Brazil: 2015, the year ahead

University of Dayton (Ohio)

President Dilma is not having an easy time of her new mandate. A very quiet inauguration in Brasilia and what is generally considered a lacklustre, generic speech to Congress. Education is, however, very clearly at the heart of her concerns and the new slogan for her government is "Brasil, ptria educadora" (Brazil, the Educator - more or less). She specifically confirmed that the
Science without Borders programme will continue but has stuck to the original number of 100,000 scholarships.
She is being generally criticised for the selection of the new ministers , which reflects, above all, the political bargaining process,
where her only hope of getting measures through Congress is to offer ministries to allied parties. The new economic team is not
considered of the first rank, the Minister of Agriculture is very much a supporter of 'agro-business', which does not go down well
with environmentalists, while the Minister of Sport has got a zero connection with sport, a worry in the run-up to the Olympics
though the President has insisted that the Olympics project team remains untouched. For the first time, the Minister of Education
is a non Labour Party (PT) member though apparently that may be remedied soon. Whilst Cid Gomes is ex-Governor of a state
in the north of Brazil (Ceara) and is the Presidents own choice, rather than a party nominee.
The economic outlook for 2015 continues to be interesting, with little sign of the government taking a firm grip on things, using the
old remedies of higher interest rates, higher taxes and significant public spending cuts rather than pushing for the key structural
changes that are needed. However in the background, the long-term civil servants and more involved politicians continue to get
some improvements through the sluggish system - tax simplifications rather than full-scale reform, changes to the legal process to
speed things up, and so on. On the business side, while the strong dollar improves export competitiveness, manufactured goods
continue to include a significant proportion of imported inputs, which is putting pressure on prices. Interestingly, the drop in oil
prices will not have a major shorter-term impact as the government had been keeping retail petrol prices down for some time
(causing major issues with Petrobras). Indeed, Petrobras will continue to haunt the government for some time to come. The company is embroiled in problems currently, with investor law suits in the USA (so much more frightening than local legal cases), and
P&W refusing to sign-off the 2013 accounts, which makes governance even more difficult. The knock-on effects on major suppliers such as construction companies continue, as their billing is contested layoffs are already happening.
So, all in all, 2015 is going to be an interesting year coupled with the very real chance of street protests starting again, by the middle of the year, if things continue as they are and if inflation starts to increase. A combination of the summer, pre-Carnival break
and 'lets see what Dilma does has brought her a breathing space - but not a long one.

A couple of highlights on the education side:

The new minister says his priorities are to pursue the

targets in the National Education Plan, improve literacy,
reinforce technical education, and restructure secondary
education, considered the weakest point in the education system - no surprises there. His first act will be to
raise teachers wages this will buy him time for a few
months whilst he settles in.

The consolidation of the private university sector continues apace. Kroton is now the biggest private education
company in the world, valued at over US$10 billion, and

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saw its share price rise by 64% in 2014 - making it the

2014 champion in the So Paulo Stock Exchange for all
sectors. Though 2015 did not start well for the company, as the government threatened to make access to
student loans (a key funding source for the company)
more difficult. Krotons longer term priorities are to develop the distance education sector (via a partnership
with Saraiva-the WH Smith of Brazil) and to build longer
-term links with its 1.5 million students by developing
employment services for graduates.

INDIA I CHINA I BRAZIL

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