüler, a political scientist at Insper, a Brazilian business school.

Faced with recession, decade-high inflation, poor public services, a fiscal crisis, water shortages and possible energy rationing, even the most tolerant Brazilians have found it hard to stomach allegations that up to $10bn was stolen from Petrobras to pay bribes and fund political campaigns while Ms Rousseff was chair of the company’s board.

Hundreds of thousands joined protests across Brasília, the country’s capital, and 25 other states on Sunday, making the demonstrations the biggest since those that preceded the impeachment of President Fernando Collor de Mello over corruption in 1992. “We are seeing a shift in the nature of political risk surrounding Brazil,” says Rafael Cortez, a political scientist at Tendências, a consultancy. Ms Rousseff now faces becoming a “lame-duck president” only three months into her second term, he says.

With calls for Ms Rousseff’s own impeachment and a Datafolha poll this week ranking the leftwing leader as the most unpopular president since Mr Collor de Mello, it may appear that history is repeating itself. However, while Ms Rousseff’s approval rating will probably drop below the current 13 per cent as the economy further deteriorates, the world’s second-largest emerging market has come too far to return to the dark days of its past, says João Augusto de Castro Neves of Eurasia Group.

Austerity measures introduced by Joaquim Levy, Brazil’s new market-friendly finance minister, are expected to put the economy — forecast to contract 0.8 per cent this year — on a path back to growth by 2016. Meanwhile, the emergence of the Petrobras scandal in March last year is itself credit to the growing independence of Brazil’s judiciary and public prosecution service.

“There has been undeniable progress . . . despite the feeling that we are back to square one,” says Mr Castro Neves.

Towering above Rio de Janeiro’s historic centre, the concrete Jenga-style building that houses Petrobras’s headquarters has gained an almost mythical status over the past year. After all, what happens within its grimy slatted walls over the next two months could decide Brazil’s immediate future.

Chart

If Petrobras cannot calculate the company’s losses from corruption and convince its auditors PwC to sign off its annual financial statements by the end of May, the world’s most indebted oil major faces technical default. After the company missed third-quarter reporting deadlines, Moody’s says it “does not yet see any assurance that audited statements will be available by any particular date”. Missing the May deadline would break the covenants on its $137bn of debt, prompting a possible bailout and further fiscal deterioration, says Nymia Cortes de Almeida at the rating agency, which downgraded the company to junk in February.

For much of the past decade, some former executives at the New York and São Paulo-listed company allegedly colluded with the country’s top politicians and construction firms to cream up to 3 per cent off Petrobras contracts. This cash, often siphoned off through Swiss bank accounts, was used to pay bribes and finance political campaigns, claim prosecutors. Foreign contractors including Rolls-Royce have also been accused of making illicit payments.

While prosecutors had identified $800m of kickbacks by January, the final amount stolen is likely to be about $10bn given the alleged 3 per cent figure, the time periods involved and the size of Petrobras, which accounts for 10 per cent of all investment in Brazil, says André Gordon of the Amec shareholder association and founder of asset managers GTI.

It is a case that has both appalled and fascinated Brazilians, much like the improbable plots of the country’s soap operas. Many have rejoiced over the authorities’ battle against impunity, devouring media reports on the construction bosses who remain detained in police cells. But fascination has often given way to despair, as it did this week over allegations that Mr Collor de Mello also received cash in the scheme. He has denied the claims.

“There is a sensation that the country is being systematically robbed by the political apparatus,” says Mr Schüler, adding that the investigation comes only a year after politicians were jailed over the Mensalão vote-buying scandal. While that scheme was allegedly operated between 2003 and 2005 by advisers to the then-president Luiz Inácio Lula da Silva, Ms Rousseff’s mentor, he denied any knowledge of it and never faced formal charges.

If the amounts of money involved in the Petrobras scandal are staggering, it is at least partly because there was so much money sloshing through Brazil during the commodity boom, analysts say. In the year since prosecutors arrested Paulo Roberto Costa, their first Petrobras executive-turned-informant, 103 people have been indicted and 33 members of Ms Rousseff’s Workers’ party (PT) and coalition allies are under investigation by the Supreme Court.

While the president has denied any involvement in the scheme and the PT says all the donations were legal, opposition parties have called for Ms Rousseff to be investigated, as critics claim she was either complicit or incompetent.

But impeaching a president is not easy, says Diego Werneck, a law professor at FGV, an academic institution. “Losing the confidence of the people is not enough,” he says. There would have to be evidence she committed a crime, preferably one during her current mandate that resulted in her personal enrichment, he says.

Whatever her faults, the president has never shown much interest in the trappings of wealth. On a trip to Uruguay this month, Ms Rousseff was pictured in a local supermarket buying milk and groceries after reportedly cancelling a dinner date with ministers.

As a Marxist guerrilla in the 1960s, Ms Rousseff probably never imagined that she would depend on a Chicago-trained former banker for survival. During last October’s election, her party demonised the banks. However, her finance minister Mr Levy is now considered the best hope for Brazil’s recovery and that of Ms Rousseff’s own career.

After winning re-election by one of the narrowest margins in Brazilian history, Ms Rousseff made a surprise policy U-turn by hiring Mr Levy and proposing a series of benefit cuts and tax hikes. While Brazil recorded its first primary budget deficit in more than a decade in 2014, Mr Levy has promised a surplus this year of 1.2 per cent of gross domestic product in a bid to restore credibility and attract investment.

Such efforts are long overdue. Like other emerging markets, Brazil has suffered from the end of the commodities supercycle, but years of overspending and state interventionism are also to blame for signs of stagflation. The Petrobras scandal, which has already led to job losses and paralysed the industry, will probably hurt the economy further.

Persuading voters of the need to cut spending at a time when Brazil’s public services are suffering will be a hard sell, analysts say. Horror stories abound about the country’s health services. This week dentists in Brasília posted a video that went viral of them removing 15 maggots from a girl’s gums.

Eurasia’s Mr Castro Neves says the fiscal agenda is still viable, given Ms Rousseff’s recent conciliatory efforts to bring ministers from other parties into her inner circle. The bigger challenge will be political reform — finding a way to remove the structural incentives for corruption and restore Brazilians’ faith in their leaders, analysts say.

During a heated session in Congress on Wednesday, education minister Cid Gomes branded the PT’s allies a bunch of opportunists, yelling out he would rather be considered impolite than an “extortionist”. It was a rare moment of frankness that struck a chord with the disillusioned Brazilians who took to the streets on Sunday.

But in a sign of how far Brazil still has to go to regain their trust, Mr Gomes was promptly fired.

Brazil president's troubles multiply
Mar 18, 2015 - 5:54 pm

The popularity of Brazil's president Dilma Roussef has plummeted only months after she was re-elected in the face of a floundering economy, mass street protests and a corruption scandal. Gideon Rachman discusses what went wrong with Jonathan Wheatley and Samantha Pearson.
http://www.ft.com/intl/cms/s/0/391623f2-ceea-11e4-893d-00144feab7de.html#axzz3UxfevQpC

O Brasil parece querer chatear o mundo - Samantha Pearson (Financial Times)

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A brief history of Brazilian bolshiness

by Samantha Pearson

Beyond Brics, July 31, 2013

Brazil has been putting its weight about again, this time throwing a spanner into the IMF’s efforts to secure an €11bn bailout for Greece from the eurozone countries. Even if Brazil’s economic weight is not what it used to be, it seems it can still rile the old world when it feels like it.

So for the benefit of beyondbrics readers, here is a timeline of Brazilian bolshiness:

• October 2009 – Brazil becomes a net creditor of the IMF for the first time after providing $10bn of financing to help developed nations hit by the financial crisis. In a gleeful press conference, finance minister Guido Mantega, says the “radical change” is proof that Brazil is faring much better in the crisis than other countries.

• May 2010 – Luiz Inácio Lula da Silva, Brazil’s president at the time, takes it upon himself to help Turkey broker a nuclear fuel swap deal with Iran. His cosy relationship with Iran’s Mahmoud Ahmadinejad, including lots of public hugging and hand-holding, is seen as an attack on US foreign policy.

• September 2010 – On a roll now, Brazil’s Mantega declares the world is engaged in a global “currency war”, criticising US monetary stimulus and the subsequent weak dollar for ruining the competitiveness of other countries’ exports. “Everybody wants the US economy to recover, but it does no good at all to just throw dollars from a helicopter,” he declares.

• April 2012 – Mantega takes the face-off between the ‘developed’ and the ‘developing’ world to a new level. He says the Brics countries are working together to elect a candidate from the developing world as president of the World Bank. However, the Russian government soon declares its support for Jim Yong Kim, the US candidate.

• March 2013 – Undeterred, Brazil goes one step further announcing that it and the other Brics countries have agreed to create their own development bank to rival the World Bank and the IMF. However, the countries struggle to agree on the bank’s funding or its location.

• July 2013 – Brazil asks the IMF to change its methodology for calculating nations’ gross debt, complaining it inflates Brazil’s own liabilities. Under the IMF’s methodology, Brazil’s gross debt at the end of last year accounted for 68 per cent of GDP, while the country’s central bank puts the number at 59 per cent.

• July 2013 – Paulo Nogueira Batista, Brazil’s executive director at the IMF, abstains from approving the fund’s new €1.8bn contribution to Greece’s bailout, in a sign of growing frustration over the bailout of debt-ridden Europeans. Nogueira, who also represents 10 nations from Central and South America and the Caribbean, said he was dissatisfied with almost all areas of Greece’s reform programme.
• 
  

Related reading:Latin American countries rail against IMF over Greek bailout, FT
A win for Brazil’s WTO rainbow diplomacy – now for the hard part, FT
Brazil: showing Africa some love, beyondbrics
Brazil file, beyondbrics, 

Cambio no Brasil: cambio?; Brasil?? Muito confuso, diz Financial Times

Eu também nao entendo o que quer, o que diz, o que pretende, para onde vai o ministro Mantega e seus passos erráticos na política economica em geral e na politica cambial em particular.
Mas, quem se importa com isso?
Acho, contudo, que o Ministro Mantega nao vai dar entrevista exclusiva para a Samantha Pearson: ela pega muito no pé dele. Com razao...
Interessante ver os comentários dos leitores a esta matéria do Estadao.
Paulo Roberto de Almeida

Tentar entender o que Mantega quer no câmbio é exaustivo, diz FT

Segundo a publicação, há 3 razões para as mensagens contraditórias do governo. Uma delas: ‘Eles não têm ideia do que estão fazendo’.

31 de janeiro de 2013 | 11h 28

Fernando Nakagawa, correspondente da Agência Estado

LONDRES - Tentar entender o que o ministro da Fazenda, Guido Mantega, quer pode ser "exaustivo", segundo o jornal Financial Times. Em texto publicado no blog sobre mercados emergentes, o BeyondBrics, a publicação diz que esse problema é ainda maior no tema preferido do ministro brasileiro: a chamada "guerra cambial". A reportagem sugere, inclusive, que o recente sobe-e-desce do dólar pode indicar, entre outras coisas, que o governo "não tem ideia do que está fazendo".
O texto cita algumas passagens recentes em que o governo demonstrou desejos distintos sobre o rumo das cotações de câmbio. Até alguns dias atrás, diz o texto, o real seguia relativamente enfraquecido depois de o ministro declarar diversas vezes que o governo estava pronto para corrigir qualquer movimento excessivo na moeda e que um real mais fraco seria favorável à indústria brasileira.
Apesar dessa sinalização de que o governo olhava com simpatia um real fraco, Mantega disse, lembra o texto, que o real permaneceria flutuante "desde que dentro de uma banda apropriada". "Um comentário quase tão sem sentido como a promessa recente do Banco Central de que a inflação convergiria de uma forma não-linear com a meta", diz o texto do FT.
Mas o mesmo governo brasileiro permitiu, afirma o texto, com uma estratégia liderada pelo BC que o real se fortalecesse nos últimos dias abaixo de R$ 2 pela primeira vez desde julho. Após esse sobe-e-desce, diz o blog, o mercado ficou "completamente confuso".
Para a repórter Samantha Pearson, do escritório do FT em São Paulo, "há três explicações possíveis" para as mensagens que parecem contraditórias. A primeira é que o governo brasileiro "quer uma valorização gradual do real para conter a inflação e os avisos de Mantega foram destinados a moderar os movimentos" da moeda norte-americana. A segunda opção é que a equipe econômica pode ter avaliado que o real está "no nível certo" e, então, passaram a ser emitidos sinais contraditórios para "estabilizar a moeda".
Há, porém, uma terceira opção. "Eles não têm ideia do que estão fazendo".
================
 Matéria original do Beyond Brics, Blog do Financial Times:

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Confused about Brazil’s currency war? So are we

Jan 30, 2013 10:40pm by Samantha Pearson

31inShare60

Trying to understand what Guido Mantega is up to can be exhausting, especially when it comes to his favourite topic: currency wars.
The real weakened early on Wednesday after Brazil’s finance minister warned the government was ready to correct any excessive moves in the exchange rate, adding that a weaker currency makes domestic industry more competitive.
Mantega added that the currency would remain free-floating as long as it stayed within an appropriate band – a comment almost as nonsensical as the central bank’s recent promise that inflation would “converge in a non-linear way” with the target.
But then the real trimmed those losses later on Wednesday after the central bank sold dollars with an agreement to repurchase them in two months, rolling over a line worth more than $1bn before it expires this week.
On Tuesday, the central bank allowed the real to strengthen beyond the 2 per dollar level for the first time since July as concerns grow that the weaker currency is making imports more expensive for industry and adding to the country’s inflation problems.
In the end, the real closed Wednesday’s session more or less flat and traders went home thoroughly confused.
It seems there are three possible explanations behind the authorities’ mixed messages:
1. They want a gradual appreciation of the real to curb inflation and Mantega’s warning was intended to moderate any sharp moves on the back of the central bank’s intervention
2. They have decided the real is at the right level and are sending out contradictory signals to stabilise the currency
3. They have no idea what they’re doing.
This from analysts at Bulltick:

Throughout 2012, the authorities had displayed their willingness to defend the BRL against aggressive appreciation pressures via various intervention schemes and capital controls. Then, in mid-December of last year, Brazil reversed some of the capital controls, in an effort to shore up the BRL, which has massively underperformed. The BCB increased the minimum amount on short dollar positions required by local banks to hold (60% reserve requirement). Then the BCB rolled over all maturing (Jan 2013) USD swap positions and the BCB sounded more hawkish (in the latest minutes). However all this may be more of a head-fake or worse, indicative of lack of clear direction on FX/inflation policy, part of reactive policy that has been the pattern over the past year. We think the government will return to a weak(er) BRL policy to prop up growth with the BRL trading on average this year within a range of 1.95-2.0/USD.

Related reading:
Brazil’s currency warriors swap sides, beyondbrics
Brazil drops a capital control, beyondbrics
Brazil: A different kind of currency warrior, beyondbrics
Downturn shakes Brazil from its dream, FT.com

================

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Paulo Pereira

Comentado em: Tentar entender o que Mantega quer no câmbio é exaustivo, diz FT

31 de Janeiro de 2013 | 13h01

Concordo com o FT. A política econômica atual do governo parece quadrilha de festa junina. "olha a cobra!" ai fazem algo "a ponte caiu" ai fazem outra. Não tem planejamento e isso obviamente pressupõe uma estratégia. O governo faz os doze trabalhos de Hércules (impõe goela abaixo mudanças no setor energetico, usa os bancos publico para baixar spread sem olhar a inadimplencia crescente, usa a Petrobras para segurar a inflação etc. Mas não faz a única coisa que precisa. As famosas reformas estruturais. Pode chegar o cambio a 3,00 e o juro a 0,5%. O Brasil não cresce mais do que isso, sem baixar o custo de produção e dar uma segurança ao empresário.

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Zuriel Raasch

Comentado em: Tentar entender o que Mantega quer no câmbio é exaustivo, diz FT

31 de Janeiro de 2013 | 12h58

Para quem se interessar, segue o link do FT: http://blogs.ft.com/beyond-brics/2013/01/30/confused-about-brazils-currency-war-so-are-we/#axzz2JZ6yDm7m Sds!

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Fabio Nogueira

Comentado em: Tentar entender o que Mantega quer no câmbio é exaustivo, diz FT

31 de Janeiro de 2013 | 12h56

Nunca ninguém entendeu o Mantega aqui mesmo no Brasil. Não surpreende que alguém de fora também não o entenda.\

VEJA TAMBÉM

• Mantega e o BC confundem o mercado de câmbio
• Para atrair dólares, governo zera IOF para fundo imobiliário
• Dólar abre o dia em queda atento às novas medidas do governo