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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Brazil: Muddy Waters, Green Shoots, No Flowers

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Everyone pretty much agrees that Brazil is going through another major crisis.  There is less agreement as to if and when the crisis will achieve some sort of resolution.  Personally in my experience in Brazil since the early 60’s, I cannot remember a time when Brazil was not in crisis.  We have an ongoing process of ebbs and flows dating back to discovery.  There are many explanations ranging from bureaucratic fatalism associated with the Portuguese crown, the geopolitical one derived from Brazil’s less favorable locational aspects, the racial one that blames Brazil’s underdevelopment on its ethnic mix, the political explanation derived from the lack of tradition in participation and voting, the economics due to lack of savings and investment, the educational narrative that notes the lack of functional literacy or the historic one that combines all of the above and more.  Each of these brings something to understanding but still the crises are never resolved and only change a bit in players and personalities.

With all of this, Brazilians remain generally optimistic, happy and compare their country in favorable terms to other places.  For most, Brazil remains the best place to be born and to live.  Even those that participate in the diaspora want to eventually return when things improve.  So how do we reconcile this contradiction?  In spite of violence, mayhem, disorganization, gross inequality, open thievery and poverty, Brazilians still affirm that life is good.  In spite of the recession, now extending to year 3 from 2015 to possibly 2018, Brazil still ranks in the top 10 economies worldwide as measured by GDP having dropped from 6 to 9 in the ranking.  Even so  wealth and wealth creating potential abound.

Amazingly to some, back some 30 plus years, Brazil was in a similar situation.  Jose Sarney (PMDB) was president, supported by Congressman Temer and his colleagues.  Formal unemployment was around 17%, the direct elections movement has lost its chance in 1985 but achieved the open elections of 1989 resulting in Fernando Collor’s election and Lula’s first presidential defeat.  Inflation was higher than that Venezuela’s is now topping 1000% per year.  Like Temer, Collor was called to the carpet on accusations of gross corruption.  Unlike Temer, Collor had no base in Congress and was impeached.  Although Collor had more charisma than Temer, he also failed on the economic front and his different attempts at controlling inflation are remembered with contempt and derision.  Collor’s impeachment in 1992 placed his VP Itamar Franco in the presidency and led to Fernando Henrique Cardoso (FHC) becoming Finance Minister and the implementation of the Plano Real.

In the subsequent elections, FHC trounced Lula two times.  But Cardoso’s second term was made possible by satisfying the venality of Congress (it had to vote a Constitutional amendment allowing a second term).  While the Congressional penchant for the buy off had long existed and had been condoned by the military governments and greatly enhanced by Sarney, FHC also drank from the tainted cup of expediency and now stands accused of having committed the original sin.  In this Cardoso just followed the long tradition of what he has described as “A Arte da Politica” but it is really the dirty business of sausage making, (now “nobly” carried on by JBS, the world’s largest meat processor, thanks to the generosity of Lula, Dilma and the national champion policy which started back with the military governments.)

Things change but remain the same. What goes around comes around.  Can Brazil break the cycle of miracle years followed by crisis.  Can it the country go beyond boom and bust?  My answer is an optimistic yes.  And here is my prediction, no matter how foolhardy.  Today’s Congressional vote allows Temer to survive until the 2018 elections.  The field in 2018 will include the new and the old.  Most likely, the old will win.  It could be Lula if he is not in jail or it could even be the rightist Bolsonaro the messianic ex-military Congressman who sings the praises the military and disdains minorities.  It really does not matter in the long run.  The important fact is to hold the election, gradually renew Congress, put up with whoever is elected and gradually reconstruct civil society based on meeting basic social demands in education, health, and basic sanitation.

This Congress has decided to protect itself by protecting Temer.  The President, in turn, has promised reforms and continues with in their pursuit to maintain a bit of legitimacy bestowed by the market, if no one else.  Given the horse trading that has taken place in order to keep power, it is likely that any further reforms will be more symbolic than real.  The government has already gone beyond its spending cap for this year and now is raising taxes.  Temer will end his mandate as one of Brazil’s most unpopular figures.  Clearly he desires power, is venal and shameless in his own perpetuation.  Still, there no immediate obvious better alternative.  Dilma’s impeachment solved nothing and further surrendered power to corrupt politicians.  Her one virtue was that she allowed and did not block investigations.  Temer has less personal virtue but certainly is a better political wheeler and dealer.  On the positive side though his administration at least opened space for social security, labor and spending reforms.  To all but the most obtuse, there is recognition for this need.  Delfim Neto, now the ranking academic conservative economist is not optimistic but suggests that the “least bad solution” is to let Temer “end his mission and postpone the proceedings” until there is a new administration in place on Jan. 1, 2019.

Brazil continues it herky-jerky halting progress.  In spite of the poor governance, things will gradually improve but the rate will depend heavily on how and if people decide to get involved.  The opportunities are many in civil society and even in the political realm as Temer and cohorts eventually die off.

 

Brazil: Down But Not Out

The following article is by Octavio Aronis and originally published at http://www.aronisadvogados.com.br  It is republished here with Octavios permission.

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By Octávio Aronis, Attorney

As a Brazilian collection attorney, a glance at the international news over recent months would seem to suggest a dire economic situation in Brazil.

For example, public corruption is the norm, crime in the streets is well documented and the country is struggling to recover from a two year economic recession. If circumstances are truly that bad there would be no reason to believe in our economic future, but the reality is that there are reasons for hope. From my perspective, politically speaking, positives may be presently difficult to locate, with the current president indicted on bribery charges and the previous one impeached, and this is just for starters. But with so much attention being paid to these issues, they are being dealt with and discouraged on a national level, and will hopefully lead to a stronger system.

In addition, proponents claim that economic success is independent of the turmoil enveloping the president and, what would seem to support this assertion is that the central bank reported a positive initial quarter of 2017, the first since the start of the recession in 2015. And news of the presidential indictment did not discourage investors in the marketplace, as most still view the economy encouragingly. This suggests a trend in the right direction at last for the world’s ninth largest economy.

The recession has created opportunities for investment and money is pouring into the economy from outside investors who are betting on an economic recovery. With the economic downturn bringing about chances to buy in low, financiers are bringing foreign resources into Brazil, some simply because the country is too large and important on a regional and worldwide scale to ignore. With the efforts to cleanse corruption ongoing, the influx of investment is timely and should spell growth for the future.

Allow me to emphasize that Brazil still boasts many natural resources within its borders and will use them to recover from the recent hardships, along with the industries that have succeeded during this period. It is still a regional, or greater, power in agriculture and forestry and other industries which make for a good base from which to build. Companies and industries that were able to survive over recent years will find themselves adept and competitive when circumstances improve, and will lend further credence to an improving economy.

Finally, we Brazilians have reason to have hope in the country’s fortunes. We have lived through many recent problems and are realizing that change needs to happen. Some issues are systemic and improvement will come slowly. Although many of us may be uncertain about where our country is headed at this point, most of us understand that the current course cannot continue and are prepared to make the modifications necessary to ensure a strong and successful nation in the future.

Unsurprisingly, the headlines of the world do not tell the full story of our country and its economic outlook. There are many challenges to confront, but they are being confronted and are not the sum of all Brazil’s many parts and resources. If our country is willing to embrace the changes that must be made to its systems, then it will still find itself positioned to be successful in the future.

For any questions or comments, please contact Octávio Aronis at octavio@aronisadvogados.com.br.

This article has been edited by Steven Gan of Stellar Risk Management Services, Inc.

All Rights Reserved

Trump is Absurd. Our Best Response is Laughter – Karl E. Scheibe, Wesleyan University*

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Photo from Getty Images found on Internet

 

“Credo quia absurdum”  —  I believe because it is absurd; – Tertullian

This ancient Latin phrase might itself be considered absurd—but it was used to justify Christian faith—not to be achieved by the use of sweet reason.  It is apt in these days, for it can help us understand why such an unreasonable candidate as Donald Trump somehow earned the faith of enough of our citizens to be elected President.  How can we account for this attraction to absurdity in our lives?

First we must recognize that absurdity is all around us—an everlasting presence.  Conscious life is itself a deep mystery, not to be explained by any reasonable account.  And death looms as a more conspicuous absurdity, to which we are often forced out of all reason as the times age and as we age in time.  We attempt to defend ourselves against the absurd by searching for meaning in events and in our own lives.  In this we are aided by social institutions—such as church, family, community, corporation or occupation that can give us stable coordinates—ways of determining North from South, Right from Wrong.  But from time to time, we as a people can get lost in a sea of absurdity—as families, jobs, religions, and political institutions are shaken and seem unstable.  Even little things can be upsetting, as when a TSA agent in an airport orders someone to take off their shoes and belt, to assume silly postures, and finally to surrender a forgotten corkscrew.  Above all, we must not protest at being subjected to such absurd procedures—themselves of doubtful value in achieving safety.  We have learned to accept ubiquitous absurdity.

Regulations, orders, commands, rules—these things produce a pool of resentment in us as reasonable citizens—making us vulnerable to an absurd presence, such as Mr. Trump, who seems to exude contempt for any established order.  He is manifestly neither good nor kind.  He has crude manners and a grotesque appearance—and acts out of impulse rather than reason.  He does not calculate, he cares not for evidence nor for scientific analysis.  He contradicts himself and yet retains the allegiance of a strong and stubborn minority of people who seem to believe him because he is absurd.

We search for meaning, as the famous psychiatrist Victor Frankl observed, emerging from the absurdity of the Holocaust.  But if you are an out-of-work coal miner in West Virginia, whose family has depended for generations on the stability of the mine, you do not have easy search for meaning ahead of you.  Never mind that the promise made by Mr. Trump about starting the mines again is absurd.  It is believed because it is absurd.  It is as if Mr. Trump is giving the middle finger to all of those abiding forces in our world that must be responsible for this conviction that we are being screwed over.  It makes no difference that he makes no sense.  “Stop making sense” is a line with appeal.

“If I laugh at any mortal thing, ’tis that I may not weep.” – Byron

But Mr. Trump is more than absurd.  He is also a fool—and the more remarkable a fool because he does not acknowledge his foolishness.  It is a puzzle to know how to react to Donald Trump as President of the United States.  Should we be afraid?  Fear gives too much credit to the Devil, is unpleasant to experience, and accomplishes nothing.  Should we be angry?  Anger tends to be blinding, and reduces our capacity to act sensibly, as opposed to lashing out.  Lashing out is likely to hurt others, not Mr. Trump.  Should we be remote, withdrawn, in denial?  This might at least enhance survival in the short run.  But isolation simply will not do in the long run–for one may not ignore or be indifferent to a presence so large, so incongruous, so full of novelty and danger.  This leaves us the options of either weeping or laughing.  We might cry as we submit to the specter of the utter defeat of humanity and civilization as we have known them.  Or we might laugh!  Laughter is, I submit, beyond compare the best of all possible responses to Donald Trump.

Consider the delicious word, ‘ridicule’.  It derives from the Latin verb ‘rire’.  It produces the adjectives ‘ridiculous’ and the less common ‘risible’–words that are most apt as descriptive of Mr. Trump’s appearance, utterances, or actions.  This is also the root of the word ‘derision’ and the verb ‘deride’ –handy tools in our verbal kit bag.

Mr. Trump is a fool.  He does not have, as my grandmother used to say, the common sense that God gave to little green apples.  I don’t see him as particularly malicious, even as he is capable of malice in his impulsive churning about.  I see humor as the immediate and most natural response to Mr. Trump.  I recall the image of Jon Stewart clasping his hands and proclaiming his glee at the news that Donald Trump might actually be the Republican nominee.  If you are a professional comedian, always looking for material, then the emergence of Mr. Trump onto the main stage must have seemed like manna from heaven.  Other commentators such as David Brooks were much more reserved in their reception of this startling news, and seemed mostly discomfited, not amused, by this untoward development.

The humor that emerges from beholding Mr Trump is multi-layered.  He characterizes himself as smart and omni-competent, even as he makes conspicuous display of his ignorance and poor judgement.  He talks fluently, to be sure.  But he displays a reduced vocabulary with a preference for absolutes and extremes–words like “great” and “terrible”, “disaster” and “terrific”.  He frequently exhorts his audience to, “Believe me, trust me,” and usually repeats this command several times.  I, for one, am not likely to fall in line behind one who is constantly exhorting me to fall in line.

There is a respectable “theater of the absurd”—with Beckett and Ianesco and Pirandello and even Albee and Shepard guiding us to hone our appreciation of the absurd in life.  Dadaism and Dali in art and John Cage in music have understood that “The absurd” has a prominent place in our lives.  And so it has—even a place of honor.  But it is perilous to allow an absurd fool to take a dominant position in our lives.  Mr. Trump should be laughed off the stage.

Karl  E. Scheibe is Professor of Psychology, Emeritus at Wesleyan University

He has written extensively on psychology and theater.

kscheibe@wesleyan.edu;  860 514 4728

*While Steve Scheibe authors most of the material on the allabroadconsulting blog, this text was written by my brother Karl and is used here with his permission.

Is it Time to Give Up on Brazil?

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I have attended and spoken at plenty of events in Brazil, the US and other countries.  There is usually a favorable view (often tinged with condescension) of the Brazilians, mixed with suspicion about the country’s unique and complex socio-economic culture.  The conclusion has nevertheless always been that Brazil is too big to ignore and that it is a beautiful place temporarily bogged down by failures largely of its own making.

But perceptions about Brazil are changing along with its image.  Faced with a severely shrunken and stagnant economy, vast political disarray and a societal meltdown many Brazilians, both elite thinkers and average citizens are throwing in the towel.  Foreigners are doing the same in the face of street crime and wanton murder and mayhem occurring on a daily basis with further signs of deterioration.  A vague sense of hopelessness and despair mixed with resignation is the prevalent feeling.

The current round of plea bargains, secret recordings, denunciations, indictments and accusations do not leave any major figure in Brazil’s political elite untouched.  Passion and anger seethe and erupt in personal attacks on opposing sides in the streets, on airplanes, and in Congress and other forums.  President Temer stands accused of being the Godfather figure of Brazil’s biggest mafia.  Former Presidents Lula and Dilma and virtually all of their staff member have been unceremoniously brought in for depositions or labor under a cloud of suspicion.  Billions of dollars have disappeared in an almost uncountable number of schemes with little hope of more than a penny on the dollar ever being recovered.  While members of Brazil’s elite sit in jail and others are in line, the judicial system has also come under attack for partiality and corruption.  Dilma’s presidential opponent, Aecio Neves, was only recently removed from his Senate seat due to a compromising recording showing his long-suspected illicit activities.  So Brazil’s three powers: executive, legislative and judicial have little or no credibility among Brazilians.  The 1988 Constitution remains in place yet everyone recognizes that reforms are needed but cannot be made because of gridlock and lack of consensus.  Brazil’s streets show the obvious consequences with over 14 million unemployed, rampant growth of informal activities–semi-legal to totally illegal – street crime, crimes against tourists and the vulnerable and an upsurge of killings in territorial disputes by drug gangs and organized crime.

The picture is not pretty.  Is Brazil headed for a Venezuela-like crisis?

Possibly, but there is a contrarian view, not necessarily of optimism but something closer to opportunism and hope.  It is based on a larger story taking place outside the realm of institutional weakness and governmental breakdown.  There are different threads in this narrative.  Here are a few:

  1. On the institutional level, the corruption scandals and their walk through the judicial system is actually purging Brazil, awakening consternation and revolt in civil society. In the long term, this will lead to resurgence and rebuilding.
  2. As to the economy, Brazil’s bureaucratic and protectionist system has sorely tested national manufacturing. The companies that survive will emerge stronger and can be competitive in the international economy based on the creativity and dynamism.  Brazil’s natural resources, including agriculture, forestry, mining and much else, will also spur economic growth.
  3. Just as the agriculture sector has modernized and now represents the growth sector of the economy, industry too can revive through specialization and a focus on innovation and competitiveness. The Brazilian market is large and Brazil remains a regional power in spite of the last years of decline.
  4. Brazilians again are emigrating in significant numbers.  But many will inevitably return as was evidenced in the boom years leading up to 2014 and the World Cup.  Return migration brings advantages of skills learned abroad, entrepreneurship and investments.  Very few deny that opportunities abound in all sectors for those with eyes to see.
  5. Foreign investors and so-called “smart money” is flowing into Brazil to take advantage of attractive valuations. These “capitalists” are not even necessarily betting on the long run.  They see opportunity for profit by buying at the bottom and selling on the inevitable recovery.  Foreign capital is flowing into traditional sectors such as oil and gas, mining, agriculture and even industry, not to mention innovative sectors such as alternative energy (wind, solar), education and online retail.
  6. Social networking in Brazil ranks second or third after the United States on most measures of usage. While the separation of data, information and productive content remains a universal problem, the access to all types of information gives Brazil’s user population an outstanding opportunity.  Many Brazilians already are successful entrepreneurs in this sector.
  7. Brazilians have always depended on a paternalistic and patrimonial state. But the collapse of the productive sector, the spread of corruption, and its institutionalization are creating and shaping the emerging perception that the model is no longer feasible.  This forces an awakening and perhaps a stronger drive to a more traditional liberal democratic model.  Of course, at this point, this is aspirational and the subject of ongoing debate.  Certainly given the disparities, supportive and corrective social policies in education and income distribution continue to be required.  A minority prefers socialism, perhaps something between Cuba and China, but there is no operational model of how this would work except for perhaps Lula’s first term which had little to do with socialism.
  8. Although there has been a lot written about Brazil being lost, most thinking and informed Brazilians still want an orderly, constitutional, and regulated transition to a new government. Institution building is a slow process and it will only take place through the regular holding of elections and improvements in education and access to information. It is a sticky wicket indeed but still taking place slowly, way too slowly.

So in the end, it is not yet time to give up on Brazil.  It is still a beautiful and viable place in spite of its politicians and government.  More time is needed to transform hope into reality.  Defeatism is bound to lead to defeat.