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[MAPS]https://maps.google.ca/maps?q=Pernambuco&hl=en&sll=45.495362,-73.568761&sspn=0.001608,0.004128&t=h&hnear=Pernambuco,+Brazil&z=7[/MAPS] Brazil’s north-east: The Pernambuco model Eduardo Campos is both modern manager and old-fashioned political boss. His success in developing his state may make him his country’s next president Oct 27th 2012 | RECIFE | from the print edition IN THE 1980s an American anthropologist, Nancy Scheper-Hughes, carried out fieldwork in Timbaúba, a town in the sugar belt of Pernambuco state, in Brazil’s north-east. She described a place seemingly resigned to absolute poverty. The back-breaking task of cutting sugar cane by machete provided ill-paid work for only a few months of the year. The deaths of young children from disease and hunger were accepted “without weeping”. Traces of that bitter world survive in Timbaúba. In Alto do Cruzeiro, a poor suburb on a hilltop overlooking the town, Severina da Silva, a maid who also runs a shop in her living room, says that some people still go hungry. She is 48 but looks 20 years older. A 31-year-old cane cutter nicknamed “Bill” has six children—a throwback to the days when people had big families instead of pensions. But Bill has a labour contract, with full rights; he gets a stipend and a small plot from the state government to see him through the idle months. That is part of a broader social safety net provided by democracy in Brazil. It includes non-contributory pensions for rural workers. Some 6,000 of the town’s poorest residents take part in Bolsa Família, a cash-transfer scheme started by Luiz Inácio Lula da Silva, Brazil’s president from 2003-10, who was born near Timbaúba. Thanks partly to this cash injection, the town now boasts car and motorbike dealers, new shops, a bank and restaurants. That is a ripple from a broader flood of investment that has made Pernambuco one of Brazil’s fastest-growing states. Once Europe’s most lucrative Atlantic colony, it languished for centuries. While sugar estates on the plains of São Paulo mechanised with world-beating efficiency, those in Pernambuco’s rolling hills struggled. Revival began with a new port at Suape, south of Recife. Its hinterland is now a sprawling industrial complex. Some 40,000 workers are building a vast oil refinery and petrochemical plants for Petrobras, the state-controlled oil company. A new shipyard and wind-power plants rise among the mangroves. Suape is a monument to federal money, industrial policy and an alliance between Lula and Eduardo Campos, Pernambuco’s ambitious governor. But the state’s boom goes wider. Rising incomes have helped Mr Campos attract private investment. Fiat is to start work on a car plant beside the main road north of Recife. A host of smaller food, textile and shoe factories are now setting up in the state’s poor interior, including Timbaúba. While the rest of Brazil worries about deindustrialisation, Pernambuco does not: since Mr Campos became governor in 2007, industry’s share of the state’s economy has risen from 20% to 25%, and will reach 30% by 2015, he says. This boom has brought nearly full employment—and created an acute skills shortage. The refinery is years behind schedule, as is the shipyard’s order book, partly because illiterate former cane-cutters make poor welders. To try to remedy that, Mr Campos has teamed up with the Institute for Co-Responsibility in Education (ICE), a private educational foundation, to reform the state’s middle schools. More than 200 of these now operate an eight-hour day, rather than the four-hour shifts common in Brazil. In return, the government has raised teachers’ salaries and added bonuses tied to results. It is also trying to chivvy mayors into improving primary schools through extra funds and other incentives. That is vital: on average, pupils arrive in middle schools aged 15 with a three-year learning deficit, says Marcos Magalhães, ICE’s founder. Pernambuco is rising up the rankings of state educational performance. Mr Campos’s critics say he should do more to tackle poverty. Alongside the opulent residential blocks towering over its palm-fringed beaches, Recife has 600 favelas (slums), and its lagoons are fetid with untreated sewage. He replies that his government is doing what it can to help the generation scarred by the poverty of cane-cutting, particularly in the drought-stricken semi-desert region farther inland. But his bold bet is that infrastructure, private investment and better education will eliminate the causes of his state’s misery. “We are turning off the flow of poverty while looking after the stock,” he says, using his trademark management-speak. So far that bet has paid off. Mr Campos won a second term in 2010, and his Brazilian Socialist Party did well in this month’s municipal elections, in Pernambuco and beyond. He is nominally an ally of Dilma Rousseff, Lula’s successor as president. But he is also a potential threat to her winning a second term at the 2014 election. Mr Campos was born into politics. Miguel Arraes, his grandfather, was an old-fashioned socialist and Pernambuco’s governor both before and after Brazil’s 1964- 85 military dictatorship. Mr Campos says Arraes taught him that politics is about “bringing people together, rather than dividing them.” Some in Recife complain that he has learned that lesson too well and become a modern version of a traditional north-eastern coronel (political boss), shrinking from challenging the old rural order, trading support for jobs and favours and freezing out dissenters. But his defenders say he gets things done. He was lucky that his less-heralded predecessor laid the foundations of Pernambuco’s renaissance. He has built on them by modernising the state. He faced down the trade unions over school reform and brought private managers to state hospitals. He has set hundreds of targets for his administration, and harries his aides to achieve them. One that he recognises he must meet—or pay a political price—is to finish a new football stadium in Recife in time for next year’s warm-up tournament for the 2014 World Cup. As both the main parties that have run Brazil since 1995 lack new faces, Mr Campos’s success in Pernambuco has turned him into the country’s most-watched politician. http://www.economist.com/news/americas/21565227-eduardo-campos-both-modern-manager-and-old-fashioned-political-boss-his-success

Brazil’s economy The devil in the deep-sea oil Unless the government restrains itself, an oil boom risks feeding Brazil’s vices Nov 5th 2011 | from the print edition DEEP in the South Atlantic, a vast industrial operation is under way that Brazil’s leaders say will turn their country into an oil power by the end of this decade. If the ambitious plans of Petrobras, the national oil company, come to fruition, by 2020 Brazil will be producing 5m barrels per day, much of it from new offshore fields. That might make Brazil a top-five source of oil (see article). Managed wisely, this boom has the potential to do great good. Brazil’s president, Dilma Rousseff, wants to use the oil money to pay for better education, health and infrastructure. She also wants to use the new fields to create a world-beating oil-services industry. But the bonanza also risks feeding some Brazilian vices: a spendthrift and corrupt political system; an over-mighty state and over-protected domestic market; and neglect of the virtues of saving, investment and training. So it is worrying that there is far more debate in Brazil about how to spend the oil money than about how to develop the fields. If Brazil’s economy is to benefit from oil, rather than be dominated by it, a big chunk of the proceeds should be saved offshore and used to offset future recessions. But the more immediate risks lie in how the oil is extracted. The government has established a complicated legal framework for the fields. It has vested their ownership in Pré-Sal Petróleo, a new state body whose job is merely to collect and spend the oil money. It has granted an operating monopoly to Petrobras (although the company can strike production-sharing agreements with private partners). The rationale was that, since everyone now knows where the oil is, the lion’s share of the profits should go to the nation. But this glides over the complexity in developing fields that lie up to 300km (190 miles) offshore, beneath 2km of water and up to 5km of salt and rock. To develop the new fields, and build onshore facilities including refineries, Petrobras plans to invest $45 billion a year for the next five years, the largest investment programme of any oil firm in the world. That is too much, too soon, both for Petrobras and for Brazil—especially because the government has decreed that a large proportion of the necessary equipment and supplies be produced at home. How to be Norway, not Venezuela By demanding so much local content, the government may in fact be favouring some of the leading foreign oil-service companies. Many would have set up in Brazil anyway; now, with less price competition from abroad, they will find it easier to charge over the odds. Seeking to ramp up production so fast, and relying so heavily on local supplies, also risks starving non-oil businesses of capital and skilled labour (which is in desperately short supply). Oil money is already helping to drive up Brazil’s currency, the real, hurting manufacturers struggling with high taxes and poor infrastructure. When it comes to oil, striking the right balance between the state and the private sector, and between national content and foreign expertise, is notoriously tricky. But it can be done. To kick-start an oil-services industry, Norway calibrated its national-content rules realistically in scope and duration, required foreign suppliers to work closely with local firms and forced Statoil, its national oil company, to bid against rivals to develop fields. Above all, it invested in training the workforce. But Brazilians need only to look at Mexico’s Pemex to see the politicised bloat that can follow an oil boom—or at Venezuela to see how oil can corrupt a country. Petrobras is not Pemex. Thanks to a meritocratic culture, and the discipline of having some of its stock traded, Petrobras is a leader in deep-sea oil. But operating as a monopolist is a poor way to maintain that edge. Happily, too, Brazil is not Venezuela. Its leaders can prove it by changing the rules to be more Norwegian.

Doing business in Brazil Rio or São Paulo? For the first time in decades, Brazil’s Marvellous City looks attractive for business Sep 3rd 2011 | RIO DE JANEIRO AND SÃO PAULO | from the print edition LAST year Paulo Rezende, a Brazilian private-equity investor, and two partners decided to set up a fund investing in suppliers to oil and gas companies. Although this industry is centred on Rio de Janeiro, Brazil’s second-largest city, with its huge offshore oilfields—and fabulous beaches, dramatic scenery and outdoor lifestyle—they instead established the Brasil Oil and Gas Fund 430km (270 miles) away, in São Paulo’s concrete sprawl. Even though it means flying to Rio once or twice a week, Mr Rezende, like many other businesspeople, decided that São Paulo’s economic heft outweighed Rio’s charms. But the choice is harder than it used to be. For many years, São Paulo has been the place for multinationals to open a Brazil office. It may be less glamorous than Rio, as the two cities’ nicknames suggest: Rio is Cidade Maravilhosa(the Marvellous City); São Paulo is Cidade da Garoa (the City of Drizzle). But as Mr Rezende sadly concluded: “São Paulo is the financial centre, and that’s where the money is.” Edilson Camara of Egon Zehnder International, an executive-search firm, does 12 searches in São Paulo for each one in Rio. The biggest mistake, he reckons, is for firms to let future expatriates visit Rio at all. “They are seduced by the scenery and lifestyle, and it’s a move they can sell to their families. But many have ended up moving their office to São Paulo a couple of years later, with all the upheaval that entails.” From a hamlet founded by Jesuit missionaries in 1554, São Paulo grew on coffee in the 19th century, industry in the first half of the 20th—and then on the misfortunes of Rio, once Brazil’s capital and its richest, biggest city. The federal government abandoned Rio for the newly built Brasília in 1960, starting a half-century of decline. Misgoverned by politicians and fought over by drug gangs and corrupt police, Rio became dangerous, even by Brazilian standards. The exodus gained pace as businesses and the rich fled, mostly for São Paulo. Now, though, there are signs that the cost-benefit calculation is shifting. São Paulo’s economy has done well in Brazil’s recent boom years and it is still much bigger, but Rio’s is growing faster, boosted by oil discoveries and winning its bid to host the 2016 Olympics (see table). Last year Rio received $7.3 billion in foreign direct investment—seven times more than the year before, and more than twice as much as São Paulo. Prime office rents in Rio are now higher than anywhere else in the Americas, north or south, according to Cushman and Wakefield, a property consultancy. Community-policing projects are taming its infamous favelas, or shantytowns: its murder rate, though still very high at 26 per 100,000 people per year (2.5 times São Paulo’s), is at last falling. Brazil’s soaring real is pricing expats paid in foreign currencies out of São Paulo’s classy restaurants and shopping malls; Rio’s recipe of sun, sea and samba is still free. Even Hollywood seems to be on Rio’s side: an eponymous animation, with its lush depictions of rainforest and carnival, is one of the year’s highest-grossing films. Rio’s mayor, Eduardo Paes, has big plans for capitalising on the city’s magic moment. He has set up a business-development agency, Rio Negócios, to market the city, help businesspeople find investment opportunities, and advise on paperwork and tax breaks. It concentrates on sectors where it reckons Rio has an edge: tourism, energy, infrastructure and creative industries such as fashion and film. “A couple of years ago, foreign businessmen would come to Rio and ask what we had to offer,” says Mr Paes. “We had no answer. Now we roll out the red carpet.” The political balance between the two cities has changed too. In the 1990s São Paulo was more influential and better run: it is the stronghold of the Party of Brazilian Social Democracy (PSDB), the national party of government from 1995 to 2002. Now the PSDB is in its third term of opposition in Brasília, and though it still governs São Paulo state, it is weakened by internal feuds. In Rio, by contrast, the political stars are aligned. The state governor, Sérgio Cabral, campaigned tirelessly for the current president, Dilma Rousseff—and received his reward when police actions in an unruly favela late last year were backed up by federal forces. São Paulo’s socioeconomic segregation, long part of its appeal to expats, is starting to look like less of an advantage. Most of its nicer bits are clustered together, allowing rich paulistanos to ignore the vast favelas on the periphery. In Rio, selective blindness is harder with favelasperched on hilltops overlooking all the best neighbourhoods. But proximity seems to be teaching well-off cariocas that abandonment is no solution for poverty and violence. Community policing and urban-renewal schemes are bringing safety and public services. Chapéu Mangueira and Babilônia, twin favelas a 20-minute uphill scramble from Copacabana beach, are being rebuilt, with a clinic, nursery and a 24-hour police presence. The price of nearby apartments has soared. Other slums are also getting similar make-overs. Rio’s Olympic preparations include extending its metro and building lots of dedicated bus lanes, including one linking the international airport to the city centre. By 2016, predicts City Hall, half of all journeys in the city will be by high-quality public transport, up from 16% today. São Paulo’s metro extensions are years behind schedule, and the city is grinding towards gridlock. Its plans to link the city centre to its main international airport (recently voted Latin America’s most-hated by business travellers) rely on a grandiose federal high-speed train project, bidding for which was recently postponed for the third time. Rio is still unpredictably dangerous, and decades of poor infrastructure maintenance have left their mark. Its mobile-phone and electricity networks are outage-prone; the língua negra(“black tongue”, a sudden overflow of water and sewage) is a staple of the rainy season; exploding manholes, caused by subterranean gas leaks, are a hazard all year round. All in all, still not an easy choice for a multinational—but it is no longer foolish to let prospective expats fly down to Rio to take a look. http://www.economist.com/node/21528267

(Courtesy of Aljazeera)

(Courtesy of the Financial Post) Congrats to the National Bank of Canada. Singapore supposedly like the new Switzerland.

We like winners. Whether it's the winning army of a war or the world's fastest 100 meter runner, we lavish attention and praise on the victors and relegate the losers to the dustbin of history. The same is true of travel - the most important travel cities like New York, London, Sydney and Tokyo are favored by visitors while lesser-known destinations are skipped, scratched from the itinerary or just plain ignored. The destinations we visit win our attention for good reason. They're typically the biggest cities - meaning they have the best restaurants, biggest museums and largest inventory of hotels. Yet when we travel to only the "most popular" or "biggest," we ignore a fundamental truth of travel. What we know about a place has as much to do with what we're told as it does with what we actually find once there. With that in mind, Gadling is bringing you a compilation of our favorite "second cities" - large urban areas that are among the biggest in their country but frequently overshadowed by more famous capitals. The following picks boast many of the same amenities that make their bigger rivals so famous - top notch cultural institutions, unique local charm, great cuisine and nightlife. How many have you visited? Take a look below: * Second City #1 - Osaka, Japan - travelers love to talk about Tokyo, but focusing exclusively on Tokyo does serious injustice to the city of Osaka. What Osaka lacks in population, it more than makes up for in its citizens' lust for life and sheer zaniness. Along the streets of Osaka's Dotonbori district you'll find a raucous party of eating and drinking that is virtually unmatched anywhere on earth. In addition to the city's famous Takoyaki octopus balls and grilled snow crab, Osaka also boasts cultural attractions like Osaka Castle and the Momofuku Ando Instant Ramen Museum. * Second City #2 - Gothenburg, Sweden - Stockholm is unquestionably Sweden's capital and its largest city. But not nearly as many have been to Gothenburg, the country's second largest metropolis and home to Sweden's largest university. The large population of students means Gothenburg has a surprisingly fertile arts and culture scene, frequently rivaling its larger sibling Stockholm for an unassuming, fun experience - all at a fraction of the price. * Second City #3 - Krakow, Poland - Krakow has slowly become of one Poland's greatest tourist attractions in recent years, steadily easing out of the shadow of much larger Warsaw. Unlike Warsaw, which was leveled by bombing during World War II, Krakow retains much of its historical architecture - a unique feature that will have first time visitors in awe. * Second City #4 - Melbourne, Australia - neighboring Sydney might boast the Opera House and stunning harbor views, but Australian visitors ignore Melbourne at their peril. The city is packed to the brim with top-notch shopping, hidden laneways and world class events like the Australian Open tennis tournament. * Second City #5 - Wellington, New Zealand - Auckland might appear to dominate New Zealand's economic and cultural agenda, but in truth it's modest-sized Wellington that's really calling the shots. In addition to being New Zealand's capital city, Wellington has a world-class museum at Te Papa, killer food and what might be the best cocktails this side of the Pacific. * Second City #6 - Montreal, Canada - any visitor that's been to the capital of Canada's Quebec province can tell you: Montreal will give Toronto a run for its money any day of the week. In addition to hosting two fantastic music festivals each summer and bohemian nightlife, Montreal is also full of plenty of French colonial architecture and charm. * Second City #7 - Chicago, USA - a list of "second cities" would not be complete without Chicago, arguably the birthplace of the term and perennial competitor to bigger American cities like New York and Los Angeles. Make no mistake about it though: Chicago might be called the second city, but it has first-city amenities, including amazing museums, some of the best food in the U.S. and plenty of friendly residents. * Second City #8 - Salvador, Brazil - picturesque Rio de Janeiro and glitzy Sao Paulo may get all the attention in Brazil, but it's Salvador that's really stealing the show. The city's laid-back citizens, fantastic beaches and historic colonial architecture make it strong competitor for best place to visit in Brazil. Plus, if you want to go to Carnival, Salvador hosts some of the country's most authentic celebrations. * Second City #9 - Galway, Ireland - true, rowdy Dublin has the Guinness Factory and Book of Kells. But don't forget about Galway, a gem of a town along Ireland's wild and windy West Coast. Galway's position as home to many of the country's university students, rugged natural beauty and frequent festivals make it strong contender for Ireland's best-kept secret. * Second City #10 - Barcelona, Spain - if you're among the many travelers already raving about Barcelona's many charms, this pick comes as no surprise. Madrid might be the cultural and political head of Spain, but it is freewheeling Barcelona that is its heart. Between the picturesque city setting nestled between craggy foothills and the Mediterranean Sea, top-notch nightlife and shopping, warm climate or the burgeoning arts scene, there's a lot to love in Barcelona. Did we mention your favorite second city? Think we missed a hidden gem? Leave us a comment below and let us know what you think.