Bloomberg News

Brazilian Revolt Claims Second Life as Violence Erupts

June 21, 2013

Brazilian Revolt Claims First Fatality as Protests Turn Violent

A protester uses a mobile phone as he walks past a fire during demonstrations in downtown Rio de Janeiro, Brazil. Photographer: Dado Galdieri/Bloomberg

Brazil’s swelling street rebellion claimed its second fatality in the largest and most violent protests yet, as 1 million demonstrators rallied for better public services and an end to corruption.

Marches took place in hundreds of cities across Brazil last night in what began as a peaceful protest. Violence later erupted with police battling mobs trying to storm the Foreign Ministry in Brasilia and Rio de Janeiro’s city hall.

In the northern city of Belem, a 54-year-old street cleaner died today after having a heart attack during the protests there, local health officials said. Yesterday an 18-year-old was killed when a vehicle accelerated into a crowd in the city of Ribeirao Preto, the military police said. The Free Fare Movement that helped organize protests in Sao Paulo said today it wouldn’t call new protests for now.

President Dilma Rousseff, who has been struggling to get in front of the mass movement, met with cabinet members today to discuss emergency measures to help quell violence and prepare proposals on education, health and other demands of protesters, a government official aware of her agenda said.

The movement triggered by an increase in bus fares this month has spread amid a groundswell of discontent among Brazil’s middle class. While faster economic growth helped lift 40 million people out of poverty over the past decade, a recent slowdown and faster inflation threaten to erode social gains.

Market Sell-Off

“The people have the grit to continue,” Natalia Lustoza, a 20-year-old college student, said in Brasilia. “The protests will only end when we see politicians solving our problems.”

The unrest comes less than a month after thousands of people turned out on the streets of Turkey, as anger over the redevelopment of a park turned into a broader protest against the government.

The crisis in Brazil comes as the nation’s stocks, bonds and currency are being battered by an emerging markets sell-off and the economy struggles to recover from its second-worst performance in 13 years. The world’s second-biggest emerging market will grow 2.49 percent this year after expanding 0.9 percent in 2012, according to analysts polled by the central bank.

The real gained 0.6 percent at 3:32 p.m. local time to 2.2439 per dollar after falling to a four-year low yesterday. The currency is the worst-performing this month among 24 emerging markets tracked by Bloomberg.

The Ibovespa (IBOV) stock index fell 2.3 percent, heading for its fourth straight weekly drop, as investors abandon emerging markets on expectations the Federal Reserve will begin tapering a bond-buying program that has flooded emerging markets with cash in recent years. The index has slid 23 percent this year, the worst performer among the world’s 20 biggest equity markets.

Yields Climb

Average Brazilian dollar-denominated debt yields climbed above 5 percent this week from 3.6 percent in early May, according to JPMorgan Chase & Co. indexes.

Slideshow: Thousands Protest in Brazil

Brazil’s annual inflation through mid-June accelerated to 6.67 percent, its fastest pace since November 2011. Urban bus fares rose 1.83 percent in the month through mid-June and made the greatest impact on inflation of all components.

The largest demonstrations last night were in Rio and Sao Paulo, where authorities this week revoked a 20 centavo (9 cent) increase in bus fares that became a rallying cry for frustration over the quality and cost of public services. Yet protesters, who largely organized via social networks, marched in 388 cities across the nation of 195 million inhabitants, according to Agencia Estado.

Canceled Visit

“These protests can’t be calmed just with talk,” Oded Grajew, a former businessman who in 2002 helped elect Rousseff’s mentor and predecessor, Luiz Inacio Lula da Silva, said in a phone interview from Paris. “The government needs to come up with concrete answers for this movement not to spin further out of control.”

Rousseff yesterday canceled a state visit to Japan set to begin next week to manage the crisis. Since being jeered by soccer fans June 15 at the opening match of the Confederations Cup, Rousseff, a member of the Marxist underground that battled Brazil’s 1964-1985 military dictatorship, has vowed to listen to what she called “the voices on the street.”

The protests are the largest since those in 1992 that pressed for the impeachment of Fernando Collor, the first directly-elected president following the dictatorship. While the movement may lose steam with its initial and unifying demand met, the situation will remain tense between now and next year’s presidential election, said Joao Augusto de Castro Neves, an analyst at political risk consultancy Eurasia Group.

‘Quality of Life’

“More and more the middle class is focusing on the quality of life agenda,” Castro Neves said in a phone interview from Washington. “They don’t just want a cellphone, they need the phones to work well. They don’t just want cars, they want cars that can ride on the street without traffic jams or potholes.”

The approval rating of Rousseff’s government has fallen eight percentage points to 55 percent since March, mostly over growing discontent with quickening inflation, according to an Ibope poll published this week.

Magnifying protesters’ demand is Brazil’s hosting of the Confederations Cup. The two-week tournament is a warm-up for next year’s World Cup, whose price tag of 30 billion reais has also drawn ire in a nation where 21 percent of the population still lives below the poverty line.

World Cup

At a match last night between Spain and Tahiti, fans inside Rio’s Maracana stadium held up a banner reading “We Don’t Need a World Cup.” Another, displaying the image of Rousseff in her days as a militant, vowed “Our Fight Has Not Finished.”

FIFA staff at the stadium in Salvador yesterday were told to wait and travel together in a specially organized bus because of the protests there, according to a FIFA official at the stadium who isn’t authorized to speak to the press. They usually share a fleet of seven or eight cars to travel between their hotel and the Fonte Nova arena.

Almost 1 million people marched in 27 capital cities, Folha reported, citing police estimates in each state. That’s four times the estimated turnout on June 18, which was the previous record for the growing movement.

Rio Violence

In Rio, O Globo newspaper estimated 300,000 people turned out yesterday. While the demonstrations there were largely peaceful, a group of stone-throwing protesters who set upon city hall were met by cavalry and foot soldiers firing rubber bullets. More than 60 people were injured, including eight police officers, Mayor Eduardo Paes told reporters today. In Brasilia, more than 120 were hurt, according to Globo TV.

Sergio Cabral, governor of Rio de Janeiro state, said police acted appropriately given the tension generated by some protesters’ use of violence. Any reports of excessive use of force will be investigated, he said.

A leader of the Free Pass Movement, Rafael Siqueira, said today the group was calling off new protests in Sao Paulo to reflect on how to proceed, and because other groups are taking advantage of the marches to carry out acts of violence.

In Ribeirao Preto, a city in the prosperous farm belt surrounding Sao Paulo, a Land Rover mowed into a small crowd, injuring three and killing Marcos Delefrate, who became the first victim of the student-led movement, Folha said.

“We’ve taken the first step,” said Fabiean Jambeiro, a 25-year-old human resources professional whose parents only obtained a middle-school education. “Now that everyone is in the streets we’re going to achieve more.”

To contact the reporters on this story: Joshua Goodman in Rio de Janeiro at jgoodman19@bloomberg.net; David Biller in Rio de Janeiro at dbiller1@bloomberg.net; Raymond Colitt in Brasilia Newsroom at rcolitt@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net


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