Brazilian Headlines


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Brazil 2015: infrastructure and the end of the makeshift solutions

One of the biggest challenges the next government – be it Dilma, Aécio, or Campos – will have is facing structural reform once and for all and eliminating makeshift solutions.

Upon assuming the presidency, Dilma Rousseff has placed priority on increasing investments and reducing the “Brazil cost” (custo Brasil). To do so, she produced a structural change in the concession system: instead of the payment for the costly concession, the competition for the lowest rate.

She then began bumping into some of the country’s problem, such as an unbalanced tax system and a lack of a market for long-term investment.


Do not despise the paths cleared by Dilma when she dove into the resumption of investment in infrastructure. It was the change that the country needed for decades.

But the method must be changed. Without opening the discussion, without hearing the parts, without creative solutions, this potential may snatch defeat from the jaws of victory.

Investment Roundup: Energy, Railways & China’s Bold Advances in Latin America

The system has qualities, but proves impractical in situations like the current one, with little rain and clumsy government intervention.

With major hydroelectric plants such as Itaipu, the country managed to develop a power matrix based on renewable sources with a relatively low cost. But a system with these characteristics depends on rainfall. To reduce the vulnerability of this model, many dams were built in the past with reservoirs that collect water for use in years with insufficient rainfall.

[…] the requirements for environmental licensing became more rigid, limiting the areas subject to flooding.

In the Amazon, these restrictions make the new plants operate with the natural flow of rivers. Thus, in the wet season hydroelectric plants operate at full capacity and in the dry season production may grind to a halt.

Lack of project and hasty work threaten construction in Brazil

Experts claim that control agencies check public spending, not technical quality.


China seeks alternative to the Panama Canal

To circumvent US influence, the country supports a project in Nicaragua that will guarantee grain supply.

The size of the project led the Nicaraguan government to approve laws and measures in its favor, with a budget four times the size of the country’s economy.

Crossing in an environmentally protected area is a challenge to the investor

Russia is also eyeing the channel, which can be used as a route to the Valley by supercarriers.

After Africa, China advances on Latin America

“They [China] now also invest in infrastructure, through bids or private agreements between governments, with funding from the Chinese government and participation of Chinese companies”, says Luis Palma Cane (economist).


Xi Jinping [Chinese president] explains that China is also interested in building factories in Latin America in the future.