Optimism (in California) about Brazil: A Paradox – BayBrazil and 4th US-Brazil Innovation Summit

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Margarise Correa and Innovative Friends at BayBrazil Annual Conference Sept. 21, 2017 Photo by author.

 

While President Temer says Brazil is turning the corner and as Finance Minister Henrique Meirelles jockeys for a possible run for President in 2018 bragging in international meetings that Brazil has its lowest inflation in years and the economy is starting to grow after almost 3 straight years of recession. Indeed, the Brazilian BOVESPA is at record highs and the international investment community is beginning to see opportunity all over. With a broken economy, there are attractive valuations and the post-PT government is breaking down the national populist restrictions on oil and other natural resources. Still on the ground, things are bleak. Unemployment has barely budged. The state has resources only for political bargaining to guarantee that Temer finishes his mandate and all social and economic projects that were suppose to help the less fortunate have lost resources or are being dismantled.

In this scenario, it is curious and a bit paradoxical to partake in events that reflect favorably and show optimism for Brazil. I have attended all but one of the Bay Brazil Conferences that have been held in Silicon Valley over the past six years. Margarise Correa, the founder and catalyst for many a Brazil-Silicon Valley connection, and her staff, consistently put together an excellent event with an A list of speakers that always have strong and sometimes surprising connections to Brazil. Many are aware that Facebook’s Eduardo Saverin is from Brazil, but did you know Instagram founder Michael Krieger also grew up in Sao Paulo? This year’s speaker lineup was not an exception, as can be seen from the program: http://www.baybrazilconference.org/#agenda

Silicon Valley nests venture capital and while Brazil is always a challenge, VC firms seek talent, innovation, entrepreneurship and marketing that will lead to profits. In this search, there is no correlation between growth of GDP, political stability, and democracy and VC investment. So Brazil’s macro level crisis is of little import and money will flow where investors find a deal no matter the political economic situation.   This year’s event once again showed deals in Brazil and a growing maturity of Brazil’s VC environment. Since the early 2000’s, Brazil has completed numerous cycles of VC funding and the infrastructure for VC investment is favorable. We find a thriving VC community, accelerators, service providers, mentorship organizations, cloud services, corporate support and perhaps most important investors and success stories.

Fintech (High Tech Finance) was this year’s standout sector at Bay Brazil. The basic idea behind FINTECH is that the Brazilian banking and financial market while powerful; it is also replete with inefficiencies and therefore ripe for challenges and changes. The sector is notoriously concentrated and even oligopolistic with high spreads on some of the world’s highest interest rate and outstanding profit margins. The Fintech sector recognizes inefficiencies in the banks and is entering the sector offering major reductions in the cost of credit or funds by taking advantage of the Internet, reliable databases, robust platforms and the ability to evaluate potential clients in an expedited fashion that banks cannot match. Fintechs have found a niche in Brazil (reportedly the world’s second largest lending market) by offering money at a much lower cost and more quickly than the banks. The bank reaction has involved stages ranging from rejection, awareness, engagement, and finally collaboration and acquisition. Along this line, it is perhaps worthwhile to note that Christine LaGarde, the IMF General Director, recently questioned the future of banks with the emergence of electronic currencies and fintech endeavors. So Brazilian banks need to be aware that they also face the tech redefinition that has hit many other industries, i.e. hotels, taxis, travel agencies, newspapers, books and manufacturing, etc.

Bay Brazil and Silicon Valley thrive on innovation and by rare coincidence, the US based Council on Competiveness together with Brazil’s Confederacao Nacional de Industria and the University of California San Diego held their 4th US-Brazil Innovation Summit in San Diego. (www.compete.org/programs/compete-global/26-us-brazil-summit)

Inevitably, there was overlap between the two events. The Innovation Summit like BayBrazil emphasized the positive synergy between Brazil and the USA at government, institutional, entrepreneurial and individual levels. Like BayBrazil, the Innovation Summit served to catalyze interactions between innovators, entrepreneurs and the business of making products for national and international markets. Both forums provided excellent opportunities for sharing ideas and showing positive initiatives, incentives and exchanges in both countries. The forums projected positive developments in the Brazilian economy in spite of the political economic crisis and lack of governmental legitimacy in the eyes of the population.

The optimism and, at times boosterish nature inherent in business events seemed a bit as we might say in Brazil “fora da realidade” or “too good to be true.” While promotion can be healthy it is also a bit illogical given all the negativity and pessimism that surrounds anything governmental and business in today’s Brazil. At Bay Brazil, I raised the question of crime, corruption and complacency affecting Brazil’s development. The optimistic response was that corruption was being addressed through the ongoing and unique progress in the Lava Jato investigations. The Federal Police have been strengthened and, different from the past, bureaucrats and businessmen have been arrested and convicted. On the other hand, shoulders shrugged at the mention of complacency, perhaps indicating that Brazilians continue to be content in a land blessed by sun, beaches and beauty and thus able to shrug off the evils of underdevelopment and even a possible return to the authoritarianism that characterized Brazil’s military governments between 1964 and 1985. In spite of optimism and corners to be turned, Brazil must still face the question as to the correlation between effective democracy, citizen participation and balanced economic development for all. Another question is the role innovation and venture capital will play in this process.DKQ0w8-VwAErJaw

Participants at 4th Annual US-Brazil Innovation Summit, San Diego, CA, Sept. 21, 2017. Photo from Twitter @chadevans1019

 

 

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Esgoto e Corrupção: Rotina do Brasil

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No dia a dia da política, esta difícil ver alguma solução para o Brasil. Ha uma forte tendência para fuga, alienação e desespero. Parece que falta iniciativa em todos os níveis. Convive se diariamente com alto custo de vida, falta de segurança, tiros, assaltos, falta de saúde, educação e saneamento. E os problemas não são de hoje mas são perenes e parecem que estão agravando pela falta dos recursos que foram drenados pela corrupção e má administração. Os centros de excelência de todo tipo encolheram.

Ha um paralelo entre corrupção e esgoto. Mais do que 50% da população não tem conexão a rede de esgoto e as águas usadas e os detritos poluem todos os cursos de água desde a Bahia da Guanabara ate as praias de Salvador e ainda passando pelo Rios Tiete e Arrudas em São Paulo e Belo Horizonte. Todas as obras por onde vazou dinheiro foram superfaturadas numa proporção também inaceitável. Assim ha uma ineficiência esmagadora na administração publica.

Embora o Brasil tenha resolvido o problema da fome, o pais nunca abordou com seriedade a questão do esgoto.   Sabe-se, ha muito, da necessidade de uma solução para os resíduos, da mesma forma que ha um clamor para o fim da corrupção. O problema e a desconexão entre a esfera de política, políticas publicas e a sociedade civil. O Congresso é corrupto, o estado quebrado, não há recursos para execução de obras básicas e a sociedade esta acomodada.

No Brasil, normalmente o sentimento esta sempre oscilando entre a tristeza / resignação e euforia / carnaval. A descoberta do pré-sal junto com o futebol da Copa e a conquista das Olimpíadas gerou um período de folia e ao mesmo tempo arrebentou os limites da corrupção. Na farra da expectativa da jorra do dinheiro, esqueceu se do básico da limpeza e saneamento. E com tempo a corrupção manchou a imagem do Brasil da mesma forma que as praias, as ruas e ruelas são sujas, emporcalhadas pelas fezes e detritos.

Um efeito, talvez inesperado, da redução da fome foi o aumento da obesidade. O Brasil corrompeu os corpos com a fast food industrializada da mesma forma que a industrialização da corrupção atacou o corpo do estado. As instituições já sujeitas a pressão e lógica de grandes grupos midiáticos, industriais e financeiros acabaram sucumbindo e, como disse um ex governador baiano, se lambuzaram no mel ou na fatura que se antecipava.

O que existe hoje é o povo gordo mas mal nutrido, mal educado e sem ter onde canalizar o que evacua dos excessos. Enquanto a Lava-Jato procura sanear o sistema de evasão de dinheiro, os de abaixo continuam sem segurança, sem escola e sem saneamento. Enfim, as “cagadas” continuam.

Em principio, as soluções nestas três áreas são aparentes e factíveis, mas enquanto o pais oscila entre o “não adianta” e as “coisas estão ótimas”, ninguém clama pelas nem por esgoto, escola ou polícia. As escolas publicas são abandonadas, os professores tem baixa remuneração, isto é, quando recebem e quem pode manda os filhos para a rede privada? A segurança não existe a não ser no setor privado, com alarmes, grades, cercas e “body-guards.” O que o corpo elimina continua descendo as ladeiras e chega medonho no asfalto. O Congresso por sua vez se protege e finge que o problema não é com eles. O povo sem instrução, por sua vez continua, elegendo aqueles mesmos que tem nome ou que “aparecem” na TV como do “povo” ou como os salvadores da pátria.

Talvez, algum sucesso na limpeza do mundo corporativo, as estatais, e na política poderá servir de exemplo para a limpeza sanitária. Dai, quem sabe os condenados por atos de formação de quadrilha, evasão de rendas, e roubo do dinheiro publico poderão ser condenados a prestar serviços públicos na construção e canalização daquilo que comeram e que conseqüentemente evacuaram em excesso. Não seria exemplar o ex-governador do Rio trabalhando de “picareta” ou um Senador ladrão cavando uma fossa?

Seja como for, enquanto os problemas institucionais fundamentais não são resolvidos talvez com uma nova safra de políticos e uma nova postura de seriedade e zelo pelo bem publico, o país continuará nadando literalmente no esgoto e na corrupção em que se encontra atualmente. Acorda, Brasil!

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