Trump’s return casts uncertainty over G20 following advances in Rio

U.S. president-elect may hinder discussions and stall measures, reinforcing dissenting positions like Javier Milei’s

11/20/2024

Following Brazil’s advancements during its rotating presidency of the G20, the summit of leaders from the world’s largest economies faces a period of uncertainties starting in 2025, with Donald Trump assuming office in the United States. Mr. Trump, a critic of multilateralism, signals potential challenges for the group. That was evident in Rio de Janeiro, where Argentine President Javier Milei, an ally of Mr. Trump, made clear his disagreement with several points of the G20’s consensus final declaration.

These challenges are expected to arise at the next meeting in South Africa, during Mr. Trump’s first year in office.

“The feeling is that nothing will be the same. Trump’s return will have an unimaginable impact,” a Brazilian diplomat said. Another negotiator added, “It’s one thing for the United States, China, or Russia to come to the G20 ready to disrupt the declaration; it’s another for Argentina. They [Argentina] cannot handle the consequences alone. With U.S. support, the situation changes.”

Buoyed by a decisive electoral victory, with more global experience and no reelection on the horizon, Mr. Trump aims to shake up international relations. Not only will he be in the White House for the next G20 summit, but he will also chair the group in 2026. Some in Brazil’s Foreign Affairs Ministry fear that Rio may have witnessed the last “productive” gathering of the world’s major economies, despite Mr. Milei’s presence.

In Argentina, President Milei’s ultraliberal moves are seen as gestures to his electorate rather than genuine threats to disrupt Brazil’s G20 agenda. His repeated “do not count on us” statements led to diplomatic friction with most group members, especially with the main European economic powers, Germany and France.

Mr. Milei’s speech at the plenary of heads of state on Monday (18) was met with sparse applause and criticism, such as from Canadian Prime Minister Justin Trudeau. After making his point, Mr. Milei withdrew his veto threats and agreed to the summit’s final declaration, preserving the G20’s consensus legitimacy.

The outcome was positive for Brazilian diplomacy and was celebrated by key global leaders. Shortly after the text’s unexpected release on the first day of meetings, European Commission President Ursula von der Leyen congratulated President Lula for successfully addressing “one of the world’s most urgent issues.”

In his closing message at the summit, President Lula stated that the G20 can and must do more. “We have worked diligently, aware that we have only scratched the surface of the profound challenges facing the world,” the Brazilian leader said as he handed the group’s presidency to South African President Cyril Ramaphosa.

By releasing the final declaration on the summit’s first day, Brazil employed a strategy to shield the agreed text from last-minute amendment requests. Brazilian diplomats kept the dialogue at the sherpa level (country negotiators) to avoid “opening the Pandora’s box” among heads of state.

The reading is that renegotiating the text at the president and prime minister level would be even more challenging than the already complex discussions among negotiators. The sherpas spent the week in a hotel, working through the nights to reach consensuses that involved intricate details such as word and comma changes in the declaration paragraphs.

In Argentina’s case, the solution involved Mr. Milei’s verbal remarks, followed by a statement from the Casa Rosada outlining his points of disagreement, such as gender equality declarations, super-rich taxation, and climate change action goals. “Without obstructing the declaration of other leaders, President Javier Milei made it clear at the G20 that he does not support several points of the declaration, including promoting limitations on free speech on social media, schemes that impose and undermine the sovereignty of global governance institutions, and unequal treatment before the law,” the statement read.

Diplomats argue that a country aiming to block a document as significant as a G20 declaration should have at least one of two attributes: sufficient size or a highly important and undeniable cause. For various reasons, the United States, China, and Russia, for example, can undertake such an endeavor. For Argentina, that would be nearly impossible.

For this reason, diplomats anticipate a significant shift in the multilateral world. An outspoken opponent of multilateralism, Mr. Trump has announced plans to exit the Paris Agreement again and intends to maximize the “America First” agenda. Whether benefiting from this agenda or not, Mr. Milei promises to follow the same path and fulfill what he threatened to do in Rio. He even stayed out of the traditional photo with the group’s heads of state.

*By Murillo Camarotto, Paula Martini, Camila Zarur, Andrea Jubé, Lucianne Carneiro, Estevão Taiar — Rio de Janeiro

Source: Valor International

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In a career, there’s no one-size-fits-all approach, CEO says

Vibra CEO shares his management insights from leading diverse companies

11/18/2024

“In a career, there is no right or wrong. I believe it’s about understanding what motivates you, what makes you happy, what gets you up every morning [and making choices based on that].” That is the advice from Ernesto Pousada, CEO of Vibra and this week’s guest at CBN Professional podcast. In a conversation with Stela Campos, Career Editor at Valor, and Juliana Prado from the CBN radio station, Mr. Pousada revealed that he has always been driven by big challenges. This drive led him to leave the multinational chemical company Dow after 15 years for the Brazilian pulp and paper maker Suzano. “I looked inward and felt I wanted to experience a different company’s culture. I had a strong desire to work for a Brazilian company.”

With Dow, Mr. Pousada spent 11 years in Brazil, three in the United States, and two in Switzerland, which gave him “a very interesting background in understanding different cultures, environments, different countries.”

Mr. Pousada says the move to Suzano shaped him into the professional he is today. “I was stable with a promising international career at Dow, everything was set up for success, but my restlessness drove me to take a leap into the unknown,” he said.

In 2004, the offer came from David Feffer, a third-generation shareholder of Suzano. “I was captivated by the opportunity to grow, develop, and experience a new culture,” said Mr. Pousada, who stayed with Suzano for 11 years. During that time, the company expanded tenfold.

When joining Suzano, Mr. Pousada switched fields, moving from the commercial area to operations. “It was an area where I didn’t have much experience, so I changed sectors and fields, which brought me significant learning,” he noted. He believes the combination of these experiences prepared him for the future.

After that, Mr. Pousada took on the role of CEO for South America at Ingredion—in the food sector—and later as CEO of VLI Logística. The transition between these two organizations was partly driven by his desire to stay in Brazil. “At some point, I would have been ‘exported’ again for an international career at Ingredion, potentially even becoming the global CEO one day. But I didn’t want that; my family situation had changed, and my children were settled in Brazil. At that time, it didn’t make sense for me,” he said. “You strive for a balance between professional and personal life.”

At VLI, he reported directly to the board of directors, which was not the case at Ingredion. “I would have more freedom in my role,” he explained. He remained there until 2023, when he took on his current position at Vibra, a fuel distributing company—adding yet another new sector to his career. His advice? “Enter with the mindset of asking more questions than dictating how things should be,” he said. “Respect the technical knowledge of others, be humble in asking questions, and understand that you don’t know anything about that sector yet. How do I prepare? By studying extensively. Studying a lot, listening to those who understand the sector, and seeking diverse opinions.”

According to him, “you can’t take a ready-made recipe from one company to another.” “You might have a ‘modus operandi,’ which is, of course, you, but it’s not a one-size-fits-all approach. It’s about identifying the key elements and value drivers and acting on them quickly.”

Throughout the podcast, Mr. Pousada discussed his role at Vibra, the management model he has been implementing over the past 18 months, and the introduction of a people and technology department. “I see a strong connection between technology and people, especially from an organizational culture perspective, which is what we’re aiming for,” he said. “Because culture is the key pillar that underpins a company’s long-term strategy.”

The executive also talked about energy transition, decarbonization, and global warming.

*By Adriana Fonseca — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Reduced workweek could impact sectors, economist says

Labor-intensive sectors like industry, commerce, and construction may face layoffs or increased informality due to higher costs

11/18/2024

The proposal to eliminate the six-day workweek could significantly impact the production capacity of some economic sectors and lead to the closure of small and micro businesses, according to Bruno Imaizumi, an economist at LCA Consultores.

Unlike experiences in developed countries, implementing the six-day workweek in Brazil could harm sectors such as construction, industry, and retail, he notes.

“Some sectors can adopt more modern practices, like flexible hours or flexible work arrangements, such as hybrid or remote work. But in some traditional sectors, like the general industry, especially those involved in raw material processing and manufacturing, agriculture, and parts of commerce, there tends to be more difficulty,” he explains. “In the industry, even with investments in technology and capital, operations are still heavily dependent on labor. The same goes for commerce.”

Mr. Imaizumi warns that a new workweek structure could lead to increased costs for small and micro businesses, potentially making them unviable. For workers, the risk is increased informal employment, where contracts do not have set working hours, he states.

Valor: The proposal to end the six-day workweek is causing concern. What’s your view?

Bruno Imaizumi: The proposal gained considerable attention on social media but was confusing in its presentation. It essentially involves two points: the elimination of the six-day workweek, which is six days of work followed by one day off, and a reduction in the weekly working hours from 44 to 36. If you calculate four days times eight hours, you get 32 hours, not the 36 mentioned. So, the first point is to clarify that. Between eliminating the six-day workweek and reducing hours from 44 to 36 per week, the latter concerns me more.

Valor: What could be the economic losses?

Mr. Imaizumi: What economic scientific evidence do we have so far? When looking at developed countries and some specific companies, we see that when there was a reduction or elimination of certain schedules that left workers fatigued, productivity or growth in the involved companies increased. However, these experiments are primarily found in developed countries. We lack a counterfactual for developing countries. There are some small-scale experiments in Peru and the Philippines for specific sectors, but there’s significant sectoral divergence on this issue.

Valor: Does being a less developed country make it harder to implement a reduction in working days or hours per week?

Mr. Imaizumi: In less developed countries, like Brazil, there is a high rate of informality and a large informal market compared to developed countries. This poses a challenge to implementing workweek reduction policies, as just under 50% of the population works informally without comprehensive regulation. Also, the average qualification level of Brazilians is low, which affects productivity. Therefore, ending the six-day workweek might impact certain sectors.

Valor: Which sectors would be most affected?

Mr. Imaizumi: There’s a sectoral difference. High-skilled sectors like technology and consulting, which don’t involve tangible products, are more likely to adopt modern work practices, a current demand from workers. After the pandemic, work relationships have changed significantly. Record numbers of workers resigning voluntarily each month, for example, highlight worker dissatisfaction with quality of life. Looking at the sectoral issue, some can adopt modern practices like flexible hours or work arrangements, such as hybrid or remote work. But in some traditional sectors, like general industry, especially those involved in raw material processing and manufacturing, agriculture, and parts of commerce, there’s more difficulty. When we see studies citing Japan, Iceland, Sweden, New Zealand, and other emerging countries like Peru and the Philippines, they are experiments in companies more inclined to adopt modern work practices. In the industry, even with investments in technology and capital, operations are still heavily dependent on labor. The same applies to commerce. Therefore, I see that the change could make micro and small businesses unviable.

Valor: How so?

Mr. Imaizumi: It would make some small businesses unviable. Consider the implementation cost. In countries where labor is cheap and abundant, like ours, reducing hours without a reduction in pay could be seen as an additional cost for employers, especially in small and micro businesses, where these costs weigh more heavily. So, what would likely happen? If employers don’t hire informally, which is one possible effect of approving this constitutional amendment, they might not lay off workers but would find it difficult to continue operations.

Valor: What would be the impact in Brazil, considering that over 90% of new companies created in the last year are small and micro businesses?

Mr. Imaizumi: I believe that if experiments were conducted in some sectors, primarily those I mentioned, like technology, that don’t involve tangible products, a reduction might make sense. There are sectors more dependent on labor. Therefore, sectors like construction, commerce, and industry would be affected. But if we look at many service sectors, I believe many companies would benefit. So, there are indeed two sides to this issue.

Valor: Would this new scheme represent a significant change in Brazil? Although most formal employment contracts stipulate 41 to 44 weekly work hours, on average, people work less than this.

Mr. Imaizumi: When analyzing data from the Annual Social Information Report (Rais), we see that nearly 75% of formal employment contracts stipulate 41 to 44 hours, as currently provided by the Constitution. However, when looking at the actual hours worked by employees during the reference week of the Continuous National Household Sample Survey (Pnad), many work fewer hours. The average hours actually worked by a Brazilian employee is 39 hours. When considering only formal employees, that figure reaches 41 hours. So, many people are working less than stipulated. What concerns me is the drastic reduction from 44 to 36 weekly hours. If that happened, some formal workers working more hours would be affected. But overall, the average worker is already working within that range.

Valor: Does this proposal pose any risks for workers?

Mr. Imaizumi: Well, there are many inequalities. Besides the sectoral one, there’s the qualification inequality and the issue of informality. In the Brazilian labor market, there’s also the issue of informal employment. So, a possible effect of approving the constitutional amendment could be an increase in private sector workers without formal contracts, as independent contractors or sole proprietors. These types of work contracts don’t have a set work-hour limit. This is a concern.

*By Marsílea Gombata — São Paulo

Source: Valoar International

https://valorinternational.globo.com/
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U.S. and Norway announce new contributions to Amazon Fund

Fund has received over R$4.2bn in donations since its creation in 2008

11/18/2024

The United States and Norway announced two new contributions to the Amazon Fund on Sunday (17). The U.S. pledged $50 million, while Norway committed an additional $60 million. The U.S. announcement was made by President Joe Biden during his visit to Manaus, Amazonas. Mr. Biden said he is leaving a “strong legacy” for President-elect Donald Trump, who will take office on January 20, 2025.

The Amazon Fund has received over R$4.2 billion in internalized donations since its creation in 2008. Tereza Campello, socio-environmental director at the Brazilian Development Bank (BNDES), said R$882 million in projects have already been approved this year.

With the new pledge, U.S. contributions to the Amazon Fund will total $100 million. However, the donation announced by Mr. Biden is contingent on approval from the Republican-controlled U.S. Congress. “The fight against climate change has been the cause of my presidency. There’s no need to choose between the economy and the environment—we can do both,” he said.

“I’m leaving the presidency in January and will hand over a strong foundation to my successor, should they choose to continue this path. Some may deny or delay the clean energy revolution underway in the U.S., but no one can reverse it,” Mr. Biden added.

Norway, Brazil’s primary partner in the Amazon Fund, announced a new $60 million contribution to the initiative. Norwegian Prime Minister Jonas Gahr Støre made the announcement as recognition of Brazil’s 31% reduction in deforestation in 2023.

The announcement was made during the Global Citizen Now Conference, held at the Getulio Vargas Foundation (FGV) in Rio de Janeiro. Mr. Støre is in Brazil for the G20 Leaders’ Summit that starts this Monday (18).

Mr. Støre said the donation reaffirms the longstanding partnership between Norway and Brazil on climate and rainforest preservation. “Brazil’s success in reducing deforestation is a clear demonstration of the Lula administration’s ambition and determination. It shows how targeted measures can deliver significant results for the climate and nature,” he said in a statement released by the Norwegian embassy in Brasília.

Norwegian Climate and Environment Minister Tore O. Sandvik underscored the importance of the partnership: “Preserving the rainforest is one of the most important investments we make. Since Lula resumed the presidency in January, deforestation has dropped significantly, proving that Brazil is a global leader and driving force in protecting tropical forests.”

(With Folhapress)

*By Lucianne Carneiro, Paula Martini — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/
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Shipping soybeans to China more costly for Brazil

An ANEC survey shows that Brazilian freight costs for exporting oilseeds to China exceed those of Argentina and the U.S.

11/14/2024

Brazil faces significantly higher costs to ship soybeans to China compared to competitors like the United States and Argentina. According to data from the National Association of Grain Exporters (ANEC) from March this year, the freight cost for soybeans from Sorriso (Mato Grosso) to China reaches $124 per tonne when using trucks over the 2,000-kilometer stretch from Mato Grosso to the Port of Santos.

The cost of mixed truck and rail transportation drops to $111 per tonne, while using a combination of barge and truck costs $103 per tonne. In contrast, the March cost for shipping soybeans from Illinois to China was $75.50 per tonne.

Argentine exporters moving soybeans from Córdoba to the port of Rosario pay around $94 per tonne by truck, with rail transport reducing the cost further to $79 per tonne.

“In the U.S., production travels half the distance to reach ports compared to Brazil, and better road maintenance reduces vehicle costs. A greater reliance on railroads and waterways also significantly lowers freight expenses,” said Sérgio Mendes, ANEC’s executive director.

Thiago Péra, coordinator at EsalqLog, notes that just 16% of U.S. agricultural transport relied on trucks last year, while waterways accounted for 53% and railways 31%. In Brazil, however, road transport dominates at 54%, while railways account for 33% and waterways just 12%.

Mr. Mendes also highlights that Argentina focuses on crushing soybeans before exporting, with processing facilities located within a 250-kilometer radius of the ports, further reducing logistics costs.

Seasonal demand also impacts Brazilian freight costs due to limited storage capacity, which “causes a spike in road freight prices during peak harvests of soybeans and corn,” says Mr. Mendes.

According to ANEC, the U.S. has a storage capacity equal to 131% of its grain production, whereas Brazil’s capacity is estimated at only 60% of annual harvests.

Executives and researchers agree that improving Brazil’s competitiveness hinges on establishing legal frameworks that attract private investment alongside state-driven infrastructure programs. Streamlining bureaucratic hurdles for licensing railways and other routes is another widely recognized need.

*By Fernanda Pressinott, Globo Rural — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Man dies in explosion attempting to enter Brazil’s Supreme Court

The Institutional Security Cabinet of the Presidency ordered a security sweep and reinforced measures at the Planalto Palace

11/14/2024

A man died and a vehicle was set on fire following explosions at Brasília’s Three Powers Plaza early Wednesday evening. Authorities sealed off the area, and the Federal Police have launched an investigation.

Francisco Wanderley Luiz, originally from Rio do Sul (Santa Catarina), was identified by Planalto Palace officials as the vehicle owner. Celina Leão, acting governor of the Federal District, reported that preliminary findings suggest Mr. Luiz approached the Supreme Court after the car explosion and, unable to gain entry, may have taken his own life using another explosive. Another line of the investigation considers whether the detonation happened as he attempted to throw the device.

The Federal District government noted that it is too early to determine whether Mr. Luiz acted as a “lone wolf,” as investigations continue. In 2020, Mr. Luiz ran for city council under the Liberal Party (PL). Records indicate he was present at the Supreme Court’s plenary session on August 24.

At around 7:30 p.m., local time, during the explosions, some Supreme Court justices were still in the building. President Lula was not at the Planalto Palace, which is nearby, but at the Alvorada Palace, the official presidential residence, roughly four kilometers away. The Lower House session was suspended in response to the incident.

Following the event, Supreme Court’s Chief Justice Luís Roberto Barroso called President Lula. Several justices, including Alexandre de Moraes, Gilmar Mendes, and Cristiano Zanin, met with the president, along with the Federal Police Director-General Andrei Rodrigues.

Amid suspicions that additional explosive devices might be scattered in the area, the Institutional Security Cabinet of the Presidency ordered a sweep and strengthened security at Planalto Palace and the Supreme Court.

*By Fabio Murakawa, Mariana Assis, Isadora Peron, Raphael Di Cunto, Marcelo Ribeiro — Brasília

Source: Valor International

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ArcelorMittal invests R$2bn in steel factory expansion in Brazil

Steel galvanizing and annealing plant capacity increased to 2.2 million from 1.6 million tonnes

11/14/2024

With an investment of R$2 billion, ArcelorMittal inaugurated the expansion of its Vega facility in São Francisco do Sul, Santa Catarina, on Wednesday (12). The new unit will produce Magnelis, a corrosion-resistant material developed by the company, marking the first time this product will be manufactured outside of Europe. Magnelis is ideal for applications requiring high durability and low maintenance, such as solar panel structures and vineyard posts.

The new continuous galvanizing and annealing line has increased the plant’s annual production capacity from 1.6 million tonnes to 2.2 million tonnes. Jorge Adelino, vice president of operations for ArcelorMittal Flat Steel in Latin America, noted that this is the largest private sector investment in Santa Catarina.

ArcelorMittal produces 42% of Brazil’s flat and long steel, and its Brazilian operations account for 25% of the group’s EBITDA. Opened in 2003, the expanded facility will broaden its product range to support the automotive market, with new galvanized steel lines and high-strength steel coils.

Lakshmi Mittal, ArcelorMittal’s chairman and CEO, visited Brazil for the first time in eight years to inaugurate the unit. He highlighted that these investments were made despite challenges from high steel import volumes. “New investments in Brazil proceeded despite unfair competition from imported products that hinder opportunities for growth,” he said.

The group’s strategic plan allocates R$25 billion in Brazil from 2022 to 2028, covering expansion, modernization, acquisitions, and renewable energy initiatives. During a meeting with President Lula in Brasília on Tuesday, Mr. Mittal noted the federal government’s openness to dialogue. “The government understands and values our industry’s role in the country’s economic growth,” he added. President Lula shared photos of the meeting on social media, stating, “There is now confidence in foreign investment and industrial growth in Brazil.”

Eduardo Zanotti, ArcelorMittal’s vice president of flat steel sales, expressed concern over import volumes. “Despite the government’s tariff-quota measure, imports have not decreased. Predatory imports are troubling the industry,” he said. Mr. Zanotti also commented on the possible impact of policies under President-elect Donald Trump in the United States, expecting that stricter measures might redirect Chinese steel to other countries. “The Brazilian government understands the need to monitor imports. Many countries are ramping up protections for their local industries,” he added. While the primary focus of the expansion is on the domestic market, exports remain a possibility.

The reporter’s travel costs were covered by ArcelorMittal.

By Kariny Leal — São Francisco do Sul

Source: Valor International

https://valorinternational.globo.com/
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How AI will shape the future of companies and individuals

The second day of the Web Summit in Lisbon featured a debate on the role of artificial intelligence in society

11/13/2024

The opportunities, challenges, and especially the risks of artificial intelligence (AI) dominated discussions on the second day of the Web Summit in Lisbon, one of the world’s largest technology conferences. Beyond the giants responsible for the necessary infrastructure for applications, such as chip manufacturers, other businesses are now seeing AI as a means to enhance user interaction and rethink purchasing processes.

Brazilian Cristiano Amon, CEO of chip maker Qualcomm, believes AI will significantly impact how users interact with their mobile devices.

Qualcomm is banking on AI being closer to the user, operating on their devices, and less dependent on large data centers. “There’s a lot of investment going into data centers. What we are doing is changing that by bringing AI to where humans are. It costs differently when you run AI on your own device,” he said.

According to Mr. Amon, generative AI—using AI to create new content such as text and images—is the future of applications. “Generative AI will be the new user interface,” he stated. Mr. Amon used future banking applications as examples, where users will no longer have to follow steps to check their balance. They will simply ask AI, which will provide the information. “The apps we have today, their development will shift to an AI-first experience,” he added.

The changes brought about by AI are also on Alibaba’s radar, the retail giant that launched an AI tool to improve corporate procurement experiences. The platform is called Accio. Kuo Zhang, president of Alibaba.com, believes that AI tools can go beyond the well-known chatbots (software that responds to inquiries) and help redefine global commerce as we know it today.

“Today, it takes about 28 steps to find an item and complete a transaction. In this process, we have dozens of user experience barriers. AI is a technology to address these issues,” he explained. With Accio, a company can upload a spreadsheet with purchase items, and the AI will search for them.

Alibaba aims to ride the wave created by ChatGPT—the world’s most famous chatbot, developed by OpenAI—and boost sales. According to Alibaba’s data, initial surveys showed that the purchasing intent of companies using the new tool is 40% higher than traditional search engines. The platform uses data from over 50 million companies connected to the Asian giant.

Despite all efforts to understand AI’s role in the future, it remains unclear. “Most of the time when we try to predict the future, we are wrong,” said Thomas Wolf, co-founder and chief scientist of the collaborative platform Hugging Face.

Mr. Wolf mentioned that projections about AI often lead discussions into the realm of utopia. “We need to imagine how AI will integrate into society, and I think it will be much like the internet. It will be everywhere,” he noted.

There are signs that the world will see a significant leap in robotics by 2025, Mr. Wolf suggested. “The big question is what task humans will perform in the future,” he pondered, posing a challenge to Max Tegmark, president of the Future of Life Institute, a nonprofit focused on studying technology’s impact on society.

Mr. Tegmark gave an extensive response: “I think asking what humans can do better than machines is not the right question. Our brain is a biological computer. There’s nothing we can do now that machines couldn’t do better if we want them to. But we are the ones building this future. Why would we force ourselves to compete with machines? It doesn’t make sense. We call ourselves Homo Sapiens because of our intelligence. Maybe there’s something more valuable in us than that. I don’t think everything should be handed over to machines in the future.”

Hamilton Mann, vice president of the digital branch at Thales, a French defense company, said the doubts surrounding AI in society are natural. “This is new for us too. We are also learning, just as AI is evolving in society,” he said. Within Thales, Mr. Mann explained, technological development and the use of AI center on the human. “It’s about creating a system that will equip humans, who will be responsible for making decisions,” Mr. Mann concluded.

The reporter’s travel costs were covered by the Web Summit.

*By Cristian Favaro — Lisbon

Source: Valor International

https://valorinternational.globo.com/
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Inflation accelerates faster for low-income households, IPEA says

Institute links sharper inflationary impact on lowest income brackets to steeper increases in food prices, electricity

11/13/2024

October inflation rose for nearly all income levels in Brazil, with lower-income households seeing the highest increases, according to the Applied Economic Research Institute (IPEA). Only households with incomes above R$21,059.92 saw a slight deceleration. For very low-income households—earning less than R$2,105.99 per month—inflation climbed from 0.58% in September to 0.75% in October. Meanwhile, inflation rose from 0.55% to 0.71% for low-income households—those earning between R$2,105.99 and R$3,158.99.

The IPEA’s Income-Based Inflation Indicator, drawing on the Extended Consumer Price Index (IPCA) data from the Brazilian Institute of Geography and Statistics (IBGE), tracks inflation trends across income levels by total household income. The IPCA, Brazil’s benchmark inflation index, increased from 0.44% in September to 0.56% in October.

For households with middle-lower incomes (R$3,158.99 to R$5,264.98), inflation climbed from 0.48% in September to 0.61% in October. Middle-income households (R$5,264.98 to R$10,529.96) experienced an increase from 0.39% to 0.54%. Meanwhile, for middle-upper-income households (R$10,529.96 to R$21,059.92), inflation rose from 0.31% to 0.49%. Households earning over R$21,059.92, the only group to experience a slight deceleration, saw inflation ease to 0.27% in October from 0.33% in September.

The IPEA attributed the sharper inflationary impact on lower-income households to the steeper increases in food prices (up 1.06% according to the IPCA) and electricity costs (a 4.74% increase). Conversely, deflation in airline fares (-11.5%) and fuel (-0.17%) provided some relief for higher-income households.

“In October, although the food and beverage and housing categories were primary inflationary pressures across all income levels, the impact from these segments was proportionally stronger for lower-income households, given the larger share of their budgets allocated to these essentials,” said Maria Andreia Parente Lameiras, author of the study.

Higher inflation rates for low-income households have not been limited to October. Over the 12 months ending in October, the very low-income segment saw the highest inflation rate at 4.99%, while high-income households experienced the lowest rate at 4.44%. The average IPCA rate over the period was 4.76%, exceeding the Central Bank’s inflation target ceiling of 4.5%.

Year-to-date in 2024, low-income households have faced an inflation rate of 4.17%, compared to a lower rate of 3.2% for high-income households. By comparison, the IPCA rate over the same period stands at 3.88%.

*By Lucianne Carneiro — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/
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Congress leader says businesses must be heard about 6-day workweek

Government unlikely to push or expend political capital on approval

11/13/2024

Congressman Hugo Motta, the frontrunner to lead Brazil’s Lower House starting February, expressed concern on Tuesday regarding the constitutional amendment proposal (PEC) that seeks to end the six-day workweek followed by one day off (6×1). He emphasized the need to include business leaders in the discussions within the legislative house.

“I am very concerned, for instance, about this PEC recently introduced, the 6×1. A significant movement has emerged on social media supporting the PEC, which is a topic we need to discuss, but we must not listen to only one side,” Mr. Motta stated during a meeting with the Parliamentary Front for Entrepreneurship (FPE).

Mr. Motta stressed the importance of including employers in the debate to assess the proposal’s impacts. “We must also hear from those who employ; we need to consider both sides to avoid advancing an agenda potentially harmful to the country,” he said.

The initiative, led by Congresswoman Erika Hilton, has gained traction on social media recently. She is gathering signatures for her proposal on the subject.

The proposal aims to amend the Federal Constitution to reduce the workweek from 44 hours to 36 hours, with a maximum of four days a week and eight hours per day. Therefore, it is more comprehensive than just ending the 6×1 work schedule.

This move has sparked reactions from the entrepreneurial sector caucus, arguing that the constitutional change would increase costs, making services or goods more expensive.

Despite some support from the Lula administration, the government is not expected to make a strong effort or use political capital to push for the proposal’s approval.

Advisors to President Lula perceive that, given the current Congress composition, the proposal has almost no chance of progressing. However, the discussion is seen as beneficial for the government, as it could put the opposition in an uncomfortable position of blocking a bill ostensibly beneficial to workers.

Skepticism remains about the proposal’s advancement even within the Constitution and Justice Committee (CCJ), the first stage of the legislative process.

Vice President Geraldo Alckmin remarked that work schedule reduction “is a global trend.” He noted, however, that the topic has not been discussed within the government, leaving the debate to society and Parliament. “This hasn’t been discussed yet. But I think it’s a global trend. As technology advances, you can do more with fewer people, potentially reducing work hours. So, it’s a debate for society and Parliament.”

Mr. Motta cautioned against “extremism” in the debate. “I believe the Lower House cannot become a place where debates are hindered by personal or verbal attacks, which do not contribute to the discussion. It’s indeed the house where we can defend our viewpoints.”

Another PEC on the same topic, authored by Congressman Reginaldo Lopes, has been in the Lower House since 2019 without progress. Last year, the CCJ rejected its discussion and approved its removal from the agenda by 30 votes to 25.

Mr. Lopes’s proposal reduces the workweek to 36 hours without specifying the maximum number of days, while Ms. Hilton’s sets a four-day weekly limit.

In President Lula’s first year in office, the Workers’ Party took control of the committee, and the CCJ president, Congressman Rui Falcão, appointed Tarcísio Motta as the rapporteur. They attempted to schedule a favorable report in October 2023, but a motion by Congressman Gilson Marques removed the proposal from the agenda by a 30-25 vote.

Support for the PEC’s discussion was mainly limited to left-wing parties and the Social Democratic Party (PSD). Other parties, such as Liberal Party (PL), Progressive Party (PP), Brazil Union, and the Republicans, voted to remove the proposal from discussion, and the matter has not returned to the agenda.

Tarcísio Motta, who served as the rapporteur, left the CCJ, leaving the PEC without a rapporteur since. The committee is now led by Caroline de Toni, from the opposition.

Speaking to Valor, Mr. Lopes mentioned he would talk with the committee’s chair to request the appointment of a new rapporteur and suggested Congressman Alencar Santana Braga for the role.

Congressman Kim Kataguiri, who voted to remove the PEC from the agenda last year, released a video expressing support for ending the 6×1 workweek but opposing the PEC. “This is a circus, a farce, a setup; it’s using this for personal promotion, selling an illusion,” he criticized.

In a statement, Congresswoman Hilton said she learned of the 2019 PEC after starting to collect signatures for her proposal. She collaborated with Movimento Vida Além do Trabalho (Movement Life Beyond Work) to draft the text and strategy, aiming to provoke Parliament on the issue and drive “concrete advances for the working world.”

*By Raphael Di Cunto, Marcelo Ribeiro, Fabio Murakawa, Valor — Brasília

Source: Valor International

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