Brazil's Northeast Region Loses "Chinese" Pace and Begins to Suffer with Economic Crisis

03/30/2015 - 08h53

The sharp increase in the disapproval of President Rousseff in the Northeast is occurring amid an important loss of dynamism in the region, which grew at "Chinese" speed in the past decade.

A Datafolha survey shows that the number of those who consider Rousseff's administration bad or very bad has risen from 11% to 55% from October to March in the Northeast. The period coincided with the skyrocketing inflation measured regionally and with the first fall in net formal jobs in the region after several years.

Although Rousseff still has better figures in the region than the national average, activity in the Northeast is approaching the rest of the country's slow pace.

The Northeast is also losing ground in intensive areas of labor such as construction. Some regional groups are already changing their expectations dramatically.

In 2014 the Northeast had 30% of the lays offs in construction, a sector that eliminated 106,000 jobs in the country. The 3.4% decline in the national average was smaller than the Northeast's 4.6% fall.

Cuts in financing and in the payment of infrastructure construction, as well as that of Minha Casa Minha Vida program are some of the main reasons for the increase in dismissals in the regions, says Ana Maria Castelo, a coordinator of construction projects at FGV/Ibre.

In the face of the new scenario, one of the main groups in the cleaning supplies sector in the North and Northeastern regions, Raymundo da Fonte - the owner of the popular brand Brilux - has made changes in its growth projections for 2015 - from 12% to 5%.

"The market is readjusting and consumption is falling. It will be great if we manage to keep the rhythm of production and avoid dismissals," says the group's commercial director, Romero Longman.

"People are stepping on the brake, buying less and searching for cheaper brands," says Teobaldo Costa, the president of the Supermarket Association of Bahia and the owner of Atakarejo group, the biggest in the segment in Bahia.

Datafolha says that the Northeast has the highest proportion of people who voted for Rousseff in October 2014 and now consider her administration bad or very bad: 24% say they are "frustrated," in comparison with the national average: 16%.

"The rejection comes from a feeling of frustration regarding the economy, a fear of losing their jobs and a belief that inflation is out of control. And on top of that there are the corruption scandals," says Mauro Paulino, general director of Datafolha.

Translated by THOMAS MUELLO

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	Raul Spinassé/Folhapress
	The Northeast has the highest proportion of people who voted for Rousseff and now consider her administration bad or very bad