En Español



Very usefull links



PW
Bookstore





Institutional
links


OPEC
\





 




PW
Business Partners

 


IRAQ OIL THE FORUM

 


Blogspots

FxHQ Forex News

The Global Barrel

Tiempo Cultural

Gustavo Coronel

Iran Watch.org

Le Blog des
Energies Nouvelles

News Links

AP

AFP

Aljazeera

Dow Jones

Reuters


Bloomberg

Views and News
from
Norway

 

 


Editorial/Opinion

 

Bloomberg View's: Brazil's Petrobras
probe takes another twist


Petroleo Brasileiro SA Petrobras (ADR) Stock Surges After Lula Detention

The detention of Brazil's former president Luiz Inacio Lula da Silva marks a new stage in the corruption probe that has all but paralyzed the government for the past two years. Meanwhile, as that drags on, the economy keeps spiraling downward . One way or another, Brazil urgently needs to resolve the scandals and turn its focus back to the economy.

Lula, whom U.S. President Barack Obama once called the world's most popular politician, now tops the Who's Who of Brazilian leaders caught up in the investigation of a vast influence-peddling and kickback scheme involving the state-controlled oil company Petrobras. (He has repeatedly denied any wrongdoing.) Others ensnared include tycoons in construction and finance, the heads of the legislature , the former treasurer of the ruling Workers' Party, and the chief campaign strategist of Lula and his successor and protege President Dilma Rousseff.

Brazil's Highs and Lows

One sign of the longing for finality in this saga is that Brazil's currency and equity market rallied on the news of Lula's detention: It revived hopes that some kind of closure might soon be achieved. Rousseff has so far not been directly implicated in the Petrobras scandal, though the legislature has been weighing a move to impeach her for allegedly doctoring fiscal accounts and fiddling her campaign finances. The street will also have its say: Lula's detention has already sparked unrest; meanwhile, big pro-impeachment rallies are planned for March 13.

What matters most is that the issue be brought to a rapid conclusion. Until that happens, investors are right to be alarmed. Brazil's economy is shrinking -- by 3.8 percent in 2015, the biggest drop in 25 years. Output is projected to fall another 3 percent in 2016. The economy is enduring double-digit inflation, a depreciated currency, worsening unemployment and falling business confidence. Visitors to this summer's Olympics in Rio might be forgiven for thinking they've come to a wake rather than a celebration.

Addressing these problems requires a wholesale rethinking of the policies Lula and Rousseff have pursued. In many ways, they failed to channel the benefits of the commodities boom into productive investments, and they pursued pro-cyclical fiscal policies that left the country vulnerable to the inevitable reversal. Statist management turned Petrobras and other public enterprises into sources of patronage, and rewarded corporate donors with contracts and financing that should have gone to smaller, more deserving firms.

Rousseff and Lula can't be blamed for China's economic slowdown and the ensuing fall in the price of oil and other commodities. But Chile and Colombia, among other Latin American nations also hit hard by those forces, are still growing -- thanks in part to strong fiscal management, greater transparency and better-run state industries.

Against opposition, Rousseff has taken some steps in the right direction -- for instance, moving to reform pensions, loosen the state's grip on Petrobras and allow foreign investors a bigger share in airlines. But this isn't nearly enough. Brazil needs a radical pruning of the government bureaucracy and a complete overhaul of its tax code and labor laws. Rousseff's struggle to survive precludes such measures.

The scandals have been productive in one way, bringing forth a newly empowered judiciary and prosecutors. But throwing corrupt politicians in jail won't be enough to lift Brazil from its doldrums. That requires a leadership focused on economic reform.

Bloomberg View's are editorials by Bloomberg Editorial Board. Bloomberg is one of the leading financial news media companies in the world. Senior editor responsible for Bloomberg View's editorials: David Shipley at davidshipley@bloomberg.net. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by Bloomberg View's on March. 04, 2016. Petroleumworld reprint this article in the interest of our readers.

Editor's Note: All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld. All comments expressed are private comments and do not necessary reflect the view of this website. All comments are posted and published without liability to Petroleumworld.

Use Notice:This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of environmental and humanitarian significance. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml.

All works published by Petroleumworld are in accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.Petroleumworld has no affiliation whatsoever with the originator of this article nor is Petroleumworld endorsed or sponsored by theoriginator.

Petroleumworld encourages persons to reproduce, reprint, or broadcast Petroleumworld articles provided that any such reproduction identify the original source, http://www.petroleumworld.com or else and it is done within the fair use as provided for in section 107 of the US Copyright Law.

If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. Internet web links to http://www.petroleumworld.com are appreciated

Copyright© 1999-2009 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ stories by anyone provided it mentions Petroleumworld.com as the source. Other stories you have to get authorization by its authors.Internet web links to http://www.petroleumworld.com are appreciated

Petroleumworld welcomes your feedback and comments,
share your thoughts on this article, your feed. back is important to us!

Petroleumworld News 03/07/2016

 

We invite all our readers to share with us
their views and comments about this article.

Follow us in : twitter / Facebook


Send this story to a friend

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8 +/ 800x600 pixels



 


TOP

Editor & Publisher:Elio Ohep F./Contact Email: editor@petroleumworld.com

Contact:
editor@petroleumworld.com/ phone: Office (58 212) 635 7252,
or Cel (58 412) 996 3730 / (58 414) 276 3041 / (58  412) 952 5301


CopyRight © 1999-2010, Elio Ohep F.- All Rights Reserved. Legal Information

- CCS Office Tele
phone/Teléfonos Oficina: (58 212) 635 7252

PW in Top 100 Energy Sites


Technorati Profile


CopyRight © 1999-2016 Elio Ohep F. - All Rights Reserved.
This material may not be published, broadcast, posted online, rewritten or redistributed by any type of means, except with permission of the author/s

The information in this web site is proprietary and is protected under United States and International Copyright and Trademark laws. No part of this web site may be reproduced or transmitted in any form by any means whatsoever, except with permission of the author/s..

Petroleumworld encourages persons to reproduce, reprint, or broadcast Petroleumworld articles provided that any such reproduction identify the original source, http://www.petroleumworld.com or else and it is done within the fair use as provided for in section 107 of the US Copyright Law. If you wish to use copyrighted material from this site for purposes of your own that go beyond
'fair use', you must obtain permission from the copyright owner.
Any use of this site or its material, in any form, without the express prior written consent of the author, is prohibited by law and is subject to legal action. Legal Information

Top 100+

Technorati Profile
Fair use notice of copyrighted material:

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from Petroleumworld or
the copyright owner of the material.