Groundhog Day in Brazil

No, this is Barcelona airport (and yes, it is in operation)

I came back from Spain last weekend and came through two airports there: Palma and Barcelona. Both are huge and whereas Palma is a bit old, it is still fairly efficient and even sports valet parking. Barcelona by contrast is a modern, efficient and great airport to fly into and out of or to connect through: Transit is fast, waiting times short, with a great shopping area and a pretty good Spanair lounge.

Then I flew into Guarulhos and noticed how much there still is to do...But the airport claims to be ready for the world cup, with a MOP (Modulo Operacional Provisiorio, i.e. a provisional terminal). I was also "lucky" to experience this MOP on a business trip this week: Whoever has flown through many of these RyanAir airports in Europe will be able to picture this well: A very simple structure with many chairs and a small counter which sells semblances of food - if you are willing to fork out 3.00USD for a bottle of water - has the charm of a bus station. Oh yes, my flight also left late and came back late the next day... And I also did not find a parking space, I did what everybody does. As there is no alternative and the generous 3000 spaces are never enough...

What else is new this week?

• The minister of tourism quit after allegations of corruption - that is number 5 this year. The new minister (also from the PMDB) has named his number one priority getting ready for the world cup. Sounds like Groundhog Day to me.
• A new hobby of thieves, blowing up ATMs, seems to be catching on. This week, the 500th (yes, five hundred) ATM was blown up trying to get some easy money. Unfortunately for the culprits, the money was tainted with special ink, as is the case of most ATM if they are tampered with. The Civil Police is searching chemical industries in the whole region for possible losses of chemical products used to make explosives... 500 ATM, that is alot of explosive in just 9 months...
• Inflation is expected to hit around 7.5% this year, and GDP growth should not surpass 3.5%
• The USD hit a 12-month high vs the BRL - this will help exports and possibly slow down some speculative capital inflows
• To protect the Brazilian car industry, the government has increased the IPI (a tax) for small cars with no Brazilian components to 35% (up from 7%)
• Construction Workers at the 2014 World Cup Stadiums in Rio and Belo Horizonte have been on strike (B.H. sind this week, Rio since September 1)

Looks like the last couple months will not be boring. ;-)

UPDATE 17.09.2011: According to the Infraero website, the MOP in Guarulhos is not temporary, but can be used "for a very long time, if required".

1000km of traffic jam... every day

Lies, nothing but lies...

(Picture by: Mariordo Mario Roberto Duran Ortiz/Leticia Ferreira)

I just read that in 2010, Germany had a total of 400.000km of registered traffic jams. I am not really sure how those were computed, but I assume they took the maximum length per occurence. This would then amount to a total of 1095km per day. The automobile club ADAC, the voice of all German drivers, advocates building more and better streets, claiming the situation to be unbearable.

Clearly, nobody from the ADAC has ever been to São Paulo. On any single day at any single time, please feel free to visit the website of Apontador/Maplink, which, in a partnership with the Radio Station Sulamerica (specialized in traffic reports and affiliated to the insurance broker ING), will show you a picture that would make the Germans gasp.

On a normal day, before and after rush hours the website will register between 150 and 200km of traffic jams. In the mornings and evenings, the length can easily double. So, if we take morning, noon and evening as separate incidents, we also get 1000km of traffic jams a day... just in the metro area of São Paulo.


Personally, although I don't feel that way, I can be considered lucky: I have a 33km commute and it takes me 45-60min in the morning and 60-70min in the evening, putting my average speed at about 35-40km/h. The average in São Paulo is below 20km/h. The reason for my "luck" is that of my 33km, I have 29km on 2-4 lane expressways and drive against the flow (I live in town and work outside). Nevertheless, awful situations occur: A few weeks ago, like every morning, I left home at 6:25 - and I arrived at work at 10:40...

Time Magazine ran this nice article a few years ago, and every single word is true. Recently, I had a meeting scheduled for 9:00 on Avendida Paulista (downtown) and I live in the southern zone, ca. 18km away from there. I decided to play it safe and left home at 7:30. At 9:00 I was sitting inside a McDonald's, reading a newspaper and sipping a cappuccino after calling to the meeting and telling them I could not make it (nobody was upset, everybody understood the reason). I had simply given up

Why all of this? Road infrastructure is a mess, public transportation is not even close to adequate (I have seen small towns in Germany with a subway network of similar extension to the one in Sampa) and the amount of cars is amazing. The city of 11m people of has a total of 7m registered vehicles, of which 5.1m are passenger cars... and 1000 additional ones are added every day...

Gentlemen, start your engines

Brazil has a long history of a local vehicle manufacturing industry. In the 50s, Toyota built the famous Bandeirante, then in the 60s Volkswagen setup a factory to build the Kombi and then Fusca. And it went on from there. Today, the assortment is broad with Nissan, Renault, Peugeot, Citroën, Honda, Hyundai, Chrysler and Audi producing locally on their own or in partnerships, apart from the established VW, GM, Ford and Fiat. The only local company producing is Troller, which builds jeeps said to master any terrain.

But the latest coup is from Hyundai. Already with an OEM in the Goias state (with CAOA), the Korean firm is now setting up shop in Piracicaba (roughly 100km from Sampa) with a factory that will be the largest outside of Korea. Next year, up to 3000 Korean expats are said to start coming there to prepare all the engineering work and production setup. Hyundai will overtake Ford as 5th largest producer in Brazil in 2013 and already today has 3% of the market - the plant, a total investment of 600m USD, will boost this growth. Local business is already excited: Real estate prices have shot up since the announcement last year and even a golf course is under construction to accomodate Korean Execs.


The investment makes so much sense because importing to Brazil is prohibitively expensive. Duties are 35%, local taxes another 60%, plus fees means that the local price will be roughly double of what a car costs abroad. If Hyundai can keep a part of this money in its own pocket and keep growing like they have, this will mean great business.

In addition, more local manufacturing will help the Brazilian economy further diversify away from commodities - even if under the current exchange rate scenario, importing is so cheap.