Yet again I have been lax in my blogging… Life has been quite busy here in Brazil, and suddenly I woke up and it was the 1st July and half of the year had gone. And now it is less than 3 months until I move back home!
The biggest things to have happened of course are Dilma’s impeachment and Brexit… And that has had a very big economic impact here in Brazil in terms of the exchange rate. It is now less than 4.3 Reals to the pound. Which is a great improvement for Brazilians wanting to go abroad (similar trends against the dollar and euro too). And for those coming to Brazil for the Olympics, the strengthened Real has made it a bit more expensive again.
It is now just 1 month to go until the start of the Olympics. And there for sure is a lot still to get done. The metro is now at risk again the news is saying, needing an emergency R$1 billion to be able to finish in time. And even that ‘finished’ means open only for ticket holders and accredited people – not for general riders wanting to get between Barra and Zona Sul. Indeed the plan is that the metro would close again after the Olympics to complete the final works. Without the metro, getting out to the Olympic Park will be chaos I fear… The newly opened road between São Conrado and Barra has helped a lot, with an extra lane in each direction, but then one will be taken away for the Olympic Route Network, and instead of nice new metros carrying a thousand people in 15 minutes to Barra, it will be lines of buses carrying 50-60 people in… an hour? Of course, there always was going to be a bus – the metro stops at the start of Barra, where you then have to catch the new BRT (a dedicated walled off lane with big bendy buses) that runs to the Olympic Park then. But maybe a <1 hour journey time from Zona Sul to the Park could comfortably become >2 I fear.
There’s been a lot of scaremongering over the Games… From police protests at the airport saying ‘welcome to hell’ advising people not to come to Rio, pollution scares, Zika… Living here, I haven’t seen any real change in policing, and the biggest part is being provided by the miltary anyway. And emergency loans to pay for security have been approved. The pollution in the bay is quite worrying, but talking to people who have been sailing there, they suggest it isn’t quite as bad as some of the media are making out. Plans to make use of certain tidal conditions etc. can reduce the impact a lot. It is of course very sad that over the previous 7 years almost nothing has managed to be done to cut down the pollution…
I was talking to some people over the last couple of weeks who have suffered indirectly in another way from the Olympics. Rio state is officially in a ‘catastrophe’, and indeed some police, firefighters, health care workers are not being paid. But state managed schools and universities have also been suffering – the state university in Rio has been on strike for 4 months now! Countless schools over the state have been shut too. A generation of people are suffering – 4 months of education is a lot of time to miss and have to make up. There is a complex mix of city, state and federal systems. City and Federal are working ok still, but State is not. Emergency government funding to the state is being prioritised towards Olympic Security, and still universities remain on strike over pay. From a small city a few hundred km from Rio, I’ve heard that initially teachers were being paid half of their salary, with plans to pay the rest in instalments, before the money stopped flowing all together.
But I don’t think it is far to blame this on the Olympics – for me it is down to chronic mis-management of projects, corruption and embezzlement. There should have been enough money for everything, even despite the economic downturn. The metro for instance, to suddenly find itself a R$1 billion short… that isn’t a small sum of money to sudden find missing in the last 30 days, only 30 days after saying everything is now on track!
And the requested loan for the R$1 billion for the metro? BNDES, the Brazilian government’s development bank that does investment loans, will not lend any more money until the payments are made on the existing loans… which of course they are behind in paying. The new loan is in part to go in paying the old loan… Look, it is all the government in the end, be in city, state of Federal. Make things happen!! The eyes of the world are in Brazil, and silly political infighting and divisions will only help achieve failure of the world’s largest sporting event.
It may not be the most popular thing in Brazil right now, it may be blamed for funnelling money away from areas where it is needed. But 95% of it has been spent now. Either get the last 5% completed, or see the whole 95% of it just wasted on a project that might fail.
Actually this isn’t where I was intending this blog post to go…. but it seems I started on a little rant!
The final three months for me are going to be a hectic, fun, crazy time. From working 24/7 shifts, seeing some of the Games, and preparing everything to move back to the UK! German House is a short distance down the beach from me in Leblon – I have very good memories of many nights or afternoons in German House in London, as again it was pretty close to my house!
I feel like we are in the middle of a soap opera right now… Or an episode of House of Cards.
Lula is investigated, then charged. Then Dilma offers him a place in the cabinet, potentially to avoid prosecution, then a court blocks the appointment… The suspense, the intrigue!
So of course we have lots more banging of pots, and a few protests (at weekends, at least here in Rio). But in terms of actual action, there’s plenty of words but very little chance of change it seems. The judge who seems to be on a mission to ‘get’ Lula has perhaps overstepped the mark by releasing a wire-tapped phone conversation between Lula and Dilma for instance in an attempt to get the public even more against Lula.
But what do I mean by the public… by all accounts the protests are very much by the white middle and upper class Brazilians, with figures like 75% of all protestors having a university degree while the national average is far lower, and a similar figures for skin colour, incoming brackets etc. So certainly a section of Brazil is up in arms, and a large percentage of that demographic. However, a lot of the population is behind Dilma still, despite all the turmoil, the evidence of corruption, the economic downturn… And this is a large percentage of the population. Dilma’s policies may be hurting the economy, and making a joke of Brazilian politics on the world stage, but she is still putting money in the hands of some of Brazil’s poorest – it’s just money that Brazil doesn’t have to spend right now.
I think this episode of the Colbert report sums it up (although it’s not quite up to date with the latest…)
So, what else… We are now less than 5 months to the start of the Olympics! In fact, in 5 months the Olympics will be over and we will be working for the start of the Paralympics. Exciting and very busy times! There are of course lots of worries about what will and will not be ready – the Olympic Parks have come along well, with a lot of venues already having hosted test events. However, getting there could be more interesting… The main park, located in Barra, should have been accessed by the new metro extension and a ‘BRT’ – a dedicated section of the road for buses. Unfortunately, there are now big questions over whether the metro will actually be ready or not. Contingency plans are in place for the BRT buses to run in fact from Ipanema all the way to the park. This would be a near disaster… The traffic between Zona Sul and Barra is terrible most of the time, so I presume these contingency plans involve extending a dedicated lane just for the BRT buses all the way from Ipanema to the start of Barra. This is in most parts a 2 lane road that is already a nightmare – if they do this the normal traffic will be unimaginably worse. There’s been talk of lots of public holidays during the Games, which would in turn harm an economy already struggling. So we will see…
Oh, the economy. Actually the exchange rate has made a huge recovery in the last month. From dropping down to 6.3 to the GBP back in September, it has been below 5.2 in the past week. There’s two factors in play – the weakened pound because of uncertainty over EU membership, but the strengthening of the Real. With each charge of corruption against Lula and the potential steps towards impeaching Dilma the currency got a bit stronger… Is this the only country in the G20 where the currency gets stronger when there is talk of impeaching its leader?!
Record levels of the Real against the US Dollar and the Pound… That’s nice isn’t it! If you are a tourist coming here. For a Brazilian, it is making going to the US or Europe extremely expensive. Indeed I understand that flights to the US are being cut back as Brazilian passengers are thinning out. There are however some excellent deals on flights right now to the US – I saw a return to JFK from Rio for just $350 USD the other day on AA.
Today we are trading above R$4 to the USD, and R$6 to the GBP…
And in other good news… This weekend there was a lot of trouble and violence in Zona Sul. On Sunday and Monday there was a series of muggings and attacks around the beaches in Copacabana, Arpoador and Ipanema. There was a major arrastão on Sunday, and a series of different incidents on Monday, stretching as far as Botafogo and Humaita, rather than the normal tourist heavy hotspots…
On Sunday we were out having lunch near Praça General Osorio, and were told to be careful leaving as there was a big fight going on just a few meters away on the beach. Needless to say, we went the other way.
What’s happening?! Yes, it was a nice weekend, but there are plenty of those… 2015 has seen more arrastãos in a month sometimes than I heard of for the whole of 2014. Maybe I just pay more attention now, but for sure they have increased. For those not familiar, an arrastão is where a load of kids/guys storm through somewhere, mugging everything they can… And unfortunately it seems to be becoming a regular occurrence on the beaches in Zona Sul.
It was never the safest place in the world, but for me I see so many things going down hill….
However, on the plus side, I now live only a few tens of metres away from a new branch of Guerin, one of the best bakeries in Rio for french style breads. Having said that, I actually think the croissants in Zona Sul have been better lately!! Heresy some might say, but from arriving and finding all bread was terrible, it has improved a lot… just not that cheap, unless I think in pounds now… then things do start to seem cheap here now at R$6…. My mind moved from a divide by 3, settled on a nice divide by 4 technique in 2014, and slowly pushed to divide by 5… now I have to keep learning… maybe I need to refresh my 7 times table for when I need to know that, and at the rate it is going, it might even be by the end of the year!
So a bit of a bad period financially again it seems in the world…
Chinese stock market crashes, depression in the US and European markets…
And Brazil is in a recession, even if it seems to be in the depths of denial! On an campaign video two weeks ago PT (Dilma’s party) were talking about how there is no crisis, it is all down to the media overplaying it and scare mongering. This week she has made a statement saying that perhaps it is worse than first realised…
And I see no where better to show that than a look at the exchange rates. For me, I am interested in the rate against the pound.
Today we are close to hitting R$5.6 to the GBP (oops… I checked at midday, seems we have shot past 5.6 since then to 5.64). When I first arrived in Brazil it was around 3. Enough said? Actually, perhaps a few pictures can be worth a thousand words!
Looking at the last 90 days (all rates courtesy of Oanda) shows quite how much it has changed lately, from 4.8 to 5.6 representing almost a 20% swing, which for any Brazilian wanting to go abroad makes it a very expensive prospect…
In fact, looking back at the 3 years I have been in Brazil, it is a fairly solid trend of increasing. I have highlighted the 2.9, which was around when I got my Brazilian work contract.
In fact, we have to go back a long time to find when it was last like this! 2002 was the previous time the exchange rate reached these levels… In fact, in the last 20 years, it has only been anywhere near here twice, and had a very volatile journey from 1995 to 2015… From around 1.5 to 5.9!
But for a Brazilian, the current state of the economy must be very worrying. I had hoped that the rate was stabilising, but it seems not with another increase over the last 2 days. There’s lots of people talking about setting a new record of hitting 6 by the end of the year… It doesn’t even look like we will have to wait that long unfortunately.
Of course, for anyone visiting Brazil, now is a great time, and in fact every day is that little bit better! I’ve had many posts in the past about how expensive things here can be, however now some things that used to seem expensive are now seeming far more reasonable when I think in terms of pounds. And as a fan of fine dining, Rio and São Paulo can have some true gastronomic bargains going on with a great set of Michelin Star restaurants to visit, as well as just a great set of restaurants that didn’t quite make it in the first ever Michelin Guide for South America. For me, there’s a visit to D.O.M. is coming up in October and I can’t wait!
So my promise to post more regularly…. seems to have taken me 4 months to get to this post! And it has been a very busy and hectic four months indeed, both with work and personally. But that’s not my excuse for not posting!
I’m having a nice postponed weekend of Monday and Tuesday off, as we are in the heart of Test Events for Rio2016 right now, meaning I end up working some odd days and hours. I do like having midweek days off sometimes, it can be a lot quieter to get things done than weekends.
In more recent memory, August has had the most fantastic spell of weather, with only around 2 or 3 evenings with some light rain. Other than that, it has been a beautiful 25-30 every day. However the drought situation, in São Paulo especially, hasn’t gone away; there is a desperate need for lots of rainfall. It’s been spoken about for months, even years, about how bad the situation is. In Rio, although there have been some warnings, the situation is not as drastic. I understand they have rolling water outages in some areas of São Paulo, with people getting up at the very early hours to collect buckets of water as water isn’t flowing during the day. And of course, when the majority of the electricity comes from hydroelectric power, that means power outages too.
At home, we are now the proud owners of a new sofa!! I wish I had done this long ago – truly live transforming to have a big comfortable recliner sofa in front of the TV:) We had the sofa that came with the apartment as the back of the room, and a bean bag chair and a couple of dining chairs at the front to watch TV – not the most comfortable arrangement always, especially with any guests round. With the decline of the Real against the Pound, it does make some things here now far more affordable. Indeed, even imported goods now don’t always seem extortionate! At last check, it had reached 5.5 R$ to the £… From 2.9 when we arrived here in 2012…
Of course for someone paid in Reals, it doesn’t make a difference to the costs here, but for someone whose salary is based in Euros, Dollars, Pounds etc, it makes the city seem far more affordable all of a sudden. Unfortunately, the other way round is also true – Brazilians going abroad now are having holidays costing a hell of a lot more than a few years ago. I’ve heard that some of the airlines are cutting down their frequency of flights to the US, as they just aren’t getting the passengers right now because against the dollar, it has moved similarly from just above 2 to around 4 dollars to the Real now.
This month saw 1 year to go onto the Olympics, and at the rate this year is flying by, it really won’t be long until we get there! Although for sure there is a lot of work to be done still, progress in some areas is picking up, and there are some good signs out there. One of my biggest worries is the metro extension to Barra. There has already been some noises about this not being ready on time, and if it is not ready for the start of the Games, getting to the Olympic Park would be a nightmare. Even with the extension, it won’t be easy – a metro followed by a bus (BRT – big bendy busses running in private lanes). Without it…. it would be chaos for sure.
In front of my apartment I have a new station being built, that actually looks to be making good progress now (although very late from when I first moved here and it was expected to be done). The station entrances are up, but there is still lots of heavy construction going on – who knows what is underground! Further down the road however at the location of the next station, or some of the areas where they are doing work above ground, I really can’t see any change above ground in the last year really… And this is only in the first 4km of the extension. For some odd reason, there are only putting one single stop then in São Conrado, and then another in Barra. There for sure is plenty of work going on in Barra, and with it being several months sometimes between when I go that way, I can see big changes each time I do go.
What I haven’t seen any news on lately is where the tunnel is, which was heavily set back by subsidence in Ipanema when they first started tunnelling. The surveyors are there every day measuring still, although actually I have seen them less in the last month it seems, so perhaps the tunnel is now past us and moving on?
Owning a cat is always an adventure! Only one major breakage so far (a lamp)… And trying hard to make sure the sofa remains scratch free. She does like sitting on it… taking up the largest seat for herself of course!
Oh… and I smashed my rather nice Riedel swan neck decanter…. we moved it to keep it safe from the decorators who were in and the cat, and then I broke it forgotten where it was… And then last night I also cracked my oldest decanter, which although cheap (I think €10 or 15 from 2004!), it had survived a lot of journeys and a hell of a lot of wine through it! But a slight knock had a crack spread unfortunately. So now no decanters… But, as it has been pointed out to me, these are just material things, which even if the exact one cannot be replaced, the role it serves can easily be replaced. This is not true of everything. So, taking advantage of the exchange rate, Riedel glass wear is far cheaper in Brazil right now than in the UK! So time to build a new collection, and hope it survives shipment back to the UK!
Let’s see how long it takes me to post next time… Hopefully not another 4 month gap!
So I witnessed my first banging of pots today.
My street in Ipanema became alive with people leaning out of windows, shouting ‘Fora PT’ (Out PT) while banging on various kitchen pots and pans. I was thinking I can’t see the UK having a similar level of protests against a political party, especially in an area which is the second most affluent area of Rio de Janeiro after Leblon. Admittedly, I don’t think the UK achieves quite the same level of political corruption scandal.
The protest in Rio today was somewhat smaller than some of the ones in June 2013, with ‘just’ 25,000 people taking part. São Paulo attracted more, with a rumoured half a million. Most people don’t expect anything to come of it however, certainly not the rumoured impeachment. But certainly the country is expecting more from its government now.
It’s been a while since my last post… And the most significant thing, to me at least, is the exchange rate. Today is R$4.79 to the pound. If the current rate of growth continues, we are on to hit R$5 to the pound! This is from R$3 when I first arrived at the end of 2012, and indeed from just under R4$ at the end of January this year…
This makes it very expensive for Brazilians going abroad – the trend is similar to the Euro and USD. For expats over here, especially if they send money back home, their income potential is also decreasing rapidly. But it also translates in to what things cost. For imported products, these costs are being passed on to the consume, along with inflation at rates far higher than we are used to in Europe (but with interest rates also much higher). A kitchen appliance I purchased in early 2013 I saw for twice as much on the shelves yesterday, now on ‘offer’ for only 50% more…
Which makes it odd that somehow I achieved a bargain on my new TV with a huge discount.. not sure why it was so cheap – indeed with the exchange rate, I paid less than it costs in the UK by quite a bit!! But why would I need a new TV… I may have lied when I said the exchange rate was the most significant thing! Another flooding of my apartment…
In a heavy storm a few weeks ago, my ceiling decided to leak… a lot. I woke up to find both the MacbookPro and the TV having had a large drink with water having come in from the ceiling directly above where the TV and Mac were living. Thankfully my building has insurance that covered the damage, as it was caused by a problem with the building itself. It did lead me to discover quite how insanely expensive Macs are here though! Back to the exchange rate… The new model I purchased in the UK was close to 50% less than here. Which is why the TV is so odd being such a good buy!