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As post-election euphoria settles, Dilma Rousseff announced that Guido Mantega will head of the finance ministry and Alexandre Tombini will be the president of the Central Bank (current deputy governor of financial regulation) who will replace Henrique Meirelles (from January 2010 onwards).  Despite many believing he would stay, Meirelles stated that he was leaving the position “with a sense of a mission accomplished – Tombini was the best prepared to take my place.”

Investor confidence continues to remain high with Moody’s credit referencing agency pushing up the ratings for Rio de Janeiro and Belo Horizonte cities as well as the states of São Paulo and Minas Gerais with vice president Debra Roane stating: “the continuous supervision and control of finances – in terms of improving financial ratios and debt – as well as the administrative practices in these regions are to be commended.”

The Wall Street Journal published a report stating that the main challenge of the international petroleum industry today is the actual search for oil and Brazil is leading the pack with six of the seven major discoveries in the last 10 years: Tupi (between 5 and 8 billion barrels), Júpiter (8 billion barrels), Franco (4.5 billion barrels), Iara (between 3 and 4 billion barrels), Jubarte (1.7 billion barrels) and Mexilhão (200 million barrels).

Despite the overall positive news, the country’s main headlines have been focused on the reappearance of violence between gangs and the police in Rio de Janeiro – however, some have debated that tougher law enforcement and more pro-active policy making may well be decreasing the problems (viewed as particularly important as the World Cup 2014 and Olympic Games of 2016 draw closer).  Companies such as Coca-Cola and Banco Bradesco have been seen donating millions of dollars in 2010 to help fund police operations with the World Bank estimating that problem is costing the country almost $100 billion a year in security costs, lost investment and productivity.

In property related news, constructors were pleased to hear that the government will extend tax cuts for building materials for an additional year after they expire on December 31st with Guido Mantega stating: “the construction industry has been one of the chief engines of Brazilian economic growth this year.”

Download: November / December 2010 Brazil Real Estate and Land Investor Newsletter