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Friday, June 21, 2013 1:13 AM

800,000 Protest in Brazil Over a 10-Cent Hike in Fares and the High Cost of Staging the World Cup; Police Join Protestors; Inflation, Corruption, as Boom Comes to an End

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It's always impossible to know what the trigger for a mass reaction will be in advance. In Brazil, hundreds of thousands of people have been in protest over corruption, bad services, and even the cost of hosting the World Cup.

The trigger was a mere 10-20 cent hike in transportation fares. Cities have rolled back the price hikes but the protests continue.

Hundreds of Thousands Join Brazil Protests

Al Jazeera reports Hundreds of Thousands Join Brazil Protests

Hundreds of thousands of people have rallied across Brazil as part of a protest movement over the quality of public services and the high cost of staging the World Cup.

About 800,000 people marched on Thursday in rallies across the country of 194 million people, according to an AFP news agency tally - an intensification of the movement which started two weeks ago by public anger about an increase in public transport fares.

Police fired tear gas in Rio de Janeiro, scene of the biggest protest where 300,000 people demonstrated near City Hall, to disperse a small group of stone-throwing protesters.

In the capital Brasilia, security forces blocked protesters trying to break into the foreign ministry and throwing burning objects.

The military police finally threw a security cordon around the building.

In Sao Paulo, an estimated 110,000 people flooded the main avenida Paulista to celebrate the fare rollback and keep the pressure on Rousseff's leftist government to increase social spending.

The protests have escalated into a wider call for an end to government corruption in the world's seventh largest economy, a call prompted by resentment over the $15bn cost of hosting the Confederations Cup and the World Cup
Leaderless Movement

Interestingly, the protests were not organized by any person or leader the government can deal with or arrest.

Please consider Brazil protests continue despite concession
Brazilian authorities are bracing for a new wave of protests as hundreds of thousands of people across 80 cities have responded to social media posts, calling for them to rally in the streets.

In an attempt to cool anti-government sentiment, authorities in Sao Paulo and Rio on Wednesday cancelled the proposed transit fare hikes, but the crowds have continued to gather, despite the government climb-down.

Al Jazeera's Adam Raney, reporting from Rio de Janeiro, said the government was yet to establish how to calm the tensions.

"It is overall a leaderless movement, what we're seeing is the government, not just trying to spin the story, but also trying to understand what it is the protesters want, what [they] can deliver," he said.

The protest fed on widespread resentment at the billions of dollars the government is spending on the Confederations Cup, the World Cup and the 2016 Summer Olympics, with demonstrators saying they want increased education and health funding and a cut in wages for public officials.

In announcing the reversal of the fare hike, Sao Paulo Mayor Fernando Haddad said it "will represent a big sacrifice and we will have to reduce investments in other areas".

Military Police Officers Join Protesters In Brazil

The Huffington Post comments on the above video that has gone viral.

RT Images

Here are a couple of Brazil Protest Images courtesy of RT.

Decade-Long Boom Comes to an End

Reuters reports Brazil hit by largest protests yet as hundreds of thousands march
With an international soccer tournament as a backdrop, demonstrators are also denouncing the more than $26 billion of public money that will be spent on the 2014 World Cup and 2016 Olympics, two events meant to showcase a modern, developed Brazil.

The unrest comes six months before an election year and at a time when Brazil, after nearly a decade-long economic boom in which the country's profile soared on the global stage, enters a period of uncertainty. Economic growth of less than 1 percent last year, annual inflation of 6.5 percent and a loss of appetite for Brazilian assets among international investors have clouded what had been a feel-good era for Brazil.

Brazil's currency, the real, dropped to a four-year low on Thursday, trading as weak as 2.275 per U.S. dollar. The country's benchmark stock market index, the Bovespa, also hit a four-year low.
Inflation, Corruption, as Boom Comes to an End

What's the protest really about? Inflation and corruption is the answer. Fare hikes are a symptom.

Brazil complained for years about the strength of its currency, the Brazilian Real. Now it intervenes regularly to prop it up (For detail, please see my June 18 post Brazilian Currency Touches Four-Year Low Prompting Intervention; Currency Intervention Madness Displayed in Chart Form)

Inflation is a reported 6.5%, but no doubt much higher in practice.

Problems are easy to overlook in a seemingly good economy when jobs are plentiful. It's much different when the boom ends and the corruption becomes obvious.

Mike "Mish" Shedlock

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