Economist.com Cities Guide: Sao Paulo Briefing - February 2006

News this month

Mr Serra's success

This may be a good year for José Serra. When he replaced Marta Suplicy as mayor of São Paulo last January, he inherited a 1.9 billion reais ($900m) deficit. But by cutting spending and renegotiating city contracts in 2005, Mr Serra was able to announce in January that the city’s accounts were in the black. This means Mr Serra now can add up to 800m reais to the 2.4 billion reais already earmarked for new investments in health, education and infrastructure projects.

Mr Serra’s policies have met criticism: members of the opposition Workers’ Party claimed the mayor's stinginess in 2005—when he spent just $700m reais on new investments—paralysed much-needed public works, including a new bus terminal and drainage facilities. But most view Mr Serra’s fiscal restraint as good governance. Proof of his steady leadership could not have come at a better time, as Mr Serra is competing with São Paulo’s governor, Geraldo Alckmin, for the Partido da Social Democracia Brasiliera (PSDB) nomination in this year’s presidential election. Bolstering Mr Serra’s image is a new book by Fernando Henrique Cardoso, an ex-president and kingmaker within the PSDB, which praises the mayor.

Fuel for the future

Petrobas, Brazil’s state-controlled energy giant, has chosen Santos, in São Paulo state, to be the headquarters of an $18 billion scheme to tap natural gas and oil sources in the Santos Basin. Petrobas officials said they selected Santos, South America’s biggest port, over Niterói in Rio de Janeiro because it was better placed for the task, with 52% of the Santos Basin lying off the São Paulo coastline. Miffed Rio residents carped that their loss was due to lobbying by São Paulo’s powerful trade groups.

The $18 billion investment, to be spent over the next decade, is part of an effort to reduce Brazil’s reliance on gas imports. Brazil imports about 30m cubic metres of natural gas each day from Bolivia, leaving it vulnerable to changes in that country’s export policies. Last year Bolivia began increasing royalties on gas exports, and its new president, Evo Morales, has suggested nationalising oil reserves. Such shifts will be less worrisome if Petrobas’s scheme works: the company expects to extract 12m cubic metres of gas each day by 2008, and 30m cubic metres each day by 2010.

Safety in numbers

New crime statistics have mixed news for São Paulo. By some measures, safety has improved: murders, rapes and robberies are down in the city and state. Some 7,276 people were killed in São Paulo state in 2005, 18.5% fewer than in 2004, and city killings dropped 24.3% to 2,578. But kidnappings are up, with a rise in both extended incidents, when victims are held for an average of seven days, and shorter episodes known as relâmpagos, when a victim is taken on an expensive tour of cash machines. In all, 2005 saw 133 kidnappings, 18.7% more than in 2004, though the average ransom dropped from 550,000 reias ($261,000) to 340,000 reais.

Geraldo Alckmin, São Paulo’s governor, hailed the statistics as a historic drop. The city’s murder rate last year, with 26 victims for every 100,000 people, makes São Paulo notably less dangerous than Washington, DC, where a resident was 35% more likely to be murdered. Still, the rise in relâmpagos means that a person is accosted every eight hours, according to Saulo Abreu, secretary for Segurança Publica, the state's public security office. Residents can take heart from the fact that few relâmpago victims are killed.

A long, bumpy road

On January 4th Luiz Inácio Lula da Silva, Brazil’s president, announced an emergency plan to smooth out 26,000km of the country’s pitted federal highways. The government is kickstarting the process by issuing repair contracts, allocating 440m reais ($194m) immediately, with 4.4m reais going to São Paulo. Total spending on road work in 2006 will reach 6 billion reais, about the same as last year, funded by a fuel tax.

Lula’s critics swiftly called these measures election-year pandering. Whatever the president’s motives, the country’s roads are in desperate need of repair. Brazil’s commerce relies heavily on its highways: trucks carry about 60% of freight, compared with 16% in the United States. But roads are in such bad condition that a soy-bean lorry can expect to lose over 3% of its load while travelling to ports, according to Sergio Mendes, director of the National Grain Exporters Association in São Paulo. Bumpy roads also damage vehicles and increase the risk of an accident. In late January 11 people died in a collision in Espirito Santo state, north of Rio de Janeiro, because a driver switched lanes to avoid potholes.

A towering problem

In the past decade, the most common additions to São Paulo’s skyline have been the spiky peaks of mobile-telephone towers. According to the mayor’s office, more than two-thirds of these towers—over 1,000—are illegal, either because of their location (in residential zones) or lack of authorisation. Phone operators now face fines of 6,000 reais ($3,000) each month if they don’t demolish their towers or fill out the proper paperwork.

These threats need not worry São Paulo's residents, as the state’s millions of mobile-phone users won’t loose service anytime soon. It took City Hall more than a year to identify the offending towers, and it will be another two years before operators are notified. In the meantime, city officials are selecting sites to build replacement towers.

Catch if you can

February 2006

Carnaval 2006

February 23rd-March 3rd 2006

The hedonism of the carnival season formally starts in Brazil on February 23rd in Salvador with its traditional street parades. São Paulo's Carnaval kicks off the next two nights, full of loud and lusty desfiles, or parades by the samba schools. Though perhaps not as famous or well funded as the Rio show, São Paulo's is certainly a feast for the senses.

This year 15 schools, each with about 3,500 people, will compete, marching down the main road of the Sambódromo, the custom-built Carnaval venue. Points are given for everything from songs and dancing to costumes and floats. Most of the favourites are parading on the first night. Both evenings start at 9.30pm and continue until dawn. The winners will do it all again on March 3rd.

Sambódromo, Avenida Olavo Fontoura 1209, Parque Anhembi. More information and tickets are available from the city's official Carnaval website (in English). Tickets: 90-280 reais ($43-133).

More from the Sao Paulo cultural calendar