In Rio State, Saint George’s day is much more of a celebration than it is back in English-speaking countries. Here in the city of Rio, Tuesday was a day off work. So, in true Carioca fashion the Monday also becomes a day off; they call it the bridge day. Whether this is the case for all industries across the city, I don’t know, but here in Rocinha there truly was a holiday feel. Waking up to the sound of fireworks (yes, in broad daylight and I still don’t get why), seeing people out on their doorsteps and verandas drinking away, and seeing live music being played in the favela’s main street, Via Apia, it is fair to say that the community here made the most of their holiday and their two days off work.
On a more topical note, I’m now going to discuss a recent occurrence here in Brazil, how it came about, and finally why it raises issues that reminds Brazil of darker days. If you are getting confused, don’t worry… all will be revealed.
Like the United States, where I think we have a real taste for Italian food, Brazil, its restaurants and its households rely on a moderate price of staple foods such as potatoes, onions, and tomatoes in order to maintain a balanced diet. In the last few weeks here in Brazil, the price of tomatoes has become a subject of national debate. Although having a comical element to it, the underlying issue of rising prices, if not dealt with properly can and will have very serious effects for the economy, and although I don’t like using this word, its consumers.
In the last twelve months the price of tomatoes in Brazil has risen by 150%. According to sources I have read, this can be attributed to a number of factors all at play at the same time. Firstly, Brazil has experienced unusually heavy rainfall in recent months, limiting the agricultural sector’s ability to meet demand. Secondly, there has been a reduction in the area used for cultivati. Also to blame, is the supply side effect of rising global fuel prices and the demand side pull Brazil’s hungry appetite for tomato based meals.
For some restaurant owners across the country, this unprecedented price hike has forced tomato based dishes off menus, a development particularly worrying for the city of São Paulo and its large Italian population. Here in Rocinha, the issue is also evident when you pop into one of the many lojinhas (little shops) selling fruit and veg. Despite being an important and politically sensitive issue, given the sheer amount of tomatoes that are consumed in Brazil, the issue has not escaped the wrath of Internet memes and jokes.
Ok, so the real reason I am rambling on about tomatoes is because of a little problem that causes government ministers headaches all over the world. A little problem called inflation. Until the mid 1990’s, inflation and often hyperinflation plagued the Brazilian economy. Having unsustainably high prices that continue to rise makes basic human needs unaffordable for people in the economy and, even more so for those at the lower end of the income scale. According to the BBC, inflation in Brazil (measured in March 2013) stands at around 6.6%, a figure considerably higher than the Central Bank’s target of 4.5%. Although not setting off the alarm bells just yet, this gradual reoccurrence of what is such a sensitive issue, with such real negative memories for a lot of Brazilians, is definitely giving policy makers something to think about.
The dire need for investment into education and infrastructure in Brazil is clearly going to suffer at the hands of this short term need to curb the money supply. I once wrote a research paper on an issue that involved all of these topics. When I wrote the final section, which proposed future challenges and potential stumbling blocks to my argument, finding the right balance between investment, consumption, and monetary stability was my main point of discussion. To be living here witnessing these issues every day is definitely an interesting and educational experience. An experience that I hope will prepare me well for continuing my studies when I return to the United States.
Amidst that economic ramble, I forgot to mention living here is also very good fun!
Jennifer Kim 