CSARN / World Reports

BRAZIL / Government confirms five new dams in Amazon; sites likely to become new source of grievances for environmental, other activists

President Dilma Rousseff has announced plans for the construction of five new dams along the Tapajós River in the Amazon state of Pará. The sites are near to the cities of São Luiz do Tapajós, Jatobá, Jamanxim, Cachoeira do Caí and Cachoeira dos Patos. Controversially, the Government will reduce the area of three Amazonian national parks and four other conservation zones in Pará to allow for construction work.

Energy and Mining Minister Edison Lobão has stressed that new approaches and technology will minimise the environmental impact of the Tapajós dams. Most notably, these plans include flying in equipment and construction crews by helicopter to avoid building roads through the forest. Dam crews will also be housed in oil rig-like structures on the water once the projects are complete. Despite such mitigating measures and pledges to re-forest areas affected by construction, the environmental impact is still likely to be significant.

BRAZIL / Environmentalists killed in Amazon region; Government moves to increase security but further violence likely

A further three people were killed in this period following the deaths of environmental activists Jose Claudio Ribeiro da Silva and his wife (see our last report). Adelino Ramos died in the state of Roraima, while Eremilto Periera dos Santos and Marcos Gomes da Silva were killed in separate incidents in the Para state. Two were targeted because of their work to prevent illegal deforestation in the Amazon while Eremilto Periera dos Santos may have been killed because he witnessed the death of the da Silva.

BRAZIL / Rousseff wins Presidential election run-off by convincing margin; stock market gains reflect investor relief at likely policy continuity

As widely expected, Dilma Rousseff of the Workers’ Party (PT) won the second round of the Presidential elections on 31 October by a convincing margin, defeating José Serra of the Social Democratic Party (PSDB) by 56% to 44%. She will be sworn in on 1 January 2011, when the incumbent Luis Inácio Lula da Silva (also of the PT) leaves office after serving the maximum two consecutive four-year terms.

Rousseff was strongly backed by Lula and has undoubtedly benefited from the outgoing President’s high popularity ratings and the widespread perception of Rousseff as the continuity candidate. She is closer than Lula to the left wing of the PT, which could cause nervousness amongst some foreign investors. However, she will be constrained by the need to manage a governing coalition that could include more than ten parties.

The centrist Party of the Brazilian Democratic Movement (PMDB) will be particularly influential, having provided Rousseff’s Vice Presidential running mate Michel Temer. It is likely to be given several portfolios in the Cabinet, possibly including the chairmanship of a major State-controlled company such as Petrobras or Banco do Brasil. The Brazilian stock market reacted favourably to the result, with the Bovespa index gaining 1.3% on Monday. This suggests that relief over likely policy continuity currently outweighs any concerns over Rousseff’s leftist background. 

Balancing the competing demands of the PT and PMDB could provide an early challenge of Rousseff’s leadership skills. In a possible indicator that she intends to govern in a conciliatory style, it was agreed on 2 November that the Presidency of the lower house of Congress will for the first time be rotated on a two-year basis between the PT and PMDB. By historical convention the PT would have been expected to take control of this influential post after it overtook the PMDB as the largest party in legislative elections held on 3 October. However, this would potentially have weakened the PMDB’s de facto veto over key legislation, on which its support for the President is partly predicated.

It has yet to be decided which party will hold the post first, but with the PMDB currently holding it and elections not formally required until February next year there is ample time for negotiation. An early agreement in principle to share the role sends a strong signal that Rousseff is keen to work in harmony with the PMDB. This is likely to bolster the party’s influence over major policy decisions and will therefore provide further reassurance to investors.