FT rides the wave of Eike's failure to attack Brazil.
A British newspaper paints a lengthy and pessimistic picture of Brazil by comparing it to businessman Eike Batista; "Some may look at Eike Batista's exotic story and conclude: so what? But his story is, in many respects, a parallel to Brazil's rise and fall. Furthermore, as Brazil is an archetype of an emerging market, it also tells a global fable. Just last year, Eike Batista was the seventh richest man in the world, boasting a fortune that had grown to over US$30 billion during the 'incredible years' of Lula's government. In reality, the two men were different sides of the same coin," it says.
247 - In a lengthy article by John Paul Rathbone, the Financial Times compares the rise and fall of businessman Eike Batista, "who filed for bankruptcy after defaulting on $6 billion," to Brazil itself, which "seems to have lost its way, just as many emerging markets are also losing their appeal in the face of the shale gas revolution - which promises to transform the US and the eurozone."
"After the biggest corporate collapse in Latin America, some might look at Eike Batista's exotic story and conclude: so what? But his story is, in many respects, a parallel to Brazil's rise and fall. Furthermore, as Brazil is an archetype of an emerging market, it also tells a global fable. Just last year, Eike Batista was the seventh richest man in the world, boasting a fortune that had grown to over US$30 billion during the "incredible years" of Luiz Inácio Lula da Silva's government. Lula, as the charismatic former president is widely known, governed between 2002 and 2010, when it seemed that nothing was going wrong for either Brazil or the businessman. In reality, the two men were different sides of the same coin," he states.
According to the British newspaper, "certainly, Brazil's dynamic years in the mid-2000s are over." "In 2012, the economy expanded at half the rate of Japan. The fiscal reserves that allowed Brazil to treat the 2009 global financial crisis as if it were just a 'little wave,' in Lula's words, are exhausted. The role of continental locomotive has been resumed, much to Brasília's chagrin, by the more reformist economies of the Pacific Alliance – Chile, Colombia, Mexico, and Peru," it argues.
And it continues: "Investment potential is also being left behind, as seen in Petrobras, the state-owned oil company that raised US$70 billion in 2010 in the world's largest initial public offering, but which has since seen a 37% drop in the value of its shares. Brazil today is a place that scares investors in general, as happened after the market movement in May, when millions of dollars left the country believing that the US Federal Reserve was about to raise interest rates."
The newspaper also cites the protests that took place in the country in June and says that "after 11 years in power, and the likelihood of another four after next year's election, Lula's Workers' Party has also become stagnant and complacent." "The reforms are being sidelined," it points out.
And he hopes for the end of the Workers' Party governments: "This is a depressing trajectory. However, is it all bad? Disappointment can, at least, free Brazil from the prison of its many clichés (samba, beaches, money, fun!), which Lula and Batista often exploited and which the world bought into so eagerly."