Brazil trembles

Brazil has been hit by recession, devaluation and corruption. From an emerging BRIC country it is now going through a difficult phase.The latest “blow” in chronological order came from Standard & Poor's downgrading of Brazil’s credit rating to junk grade.What happened to Lula’s country of records that came out of the global crisis of 2008 practically unscathed? Why is the strongest member of the BRICs trembling? What are the causes?Substantially there are three: the first cause, which is also happening to China, is physiological, because strong economic growth is inevitably followed by a cyclical slowdown.The second is linked to the collapse of the price of commodities, of which the country is rich, together with the slowdown in China; the latter had, in fact, become the main commercial partner of Brazil with exports that had grown four times compared to those to other countries.The third cause is the scandal that hit the government. Started in March 2014, the federal investigation called “Operation Car Wash” brought to light a network of corruption and embezzlement regarding Petrobras – the state-controlled oil company – involving politicians and company executives, including current president Dilma Rousseff’s Workers’ Party. Rousseff was also at the head of the oil giant which, according to the investigation, illegally funded her party.Last week the opposition presented a new demand for Rousseff’s impeachment and for months antigovernment demonstrations have invaded the main cities. Obviously, this disastrous scandal has destabilized the entire country and, as a consequence, has contributed to accelerating the crisis.So there can be no doubt: Brazil is now deep into recession.Obviously, the fashion sector has also been affected by the crisis and just a few days ago Première Vision, the textile fair, announced the cancellation of the next edition in São Paulo, which should have taken place at this time. “The fair has been strongly hit by the economic crisis” - the organizers said – “and it has been obliged to suspend activities in the country until some time in the future”.According to the world’s analysts, the “medicine” for overcoming the crisis is simple and focuses on cutting costs associated or alternated with increases in taxes. Will the classic “blood, sweat and tears” formula work?(photo: "Salvador-CCBY-2" di joquerollo [2] - Flickr [1]. Con licenza CC BY 2.0 tramite Wikimedia Commons - https://commons.wikimedia.org/wiki)