Moving on the floor now babe you're a bird of paradise
Cherry ice cream smile I suppose it's very nice
With a step to your left and a flick to the right you catch that mirror way out west
You know you're something special and you look like you're the best
It appears Duran Duran was about 3 decades early, but Rio is making strides and with the 2016 Olympics ahead (not to mention a part of the 2014 World Cup) things are looking up. Some interesting granular information in this article from Bloomberg for those of you interested in the Brazilian story.
- Gartmore Investment Management Ltd.’s Christopher Palmer needed only a day in Rio de Janeiro to scout for investment opportunities while visiting Brazil six years ago. Now half a week in the city isn’t enough. A half a century after losing its status as Brazil’s capital, Rio is becoming an engine of Latin America’s largest economy.
- “It’s in the midst of a major transformation,” said Palmer, Gartmore’s head of global developing markets overseeing about $5 billion in London. “Rio has come back into the fold because of the Olympics and the development of the oil and gas industry.”
- The city lured at least two dozen hedge funds in the past decade as well as the nation’s leading oil producers, the 2014 World Cup and the 2016 summer Olympics. (technically the World Cup goes to a nation, not a city)
- Governor Sergio Cabral forecasts the state of Rio will need as much as $90 billion in investment through 2013 for the expansion of the shipbuilding, iron, steel and nuclear power industries, led by projects from billionaire Eike Batista. Oil producers and mining companies helped double state exports in the first five months of the year, a growth rate three times faster than the nation as a whole.
- Exports in the state more than doubled to $7.9 billion this year through May, compared with the same period a year ago, according to the Trade Ministry.
- On June 30, the government inaugurated a 65-meter (213 feet) elevator to connect residents of a cluster of hillside shantytowns, known as favelas, to the city’s newest subway stop as part of a campaign to improve security and transportation for the poor.
- “It’s becoming a virtuous cycle,” said Carlos Langoni, a former central bank president and finance chief of the organizing committee for the 2014 World Cup soccer games. “They’ve pacified favelas you would’ve thought were impossible to occupy. Real estate prices have surged, Rio’s seeing more royalties from oil production and it finally has good politicians.”
- Higher production has helped the unemployment rate in Rio state drop to 5.9% in April from 10.5% in the same month in 2002, according to the country’s statistics agency. The jobless rate was 7.7 percent in Sao Paulo state in April and 7.3 percent for Brazil, the data show.
- State-run oil producer Petroleo Brasileiro SA (PBR), Brazil’s biggest company, has hired 22,000 employees in the past six years, mostly in Rio, and plans to add 6,000 more by 2013 as part of a $224 billion investment plan, the biggest in the global oil industry.
- Economic strides may not be enough for Rio to supplant Sao Paulo as a corporate center, Langoni said. Four hundred kilometers (250 miles) to the southwest, Sao Paulo is the nation’s hub for the banking, automobile and agriculture industries. And its 902.8 billion reais in gross domestic product is three times bigger than the state of Rio’s.
- While Rio may not be luring banks, the city is becoming synonymous with the nation’s hedge fund industry. Ipanema, whose beach was named the “world’s sexiest” by the Travel Channel in 2008, and Leblon have lured more than a dozen hedge funds. Of the more than 70 independent asset management firms in Brazil, about 60% are based in Rio, half of which are less than 10 years old.
- Arminio Fraga, former central bank director and one-time fund manager for billionaire George Soros’s Soros Fund Management LLC, said he started his hedge fund in Leblon eight years ago because its economic universities provide a talented pool of traders and he can also work and live near the beach.
- Rio property values have risen as much as 47% percent in a year (wow). Homicides have fallen 31% in May from a year earlier to a record low of 363. Vehicle theft is down 30% and robberies of pedestrians fell 12%, according to data from Rio’s institute of public safety.
- Rio’s revival can be traced to the 2006 election of Governor Cabral, said Andre Urani, an economics professor at the city’s federal university. Urani said he isn’t affiliated with any political party. “The priority has been cleaning up the house,” said Cabral. “Rio is no longer the ugly duckling of the republic. We developed a new partnership politics in our state. I have no doubt that the changes made in our government will keep showing results in the medium and long term.”
- For decades before Cabral, Rio politicians shunned private enterprise and drug-related violence led entrepreneurs and educated Cariocas to flee to Sao Paulo, Urani said. “The city had lost its identity: It was no longer the capital, the industries left, the financial sector left and a lot of the state-owned companies left once they were privatized,” “The most important thing Cabral did above all was the inauguration of a new politics, molding together various parts of the government with the private sector.” (this is where Americans shudder)
I was actually shocked by these prices, considering the average wage in Brazil...
- In Ipanema, a two-bedroom apartment costs an average of 672,438 reais ($381,439), while in Copacabana it sells for 471,723 reais ($267,584), the data shows.
- “There are waiting lists and, basically, if you want to buy something there you’re going to pay a very high price or no one is going to sell it,” said Marcus Vinicius, director of Julio Bogoricin, a real-estate agency that focuses on luxury real estate in these neighborhoods.
- “Rio is becoming an interesting mixture of Boston with Houston.”
[Jun 9, 2010: Brazil GDP Grows at "China Like" 9% in First Quarter]
[May 21, 2010: The Economist - Brazil: Too Much Government Spending?]
[Oct 20, 2009: Ben Bernanke's Money Printing Parade Forces Brazil to Slap a Tax on Outside Investors]
[Oct 27, 2009: Goldman Sachs - "Hazardous" to Underweight Brazil]
[Sep 23, 2009: Brazil's Credit Rating Raised to Investment Grade]
[Aug 11, 2009: BW - Brazil's Coming Rebound]
[May 16, 2008: Brazil is Sexy]