Brazil: Venture Capital's Next Hotbed?

Brazil: Venture Capital's Next Hotbed?
Investments in Brazilian startups are surging, but high taxes and strict labor laws could hamper returns

(Source Business Week, Technology, Investment) Brazil is best known around the world for soccer, samba music, and supermodels. Now it's emerging as an attractive destination for investment capital.

At a June 25 conference in New York, a Brazilian venture capital trade group announced some impressive figures. As of the end of 2008, local and foreign investors had committed $28 billion in venture and private equity capital to Brazilian companies, said Luiz Figueiredo, president of the Brazilian Association for Private Equity & Venture Capital. That's up from $6 billion in 2004, amounting to a hearty 50% compound annual growth rate over the last four years. Investors have financed 500 Brazilian companies to date with venture or private equity capital, and there's $12 billion left to invest over the next few years from that $28 billion kitty.

Venture and private equity players see ample opportunity in Brazil, which boasts a stable financial system and a strong base of local investors. But the country's business challenges, including high taxes and restrictive labor laws, could hold back growth.

The conference on investment opportunities in Brazil was hosted by the Brazilian-American Chamber of Commerce and drew more than 150 investors, executives, and technologists. An initial public offering and a large investment underscored the event's theme.

On June 25, Brazilian stock exchange Bovespa hosted the world’s largest IPO this year, a $4.3 billion offering by Brazilian credit-card processor VisaNet. The same day, Boston private equity firm Advent International announced that it has bought a 50% stake in Brazilian holding company PAP for $142 million. PAP controls Kroton Educational, a fast-growing education company. It was Advent’s fifteenth investment in Brazil since 1997. Read Article... http://www.businessweek.com/technology/content/jun2009/tc20090628_830521.htm?chan=technology_technology+index+page_top+stories

World's 65 and older population to triple by 2050

World's 65 and older population to triple by 2050
USCensus: World's older population will triple by 2050, adding stress to government programs

WASHINGTON (AP) -- The world's 65-and-older population will triple by mid-century to 1 in 6 people, leaving the U.S. and other nations struggling to support the elderly.

The number of senior citizens has already jumped 23 percent since 2000 to 516 million, according to U.S. census estimates released on Tuesday. That is more than double the growth rate for the general population.

The world's population has been graying for many years due to declining births and medical advances that have extended life spans. As the fastest-growing age group, seniors now comprise just under 8 percent of the world's 6.8 billion people. But demographers warn the biggest shift is yet to come. They cite a coming wave of retirements from baby boomers and China's Red Guard generation that will shrink pensions and add to rising health care costs.

Germany, Italy, Japan and Monaco have the most senior citizens, with 20 percent or more of their people 65 and older.

In the U.S., residents who are 65 and older currently make up 13 percent of the population, but that will double to 88.5 million by mid-century. In two years, the oldest of the baby boomers will start turning 65. The baby boomer bulge will continue padding the senior population year after year, growing to 1 in 5 U.S. residents by 2030.

"The 2020s for most of the developed world will be an era of fiscal crisis, with a real long-term stagnation in economic growth and ugly political battles over old-age benefits cuts," said Richard Jackson, director of the Global Aging Initiative at the Washington-based Center for Strategic and International Studies.

"In emerging countries like China, they will face the real prospect of a humanitarian aging crisis," he said.

China's current ratio of 16 elderly people per 100 workers is set to double by 2025, then double again to 61 by 2050, due partly to family planning policies that limit most families to a single child, Jackson said. Without a universal pension system to cover all elderly, millions of older Chinese could fall into poverty, creating social and political unrest and shock waves that could ripple through the global economy given the country's economic heft.

The Census Bureau's international estimates also show:

--Only 5 percent of Africa's population is projected to be 65 and older in 2050. Sub-Saharan Africa, with high fertility and AIDS cases roiling parts of the region, is home to the youngest people. Leading the way is Uganda where the median age is just 15.

--About 1.53 billion, or 16 percent, of the world's estimated 9.3 billion people in 2050 will be 65 and older.

--Europe will continue to be the grayest region, with 29 percent of its population projected to be 65 and older by 2050. It aging population has prompted governments, including Austria, France and Russia, in recent years to provide incentives such as bonus payouts, tax benefits and free school books to couples who have children.

--In Latin America, known for its high fertility, youths ages 19 and younger outpace the 65-and-older group by more than 5 to 1. But by 2050, led by a dropoff in births in countries such as Brazil and Mexico, senior citizens will jump to 18 percent of the population compared to 25 percent for youths. Faced with its aging population, Cuba recently raised its retirement age by 5 years, delaying payment of pensions.

Ageing in the rich world
The end of retirement

Jun 25th 2009
From The Economist print edition
Demography means virtually all of us will have to work longer. That need not be a bad thing.

WHEN Otto von Bismarck introduced the first pension for workers over 70 in 1889, the life expectancy of a Prussian was 45. In 1908, when Lloyd George bullied through a payment of five shillings a week for poor men who had reached 70, Britons, especially poor ones, were lucky to survive much past 50. By 1935, when America set up its Social Security system, the official pension age was 65—three years beyond the lifespan of the typical American. State-sponsored retirement was designed to be a brief sunset to life, for a few hardy souls.

Now retirement is for everyone, and often as long as whole lives once were. In some European countries the average retirement lasts more than a quarter of a century. In America the official pension age is 66, but the average American retires at 64 and can then expect to live for another 16 years. Average spending on public pensions across the OECD is now the equivalent of more than 7% of GDP (they cost America just 0.2% back in 1935). In some countries the current figure could double by 2050, to say nothing of the cost of private pensions and extra spending on health and long-term care.
Grey and proud of it

Although the idea that “we are all getting older” is a truism, few governments, employers or individuals have yet come to terms with where longer retirement is heading: the end of the whole concept (see special report). Whether we like it or not, we are going back to the pre-Bismarckian world, where work had no formal stopping point. That reversion will not happen overnight, but preparations should start now—to ensure that when the inevitable happens it is a change for the better.

It should be for the better because it is being partly driven by a wonderful thing: people are living ever longer. Life expectancy has been rising by two or three years for every ten that pass, despite repeated forecasts that it was about to reach its limit. Centenarians used to be rarer than hens’ teeth; now America alone has 100,000 of them. By the end of this century the age of 100 may have become the new three score and ten.

This imminent greying of society is compounded by two other demographic shifts. First, in most rich countries women no longer have enough babies to keep up the numbers (a prospect that may please a lot of greens but not many governments); and the huge baby-boom generation, born after the second world war, has begun to retire. In 1950 the OECD countries had seven people aged 20-64 for every one of 65 and over. Now it is four to one—and on course to be two to one by 2050. That will ruin the pay-as-you-go state pension schemes that provide the bulk of retirement income in rich countries. Read on...
http://www.economist.com/opinion/displayStory.cfm?story_id=13900145&source=hptextfeature

Debris, Oil Slick from Air France Flight Found off Brazilian Coast

Debris, Oil Slick from Air France Flight Found off Brazilian Coast

(Source The Chosun Ilbo English, Korean Daily News) Brazilian search planes are recovering what officials say is the wreckage of Air France Flight 447 which disappeared Monday off Brazil's northern coast. The debris will be examined for serial numbers and other markings to confirm that it is the missing plane. The Airbus A330 vanished about four hours after leaving Rio de Janeiro, bound for Paris.

Search planes found a 20 kilometer long oil slick, apparently left by the Air France jet.
Flight 447 left Rio de Janeiro bound for Paris on Monday. It carried 228 people. Debris found in the ocean could offer clues on why the four year old airplane went down.
"The nature of the debris, the density, the position, make no doubt that we have the first material evidence that are linked to Air France 447," said Commander Christophe Prazuck, a spokesman for France's military.

A meteorologist with AccuWeather tells VOA that Flight 447 may have encountered 160-kilometer-per-hour winds as it flew into strong storms along the equator.
The area is called the Inter-Tropical Convergence Zone. It's where the trade winds between the Northern and Southern hemisphere meet.
U.S. pilots who fly this route say the zone's fierce thunderstorms carry moisture lower and therefore often do not appear on radar. Paul Zurkowski, a commercial pilot who flies to South America, says darkened cockpits help. "We'll turn off the interior lights and turn on the exterior lights to see more of what's outside, more of the clouds," he said.

Some experts point to severe turbulence or lightning strikes as to the cause. But planes are built to withstand strikes, so pilots say it's doubtful that lightning would be catastrophic.
Zurkowski says a few years back his plane started shaking and he realized it had been struck, just below his seat. "We didn't see any damage to the airplane airborne, it didn't affect our radios or navigation equipment," he said. "But it did put small holes in the airplane which were found by maintenance when we landed."
Shortly before it vanished, Flight 447 transmitted automatic messages reporting failures in its pressurization and electrical systems. Read Article...
http://english.chosun.com/site/data/html_dir/2009/06/05/2009060500776.html


Air France crash mystery deepens

(Source France 24) The mystery surrounding the crash of an Air France plane off the coast of Brazil deepened after Brazilian officials said items they had pulled from the sea were not in fact debris from the downed Airbus.

The search by ships for wreckage from Air France flight AF 477, which came down early Monday as it was flying from Rio de Janeiro to Paris with 228 people on board, continued in a zone where confirmed items from the plane had been spotted earlier in the week.
"Up to now, no material from the plane has been recovered," Brigadier Ramon Cardoso, director of Brazilian air traffic control, told reporters in the northeastern city of Recife late Thursday.

That contradicted a statement Cardoso made earlier Thursday when he said a pallet and two buoys plucked from the Atlantic by navy crews were the first pieces of the Air France crash.
In fact, Cardoso admitted later, they were nothing more than sea "trash," probably from a ship, as was a big oil patch originally described as a fuel slick from the French jet.

Several Brazilian navy vessels are looking for debris from the plane, including a seat and a big chunk of what appeared to be fuselage, sighted by air force aircraft on Tuesday and Wednesday.
Defense Minister Nelson Jobim has said there was "no doubt" that the debris spotted from the air came from flight AF 477, and that they marked the area close to where the plane hit the ocean.
The French government, which is in charge of the probe into the crash, has sent investigators to Brazil to inspect any debris that could be recovered from the zone, around 1,000 kilometers (600 miles) off-shore, and take them back to France.
Speculation over what caused the accident has ranged from a massive, lightning-packed storm in the area at the time, to turbulence, to pilot error or a combination of factors.
No mayday call was received from the plane, just a series of data transmissions signaling it had lost power and then had either broken up or gone into a fatal dive. Read Article...
http://www.france24.com/en/20090605-air-france-crash-mystery-deepens