Monthly Archives: December 2012

Brazilian taxes

Gregory Michener, an Assistant Professor of political science and administration at the Fundaçao Getulio Vargas (EBAPE) in Rio de Janeiro, has an excellent piece on the Al Jazeera website explaining new tax transparency laws in Brazil.
Some of the key points to take from Michener’s piece are the volume of taxes collected in Brazil — about $850 billion each year — and the reliance on value added taxes rather than income tax. This means that a huge proportion of the funds raised by the Brazilian state come through regressive taxation programs that artificially raise the cost of goods and services for Brazil’s lower classes. Then there is the cost of collecting and remitting these taxes.

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Corruption, Brazil and governments of the left and right

If you’re following Brazilian politics you know that a number of very uncomfortable questions are being asked about the Worker’s Party (PT — Partido dos Trabalhadores), Lula’s former inner coterie, former president Lula himself, and corruption. The organic intellectuals, to use a term that the Gramscians on the left in the PT might like, are kicking into high gear and trying to provide a justification that will wipe away some of the cloying mud that is starting to stick to their side’s public image.

Carlos Alberto Sardenberg has just published a penetrating OpEd in the Rio de Janeiro newspaper O Globo that takes on these arguments with a very critical eye. The Portuguese version is linked here. (A quick Google translation is below because it is the holiday season… not fully satisfying, but it gives a sense of the piece’s content). Where all this will lead is an interesting subject for debate, and one that is very much vibrant and alive at the moment. What might be most interesting to watch is how Dilma will handle a potential maelstrom of corruption allegations and investigations that directly implicate her patron, Lula. So far she’s let Lula hold-overs caught on corruption charges swing in the wind. Such an approach might not be so easy with an ex-president who was instrumental in her election. As Sardenberg notes, like Lula she didn’t win election in the first round, but had to go to a second-round run-off.

Robbing for the people

Author (s): Carlos Alberto Sardenberg
O Globo – 20/12/2012
Intellectuals linked to the PT are flirting with a new theory to deal with the monthly allowance and other episodes like, would be inevitable, and even necessary, to steal a good popular government.

This is a clear response to the weight of events. Lifter inmates, their friends and dedicated Shiites, anyone with a minimum of apprenticeship feels comfortable with the story of the “farce of media and judiciary.”

If, however, there is evidence that public money was stolen and that political support was bought with public money, they have two options: either disembark from a heroic project that turned banditry or, well, join the thesis that all government steals, but the leftist steal and do less to include the poor.

We have seen two recent manifestations of this supposed new theory. In “Leaf”, Fernanda Torres in defense of Dirceu, drew inspiration from Shakespeare to speculate: maybe impossible to govern without violating the law.

In the “Value” Renato Janine Ribeiro wrote two columns to complete: Communist revolutionaries do not steal, steal reformist leftists once in government, but “might” have to do this to ensure the social inclusion policies.

Lifter false theoretical sophistication, this is the update very old thing. Yes, the reader guessed it: the staff are retrieving the “steals but does” created by ademaristas in the 50s. Now is the “steals but distributed.”

Nor is it surprising. Also in the recent election period, Marilena Chauí Maluf had placed on the list of mayors paulistanos filmmakers works in group Faria Lima, and out of the class of thieves.

It is so because: Dirceu is not corrupt, or gangster – but corruption and participated in the gang because if he did not, would not apply as the program’s popular PT.

How do you get this amazing stop-gap theory? Fernanda Torres offers a clue when he comments that the PT is taken as the party of the Brazilian people. Now, it follows, if the elites are a bunch of thieves acting against the people, what’s wrong to steal “for the people”?

Renato Janine Ribeiro works on the same theory, adding cases of leftist governments succeed and corrupt. It is not clear whether they are successful “despite” corrupt or, rather, for being corrupt. But for this last thesis is that the author leans.

It makes sense, of course. Begins is not true that every Conservative government is against the people and corrupt. Thatcher and Reagan examples maximum right, not robbed and brought great prosperity and welfare to its people. Here among us, and to go deep, Castello Branco and Medici also not robbed and their administrations brought growth and income.

On the other hand, the PT is not the people. Represents part of the people, the majority in the last three presidential elections. But attention has never won in the first round and opponents always have at least 40%. And in the first round of 2010, Serra and Marina did 53% of the votes.

Therefore, in democracies the government can not do everything, you have to respect the minority and this is done by respecting the laws, including the prohibition of stealing. And by respect for public opinion, expressed, among other ways, by the free press.

Why do not tolerate these limitations, the authoritarian parties, right and left, impose or try to impose dictatorships, explicit or disguised. They think that because they are the legitimate expression of the people, everything can.

So we fall back into old thesis: the ends justify the means, steal and murder.

Renato Janine Ribeiro says that Communist regimes have committed the sin of extreme physical violence, eliminating millions. But they were ethically pure, argues: liked limousines and dachas, but not put public money in his pocket. (By the way, take note here: this is a preview for a possible defense of Lula, when they begin to show signs that the former president and his family abused more perks than you know).

As communists, we say, were not “pure” by virtue but by impossibility. There was no private property, so that the corrupt were unable to build personal wealth. They stole money from his pocket and reserving part of the apparatus of the state, while the people they represented starved. Pure?

Notice: In China, a mixture of communism and capitalism, leaders and their families amassed, yes, large personal fortunes.

Returning to our Brazilian case, let’s speak frankly, no one needs to be a thief of public money to distribute Bolsa Família and raise the minimum wage.

They want it all?

Dilma can approve the MP ensures that a fall in electricity bills. The National Electricity System Operator says there will be more blackouts because there is no way to avoid them without investments that require higher fares.

That is, the account will be cheaper in compensation vai outa

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Brazil’s big universities and funding

Brazil is full of top notch researchers and very well endowed universities and funding agencies. If you’re in the higher education field, look for partnerships. Brazil is open for business. A good sense of what is possible is provided by this article from the Times Higher Education Supplement.

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Research fellowship opportunity in Rio de Janeiro

The BRICS Policy Center, located in Rio de Janeiro, Brazil is accepting applications for Visiting Fellows to conduct research on topics related to the Center’s activities.   Fellows will stay in Rio de Janeiro during the time of the fellowship (maximum 01 month; dates are flexible but the fellowship must take place between the following dates: November 2012 – December 2012 or February 2013 – May 2013) and will be provided with a stipend and a working space at the Center.

More details here.

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Andrade Gutierrez — big Brazilian business in international construction

Brazil is often associated with agroindustrial business and resource extraction. The aspect of Brazil’s industrial development and internationalization is the size, scale and complexity of its construction industry, with a host of major firms working throughout the world. One of these firms, collectively known as the empreteiras, is Andrade Gutierrez, and has a quick interview with João Martins, the firm’s business director, that gives a quick peak into what the company is up to.

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The challenge of education reform in Brazil

Amidst the fanfare surrounding President Dilma Rousseff’s “Science Without Borders” program, which has universities around the world positively salivating at the potential student income and collaborative funding possibilities, questions about how to improve Brazil’s public schools at the primary and secondary level are getting overlooked. The scale of the challenge is vast. For students and their families a central problem is how to document the necessary tasks and maintain political pressure from the grassroots level through the highest offices for effective reform. Interestingly, it looks like the students themselves have decided to use social media to shine a torch on inconvenient realities. Mac Magnolis, columnist with Newsweek, has an interesting piece on Isadora Faber and her project cataloging the issues at her school. It is worth a read and points to the size of the challenge that comes with efforts to reform Brazil’s schools — throwing money at it is not going to be enough to conquer the challenge.

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Alberto O. Hirschman, 1905-2012

Professor Albert O. Hirschman, one of the most influential scholars on the politics and economics of Latin America, passed away this week in New Jersey. Some of his concepts such as “exit, voice and loyalty” have entered so deeply into the wider intellectual psyche that they are now often used without conscious thought about their origins. The Institute of Advanced Studies in Princeton, New Jersey has published the following obituary:

Albert O. Hirschman 1915–2012

Albert Hirschman in 1962 in Colombia (Photo by Hernán Díaz)
Princeton, NJ – Wednesday, December 12, 2012

Renowned social scientist Albert O. Hirschman, whose highly influential work in economics and politics in developing countries has had a profound impact on economic thought and practice in the United States and beyond, died at the age of 97 on December 10 at Greenwood House in Ewing Township, N.J. Hirschman was Professor Emeritus in the School of Social Science at the Institute for Advanced Study, where he had served on the Faculty since 1974.

“Albert Hirschman developed innovative methods for promoting economic and social growth through his study of the intellectual underpinnings of economic policies and political democracy,” said Robbert Dijkgraaf, Director and Leon Levy Professor at the Institute. “An impassioned observer who sought to understand the world as well as change it, Albert will be sorely missed by the Institute community and by the international community at large where his voice has influenced and guided advancement for more than half a century.”

Over the course of his long and extraordinarily productive career, Hirschman earned a reputation for progressive, lucid and brilliantly argued contributions to economics, the history of ideas and the social sciences. He explored a vast range of topics, inspired by the complexity of human behavior and social reality rather than by traditional economic models. He applied a subtle and iconoclastic perspective to reappraising conventional wisdom, resulting in original work that was a constant stimulus to critical thought in the social sciences. In a 1993 interview with Carmine Donzelli, Hirschman noted, “The idea of trespassing is basic to my thinking. Attempts to confine me to a specific area make me unhappy. When it seems that an idea can be verified in another field, then I am happy to venture in this direction. I believe this is a simple and useful way of discovering ‘related’ topics.”

Born in Berlin on April 7, 1915, Hirschman left Germany in 1933 for France, where he studied economics, finance and accounting. In 1935, he received a one-year fellowship at the London School of Economics. From London he went to Barcelona to fight in the Spanish Civil War, saying, “I could not just sit and look on without doing anything.”

He completed his studies in Italy at the University of Trieste, where he received a doctorate in economics in 1938. Racial laws enacted by Mussolini compelled Hirschman to return to Paris, where he produced his first economic writings and reports, marking the beginning of a prolific publication record. In his numerous books and articles since that time, he continued to explore the complex relationships between economics, politics, social structures, values and behavior.

Hirschman volunteered for service in the French Army and was enlisted in 1939. With the collapse of the French Army in 1940, he fled to the south of France. There he met Varian Fry, an American who had come to Marseille to organize a rescue operation to try to save the lives of endangered refugees, including Marc Chagall, Max Ernst, André Breton and Marcel Duchamp. Fry needed a close assistant, and he found one in Hirschman, whom Fry dubbed “Beamish” for his unfailing optimism during this especially dark and dangerous time. Hirschman traded currency on the black market, obtained forged documents and passports, devised ways to transmit messages by concealing strips of paper in toothpaste tubes and arranged for ships to transport—often illegally—many of the refugees. He personally explored escape routes over the Pyrenees into Spain. Eventually, the police found Beamish’s trail, so Hirschman joined the refugee flow across the mountains. By the time the operation closed down in September 1941, when the French expelled Varian Fry, his group had helped some 2,000 people escape from France. The United States government recognized the Varian Fry group in 1991 for its heroic accomplishments.

Hirschman immigrated to the United States in 1941 with the help of a Rockefeller Foundation fellowship at the University of California, Berkeley. At Berkeley, he met and married Sarah Chapro, a fellow European émigré who was earning her master’s degree in French literature. In March 1943, Hirschman enlisted in the U.S. Army and was sent to North Africa and Italy as part of the Office of Strategic Services and served as an interpreter for a German general in one of the earliest World War II criminal trials. With the war’s end, the Hirschmans settled in Washington, where Albert worked for the Federal Reserve Board on European reconstruction, focusing on new initiatives within the Marshall Plan agency.

In 1952, they moved to South America, where Hirschman worked as an economic adviser to the country of Colombia. The subsequent four years there inspired his vision of economic development as a sequential and unbalanced process. In Colombia, he encountered a major intellectual challenge: not so much the problem of poverty itself, but questions about the reasons for poverty and the search for strategies to diminish its effects. This led to Hirschman’s growing realization that economics needed to draw on moral imperatives and goals as well as on a complex and ever-changing reality. Hirschman returned to the United States in 1956 and began his academic career, which included positions at Yale, Columbia and Harvard Universities. In 1974, he became a Professor at the Institute, where he joined Clifford Geertz in creating the School of Social Science. He became Professor Emeritus in 1985. Among his pioneering books are The Strategy of Economic Development (1958); Journeys Toward Progress: Studies of Economic Policy-Making in Latin America (1963); Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States (1970); The Passions and the Interests: Political Arguments for Capitalism before Its Triumph (1977); and The Rhetoric of Reaction: Perversity, Futility, Jeopardy (1991). Throughout his career, he authored dozens of illuminating essays, which provided critical commentary on economic change and growth in Latin America as well as on the shifting landscape of the social sciences.

It was at the Institute that he and Professor Geertz created a unique forum for the social sciences. In seeking to bridge the divides between increasingly professionalized disciplines, they favored a more “interpretive style,” a term which eventually acquired multiple meanings—not all of them consistent with Hirschman and Geertz’s original purpose to explore the interaction between culture, politics and economics. “There is no doubt,” says Jeremy Adelman, Princeton University historian and author of a forthcoming biography of Hirschman, “that Hirschman’s time at the Institute allowed him to become one of the great sages of our times. His unusual background, combination of intellectual traditions and ironic disposition were combined to yield some of the classic works of the social sciences.”

Joan Wallach Scott, Harold F. Linder Professor in the School of Social Science, added, “Albert’s time at the Institute not only advanced his own work, but had a remarkable effect on the scholars who came into contact with him. His generosity, his wry humor and vivid intelligence, his gift for sociability and his genuine interest in the thoughts of others inspired generations of social scientists to think outside the boundaries of the received wisdom in their fields.”

Hirschman was widely recognized for his work and was the recipient of many prizes and honors, including the Talcott Parsons Prize for Social Science, presented by the American Academy of Arts and Sciences in 1983; the Kalman H. Silvert Award of the Latin American Studies Association in 1986; the Toynbee Prize in 1997; the Thomas Jefferson Medal of the American Philosophical Society in 1998; and the Benjamin E. Lippincott Award of the American Political Science Association in 2003. In 2007, the Social Science Research Council established an annual prize in Hirschman’s honor. The Global Development and Environment Institute at Tufts University selected Hirschman as a recipient of the 2013 Leontief Prize for Advancing the Frontiers of Economic Thought for his critical role in crossing disciplines to forge new theories and policies to promote international development. In honor of Hirschman’s exceptional contributions to economic thought, the Institute created the Albert O. Hirschman Professorship in the School of Social Science in 1998.

Hirschman was a member of the American Academy of Arts and Sciences, the American Philosophical Society and the National Academy of Sciences and was named a Distinguished Fellow of the American Economic Association. He was a foreign member of the Accademia Nazionale dei Lincei and a Corresponding Fellow of the British Academy. He received the Order of San Carlos from Colombia in 1995, the National Order of the Southern Cross from Brazil in 2000, conferred by his long-time friend and collaborator, President Fernando Henrique Cardoso and the Order of Bernardo O’Higgins from Chile in 2005.

Hirschman is survived by his daughter, Katia Salomon of Paris; two sons-in-law, Alain Salomon and Peter Gourevitch; four grandchildren, Lara Salomon Pawlicz, Grégoire Salomon and Alex and Nick Hirschman Gourevitch; and nine great grandchildren, Hannah, Rebecca, Isaac, Eva, Rachel, Olivia, Ezra, Theodore and Zackary. He was predeceased by a daughter, Lisa Hirschman Gourevitch, in 1999, and by his wife of 70 years, Sarah Hirschman, founder of People & Stories/Gente y Cuentos, in January of 2012.

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Peru and Colombia ranked as top investment destinations in Latin America

Peru and Colombia have been ranked by the consulting firm Price Waterhouse Coopers as the two best destinations for investment in the region, outranking Brazil and Chile. PWC’s survey takes into account the views of business leaders and charts the economic takeoff in both countries.



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The PRI returns to Mexico: first week in power

On watching Enrique Peña Nieto’s swearing in ceremony last December 1st, one could have been mistaken for thinking that Mexico’s presidential transition was going off without a hitch. Peña Nieto certainly enjoyed a much more civil reception from Mexico’s Congress compared with the cacophony of dissent that characterised his predecessor Felipe Calderon’s inauguration ceremony.

Indeed, the PRI  party managed to sail into the presidency and within a day of taking power had already announced the signing of a major agreement (“Pacto por Mexico”) among the three major political parties (PRI, PAN, PRD). The agreement sets out 95 commitments on a wide ranging set of issues including universal health cover, educational reform, human rights and victims’ reparation, community participation and public security reforms to combat violence, reform of PEMEX to raise productivity, among other issues. So, broadly speaking, it seems that the PRI had come up with a deal that no other party could refuse. This is the PRI, after all – they know how to negotiate and make everyone happy – they did that for 71 years up until 2000, to the point where this period of Mexico’s history was dubbed the “perfect dictatorship” by Nobel author Mario Vargas Llosa.  In 2012, with a harrowing toll of violence that has seen almost 80,000 deaths and 30,000 disappeared in six short years, some analysts have commented that perhaps the public was fed up with what they saw as an inept government and would much prefer to return to the well-oiled machine of the PRI, even if that meant democracy losing out. And that is what happened – after 12 years in power, the PAN party was booted out and the PRI came back in.

Enrique Peña Nieto waltzed into power after a seemingly effortless defeat of a legal challenge to his presidency – in September the electoral tribunal struck down significant evidence by opposition parties that the PRI had used extensive vote-buying tactics, media manipulation and voter coercion. Luckily for Mr. Peña Nieto this evidence did not seem enough for the judges or electoral commissioners to be convinced, who nevertheless later quickly ordered the election ballots to be destroyed in order to avoid any confusion.

So, with dissent having been dealt with, the return to power secured, there was only one thing missing to make this a real PRI entrance – and that was a showdown between police and the public.


Photo: M. Mora                                                           Photo: D. Jaramillo

The new president’s swearing-in-ceremony was greeted by  initially peaceful demonstrations against what protestors were calling the “imposition” of the PRI. Eyewitness accounts tell how the protest soon became ugly, however, as a number of masked demonstrators in khaki pants, black shirts and gloves started to filter into streets, ready for a fight, fitted with gas masks, burning property and throwing molotov cocktails. It didn’t take long for the violence to escalate and for the riot police to react heavy handedly, at times using excessive force against those caught in the melee and launching tear gas at close range. While some were quick to blame the student movement “Yosoy132” (I am the 132nd) for the violence, this student movement (which had been responsible for questioning the legitimacy of the elections and the manipulation of the media) firmly distanced itself from the violence and was able to link the combative actions to non-associated groups. It is unclear how the violence got so out of hand, however a number of commentators were not ruling out the possibility that violent elements had been deliberately planted in the streets to provoke chaos and thus enable and legitimate a heavy police crackdown. The Reforma newspaper published interviews on the following Monday reporting that some participants had been paid 300 pesos each to deliberately stir up violence on the streets.

It is difficult to assess these confusing narratives, however this sort of tactic is seen as an eery throwback to some of the PRI clashes with students in the 1960s and 70s and it certainly wouldn’t be the first time that a PRI government has been associated with repressive responses to civil unrest (take the 2006 Atenco operation under Enrique Pena Nieto’s own government in the State of Mexico as an example, or Ulises Ruiz’s government in the state of Oaxaca in the same year). Certainly the PRI has shown itself skilfull at breaking the will of social movements that dissent against it. Whatever the assessment of the PRI’s return to power, one cannot help notice that in comparison to the 2006 elections which were much more polemical, with only 0.56% separating the two candidates and half a million people camping out in the streets in protest, this last week in Mexico City has seen more violent confrontations. Outgoing Mayor of Mexico City Marcelo Ebrard spoke furiously to the media about the violence on Mexico City’s streets – he mentioned that Mexico City was usually a sphere of peace within the country, and how could these violent clashes take place? Some will argue that these responses are linked with the PRI and its ways. Six years ago there were 400,00 people camping out in the streets in protest against Calderon’s presidency, but not one window was broken or property was burned.


Photos: M. Mora

On Dec 1 and 2 initially over 100 people were detained by police during the protests .  A number of these detainees were simply in the wrong place at the wrong time, and picked up off the street. The final number then went down to 70 detainees, and 56 were just released yesterday. Amnesty International and other human rights groups have expressed their concern about the actions of law enforcement authorities surrounding these street protests, and have called for full investigations.

Week 2 of the PRI’s return to power and new educational reforms are on the agenda. There are a number of issues hanging in the balance and Mexico has a lot of challenges ahead in order to realise its full potential. Time to watch and see.

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IMF’s new take on Colombia

In days gone by a visit to Bogotá from the IMF head would be the cause for anti-imperialist teeth-gnashing and worries that a new round of austerity was on its way. Not anymore, reports IMF managing director Chritine Lagarde is in Colombia for what Colombia president Juan Manuel Santos is describing as a ‘courtesy call’. For  her part Lagarde has been quite clear that Colombia is now a country that can provide assistance and services to the IMF, not the reverse. This makes sense. The Colombia economy is booming and the security situation appears to be set for a relatively amicable end.

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