SHE finally did it. Nearly a week after her intentions were trailed in the Brazilian press President Dilma Rousseff, who narrowly won re-election in October, named her new economic team yesterday. Joaquim Levy (pictured above, in focus) will be the new finance minister and Nelson Barbosa (right) the minister of planning. Alexandre Tombini (left) keeps his post at the head of the central bank. As Bello explains this week (in a column written just before the appointments were made official), they portend a big change from the course Ms Rousseff pursued during her first term.
Brazil’s GDP report today underscores just why change is needed. The economy grew a negligible 0.1% in the third quarter of 2014, half the expected rate. After two consecutive quarters of shrinking output, the growth in the third quarter ends a technical recession. But it was mainly due to a burst of pre-election spending by the government. As the new economic team tightens fiscal and monetary policy, growth is likely to fall back in the near...Continue reading
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“SHAME! Shame! Shame!” roared the crowd when Ukraine’s leaders appeared at a recent ceremony honouring the Maidan victims. Protesters accused President Petro Poroshenko of breaking promises. A year after the “revolution of dignity” began, the politicians are being anything but dignified. A month has passed since the general election and still Ukraine has no government. Fights over cabinet posts or parliamentary seating speak to a lack of urgency. “It’s a circus, a kindergarten,” says Maria Zhartovskaya, political correspondent for Ukrainskaya Pravda, a website.Now five pro-Western parties have signed a coalition agreement. Mr Poroshenko and Arseniy Yatsenyuk, the prime minister, promise that the government will follow soon. But competition is hampering negotiations. The voters unexpectedly put Mr Yatsenyuk’s People’s Front first in the election. That was a blow to Mr Poroshenko, and leaves Ukraine with two power centres. The pair have descended into disagreement and posturing, raising fears of a repeat of the tensions that emerged after the Orange revolution. Mr Poroshenko and Mr Yatsenyuk have never been close. Ukraine’s Western allies are working hard to keep them together. Yet efforts to merge their parties into one ahead of the election failed—some say the two could not agree on a name. Lviv’s mayor, Andriy Sadovyi, whose Samopomich party is the...
“THAT building was erected on my brother’s blood,” Damla Kiyak, a 20-year-old student, declares. Two years ago her 30-year-old brother, Baris, a construction worker, burned to death, with ten others, in a tent on the site of a shopping mall in Esenyurt. This urban sprawl on the outskirts of Istanbul is a symbol of the building boom that is enriching Turkey’s businessmen and politicians—and claiming the lives of thousands. The tent in which Baris died was meant for 50 people, but over 100 were crammed into it. They jammed electric blankets and stoves into a power outlet meant for telephone chargers. The tent was flammable. “Inspectors kept warning the owners that a fire was around the corner. They did nothing,” says Ms Kiyak, whose mother was approached by the firm to buy her silence. A legal fight over negligence by the owner continues.At least 14,455 workers have died in industrial accidents since the Justice and Development (AK) party came to power in 2002. “Turkey has the worst worker safety record in Europe,” says Murat Cakir of Yangin Kulesi, an advocacy group. The neglect was revealed by a recent mine explosion in Soma, which killed 302, the highest toll in Turkish history. There was no refuge chamber; oxygen masks did not work; methane leaks and fires occurred daily.In October in Ermenek, another mining town, 18 miners died when a shaft flooded. “My son doesn’t know...
The Professor and the President: Daniel Patrick Moynihan in the Nixon White House. By Stephen Hess. Brookings Institution Press; 172 pages; $24. Buy from Amazon.com, Amazon.co.ukRICHARD NIXON and Daniel Patrick Moynihan were a most ill-assorted pair. Indeed, in his new book, “The Professor and the President”, Stephen Hess, a Republican journalist who worked with Moynihan for Nixon in the White House before a long career at the Brookings Institution, asks whether “Of all the odd couples in American public life, were they not the oddest?”Nixon, scowling and paranoid, the most combative (though not the most conservative) of Republican politicians, had survived eight often humiliating years as Ike Eisenhower’s vice-president. When he ran for the White House in 1960 he was beaten by John Kennedy by a handful of votes. He became a laughing-stock for the press when he failed to become governor of California two years later.Moynihan was six foot five inches (nearly two metres) of Irish brawn and charm, one of the “Harvard bastards” Nixon disdained but sometimes employed. He liked to say he was “baptised a Catholic but born a Democrat...
Suspended Sentences: Three Novellas. By Patrick Modiano. Translated by Mark Polizzotti. Yale University Press; 232 pages; $16 and £12.99. Buy from Amazon.com, Amazon.co.ukTHE Swedish Academy hailed Patrick Modiano as “a Marcel Proust of our time” when it awarded him the Nobel prize in literature last month. “That is encouraging,” the enigmatic writer said before he backed out of the limelight by announcing that he was dedicating the prize to his grandson.In his native France Mr Modiano is a household name, with 30-odd novels, children’s books, film scripts and song lyrics to his credit. His works are considered classics and can be read in 36 languages, but he is largely unknown in the English-speaking world because so little of his writing has been translated. His publishers hope the Nobel award will change that; Yale University Press has brought forward the English-language publication of “Suspended Sentences: Three Novellas” which was not due until next year.Mr Modiano’s work obsessively revisits the German occupation of France in the second world war, throwing light on some of the conflict’s murkier recesses. His early...
PAYING workers with shares in their employer is a time-tested way to ensure hired hands have the same interests as the firm’s owners. But the trick does not work so well with banks: bosses paid in stock have an incentive to expand a bank’s balance-sheet but not its loss-absorbing equity, increasing the likelihood of a bail-out as well as a bump in the share price. So regulators are speaking highly of a new sort of instrument to align incentives better: “performance bonds”. These are designed to make bankers cautious: they would not pay out for as long as ten years, during which time their value would not increase, but might fall if the bank founders.The idea, promoted by Bill Dudley, the head of the New York branch of the Federal Reserve, is roughly equivalent to demanding that senior bankers deposit their annual bonuses in the bank’s vaults for ten years. The delay is to make sure that the deals struck by the employees concerned do not eventually sour; if they do, the money would be used to help absorb the associated losses.Regulators think such bonds can be used to nudge financiers away from dodgy dealings, too. Fines meted out to banks for misbehaviour—of which there have been plenty in recent years—are in effect charged to shareholders. Deducting them instead from the pot of bankers’ future pay would punish those responsible instead.Mark Carney, governor of the Bank of...
WHEN the price of oil tumbles, you should worry about a country that relies on the stuff for 75% of government revenue and 95% of exports. That country is Nigeria, Africa’s biggest economy. Earlier this year oil was selling at well over $100 a barrel. It is below $80 now. Nigeria’s currency, the naira, is diving; the central bank is shedding foreign-exchange reserves in its defence. On November 25th it hiked interest rates by a percentage point to 13% (the first increase in three years) and said it had reduced its target rate for the naira (against the dollar) by a further 8%. That will not be the end of the story.Since 2004 the Nigerian economy has expanded at an average rate of 7% a year—faster than the west African average. High oil prices spurred the boom: Nigeria exports 2m barrels a day, much of it especially prized by refiners for its low sulphur, which makes it easier to meet environmental rules. Unfortunately, most of the extra 3m barrels of daily production America has added since 2011 have been low in sulphur too. As a result, low-sulphur oil has fallen even more dramatically in price than other sorts. The Economist Intelligence Unit, a sister company of The Economist, reckons that in 2015 Nigeria’s oil exports will bring in $67 billion, an 18% drop from last year, even though its output is rising.As oil revenue has dropped, the naira has...
EIGHTY miles north-west of Fukushima’s hulking nuclear corpse, Yauemon Sato, a small businessman, has charged into the solar-power business. Mr Sato has rented land, hired a workforce and lined up ¥80m ($6.8m) in capital from local investors and banks. His company says it can produce electricity for about 700 households. But the local power utility is refusing to buy more than a quarter of it.Japan set one of the world’s highest tariffs for renewable energy in 2012, as part of a bid to live without atomic power following the Fukushima disaster. Electricity companies were ordered to pay ¥42 a kilowatt-hour (kWh) to novice producers like Mr Sato. The promise of such a high guaranteed price triggered more than 1.2m applications, mostly for solar-power installations. Japan’s power utilities say they are overwhelmed and have revolted. Most have begun blocking access to the transmission grid.Kyushu Electric, which supplies electricity to 9m customers in Japan’s sunny south, was the first to balk, in September, after 72,000 solar-power producers rushed to beat the deadline for a cut in the guaranteed tariff to ¥32 a kWh. The company says it will accept no new applications to join the grid until it has settled concerns about the reliability of supply from the new producers. The Ministry of Economy, Trade and Industry (METI) is backing the utilities, and mulling a further tariff cut...
