Monday, January 31, 2011

Top executive salaries are paid in... São Paulo

The Economist, January 27, 2011

This week's The Economist is running an article on a market study on executive pay. In Brazil, specifically, São Paulo, pay is highest, with generous bonuses to boot - coupled with extremely high taxes, this makes hiring executive professionals daunting. Even without the real valorization, São Paulo is an expensive place to hire top-execs, when you get them.

In addition, a befriended Blog (Expat American in Brazil) confirms what I have also noticed: Scarce local labor (especially on a high level) is starting to make an export of labor from other countries an option - in addition to trying to get Brazilian Expats abroad to return to Brazil.

Friday, January 21, 2011

Recycling Paradise

According to one number, the citizens of the city of Sao Paulo produce 17.000 tons of trash every day. Other estimates put the garbage at up to 3.5kg per capita per day, a whopping 40.000 tons.

Regardless of the exact amount, a mere 1% of this gets recycled, compared with 23% in Curitiba. Cities in Germany have a minimum of 35%, most much more.

One would think that there are not enough incentives for this, right? I do not think so. Thousands of people make a living, collecting recyclable waste and bringing this to cooperatives that re-process the material. Usually, these are very poor people that pull their carts, paper and plastic piled high - more fortunate drive around with ramshackle cars and trucks, collecting what they can. And the returns are not so bad. Carton sells for R$0,50, Clear plastic for R$1,00 and Aluminum for up to R$3,00.

Let's do the math. Assuming Sao Paulo could elevate the recyclingquote to 20%, at least 3400 tons per day would be recycled - 1.2m tons per year, at a value of at least 620m BRL.

And while I do this math, Sao Paulo is forced to export trash, as all city landfills are full and the only incinerration plant IN THE COUNTRY is still in construction.

I smell a pretty solid business plan. (no pun intended)

Thursday, January 20, 2011

Bring us your money!


The Brazilian Central Bank raised the interest rate by 0.5% to 11.25% in yesterday's meeting. This puts the government in a difficult situation: They raised inflow taxes, then they twisted December numbers to make borrowing more expensive without raising interest, but now had to do someting.

Brazil continues with the highest real interest rate in the world, at 5.5%. Second place is... Australia, with a mere 1.9%.

And the analyst buzz is that interest rates will continue climbing, peaking around 12.25% at year end. I smell inflation:

For Portuguese-Readers:

Wednesday, January 19, 2011

Farm of the Future

Last year, The Economist ran an article on Brazil's "Agricultural Miracle". Hank Pellisier ran a digest of this article and a few others and condensed it in "Brazil: Future Farm of the Planet?".

It's well worth a read. Just to show you some of the potential in this country, here are some facts Hank dug up about Brazil's agricultural ranking:

Chickens: 1st in the world, 41% of export market share
Coffee: 1st in the world, 27% of export market
Orange juice: 1st in the world, 82% of export market
Soybeans: 1st in the world, 38% of export market
Beef: 1st in the world, 26% of export market
Sugar: 1st in the world, 39% of export market
Ethanol: 1st in the world, 52% of export market
Tobacco: 2nd in the world, 17% of export market
Bananas: 2nd in the world, behind India
Pork: 3rd in the world, 15% of export market
Corn: 3rd in the world (behind USA and Argentina)
Black pepper: 3rd in the world (behind Vietnam and Indonesia)
Cotton: 5th in the world (USA is the leader)

Monday, January 17, 2011


The title is probably offensive to some, but I just was treated to a piece on the news channel Globo News about how the rain caused all these horrible mudslides in Rio with all those deaths.

I am in Brazil for in the third year and I do recall hearing the same in the past. Thanks to google news, I can check if I am halucinating. A search for "chuva deslizamento", classified by date brings up, in no particular order, a few news articles:
And, what should be done about it? Right: an alert system for natural disasters is supposed to be set up within four years. I wonder what that is supposed to be good for? According to CBN radio, about 150.000 people live in endangered areas in the city of Sao Paulo alone. A bit of proper planning and zoning would surely help - but that probably requires too much... well, planning - and does not make up for some nice emergency government meetings.

And don't think that it is only the poor getting affected. I currently have a view on a pending disaster in my back yard. The first picture is from December 18 of last year - observe the last site which carved out a piece of the hill.
And now look at the picture below, taken last week.

It probably would be a good idea for somebody from the city to take a look at the site - in the interest of those living in the 24 floor building on top of the hill.