What kind of Brazil do you want?

Misery, crime and corruption collapse the South American giant. SÃO PAULO – It seems repetitive, but every three or four months we have to talk about Brazil; about its poverty, increase in crime and corruption that still exist in this South American country. An uncertain number of Brazilians fall into extreme poverty every day while the country is torn between political hostility and latent corruption, despite recent advances in the Lava Jato and Petrogate cases. Here in Brazil, the recession is the culprit of these terrible data, in the opinion of those who have studied the development of the economy. “That rise in poverty is explained by the worsening labor market, which has deteriorated recently because everyone is tighter with money. There are more people working less and without a contract,” says economist Fernando Gaiger, who researches poverty and inequality for the Institute of Applied Economic Research. “Someone without a contract loses the job and then the household suffers. Many of them can’t pay for rent or a mortgage and suddenly become street dwellers”. You can see it even walking through any city: there are more homeless people. The effects of the reforms carried out by Temer will not begin to show any changes anytime soon, if they actually have any effect on the economy. The truckers’ strike threatens the stability of Brazil The truckers’ union of Brazil, the country that depends the most on its road system in the world, completed 7 days of a strike that is becoming a national crisis. Throughout the country, there are hospitals that aren’t properly stocked, supermarket shelfs are beginning to run out of supplies and more and more airports are cancelling national and international flights. The truck drivers protest the astronomical price of fuel, something to which the anemic Government of President Michel Temer has not been able to solve. Most people think he  simply does not want to solve. In Brazil, consumers pay anywhere between 38% and 63% in taxes when the purchase most goods, even the basic ones. When filling up a car, a consumer pays an average of 43% in taxes; that is almost half of the final price. Gasoline in Brazil should cost no more than R$ 1,50 per litre, yet people pay around R$ 4,00. The same happens with diesel fuel and etanol. Last week, there were scenes worthy of a country at war. Lines were formed in almost all the country around gas stations that sold their last drops of fuel. Many of them took advantage of the lack of fuel to overcharge drivers. Gas stations were caught charging up to R$ 9,00 per litre of gasoline. Hospitals from several states warned that they were running out of medicines; supermarkets were going empty, even in big cities like Rio de Janeiro. An association of meat exporters estimated that, due to the lack of feed, 1 billion chickens and 20 million pigs were about to die of starvation. The city of São Paulo, the richest in the country, where 12 million people live, declared a state of emergency, which enables it to confiscate private property such as fuel. Here in Brazil, the population feels trapped in this pulse between truckers and the state oil company, Petrobras, that is partially responsible for the price of fuel. In the seven days that the paralysis has lasted the government has not found any solution that opens the way in any of the 534 blockades that exist on the highways of the 25 states. On Friday, Temer threatened to use the Armed Forces to unblock the roads, but that extreme measure was only the last of a series of attempts. On Wednesday night, the government presumed to have convinced Petrobras to lower the price of fuel by at least 20% in the next few days: to the truckers it seemed insufficient, and the actions of the state company collapsed. In total, the Brazilian Stock Exchange fell by 4.3% as a result of that decision, in what was already a bad month for the economy. On Thursday they tried another idea: to lower the price of diesel by 10% in relation to global prices and freeze it until December. The state coffers themselves would be responsible for the difference in price. It did not work either. The unions did not accept it either and yesterday the strike continued and the situation in the cities was beginning to be worrisome. At another time, the government could have artificially modified the price of fuel, but two years ago Temer gave Petrobras the capacity to tax gasoline as it wished. The board decided to be guided by the international oscillation, which lately has risen to 80 dollars a barrel, the highest price since 2014. This reality coupled with a difficult time in general for emerging economies and even worse for the Real, the Brazilian currency, caused further depreciation.

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