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“Haddad Good For Capital Markets”


Source: G1.

Fernando Haddad is celebrated by one of those other business monthlies as a “Mr. Fix-It” mayor whose proactive management has calmed the skittish capital markets. 

In its November issue, British magazine Bloomberg Markets will shine a spotlight on measures adopted by mayor Fernando Haddad (PT) to restore order on the streets and in the financial markets after the wave of protests in June.

According to a preview of the article on the Web site of the publication, investors say that Haddad has succeeded in answering the demands of the protesters by issuing a list of promises on topics that range from public transport to governmental transparency.

The publication cites an interview with Leonardo Kestelman, director of Dinosaur Securities LLC, an investment fund with [R$?] 800 million in assets under management. He said that Haddad is taking visible measures, above all in the public transport sector. “A calm São Paulo is good for the markets,” the director told the magazine. 

Markets says that president Dilma Rousseff has transformed São Paulo into a critical focus of her responses to popular demands, citing the president’s TV appearances in which she announced R$ 8 billion for the federal growth acceleration program (PAC) . Bloomberg quotes an analyst from the Eurasia Group who says that everything that happens in São Paulo has a nationwide repercussion.

Eurasia’s man in Brazil is João Augusto de Castro Neves, a former congressional aide and professional talking head for the IBEP — Brazilian Political Studies Institute, which seems to exist only on Facebook. No, wait: check that.

In the magazine’s view, Dilma is counting on Haddad to restore lost confidence before the 2014 elections.

The article also cites proposals for the Strategic Master Plan, which will be presented to city legislators on September 26. The article explains a plan to densify development along the major axes of urban mobility and another to increase the stimulus the city government will provide the entrepreneur who designates the land on which a building is situated for public use.

“Hope” in the midst of corruption

The magazine says Haddad was chosen by the Lula government as Minister of Education amid “the greates corruption scandal since the dictatorship,” the “payola of the PT”*

“Payola” was a State Department translation for the mensalão scandal in a Wikileaked cable and a good one. It allows us to distinguish the several “payola” schemes currently worming their way through the system: “payola of the DEM,” “payola of the PSDB” ….

The text lists Haddad’s “good performance” as a federal minister, such as increasing the number of universities.

According to the Eurasia Group consultant, the PT wanted to renew its leadership and Haddad, from a new generation of party members, “is more of a technocrat and less of an ideologue.”

According to Bloomberg Markets the São Paulo mayor also “shook up” the municipal transport system when he cancelled R$ 46 billion in contract bids with bus companies.

An expert cited by Bloomberg says that “corruption in Brazil is like an out of control cancer, but even with terminal patients there remains a little bit of hope.” He adds, that Haddad established a muncipal anticorruption secretary [as one of his first official acts].

At the end the magazine concludes that “the rookie mayor hopes to leave his mark on São Paulo and in the 2014 presidential elections.”

Read it for yourself

Stocks Surge

Haddad, 50, has issued a flurry of pledges to improve everything from mass transit to government transparency after the sometimes violent demonstrations in June helped fuel a sell-off of stocks and bonds.

Brazil’s Ibovespa benchmark equity index plunged 11.3 percent in June, the worst rout in more than a year, before rising 15 percent from July 1 to Sept. 25. Sao Paulo, Brazil’s financial hub, contributes almost 12 percent of gross domestic product to a national economy that’s sputtering.

Brazil’s President Dilma Rousseff has made Sao Paulo, Latin America’s biggest city, with a population of 11 million, a focal point of her response to the protests.

The demonstrations that swept the nation began in Sao Paulo after Haddad raised bus fares by 20 centavos (9 cents). In July, Rousseff joined Haddad at city hall to announce that the government was giving Sao Paulo 8 billion reais ($3.5 billion) to help pay for the mayor’s transportation and housing initiatives.

With a presidential election in 2014, Rousseff is counting on Haddad, a fellow Workers’ Party leader, to improve public services and help her regain the confidence of voters, says Joao Augusto de Castro Neves, a Latin America senior analyst in Washington at political risk firm Eurasia Group.

(On Sept. 17, Rousseff called off her state visit to Washington over allegations that the U.S. National Security Agency had monitored her e-mail and telephone communications with top aides.)

“As long as local government responds to the protesters’ specific demands, that will keep things where they are now and won’t undermine Rousseff’s election chances,” says Castro Neves, a Brazilian. “Everything that happens in Sao Paulo has national repercussions.”