Skilled workers harder to come by in Brazil

. Feb 11, 2020
Workers mount tractors at tractors and machines factory, in Mogi das Cruzes. Photo: Alf Ribeiro/Shutterstock Workers mount tractors at tractors and machines factory, in Mogi das Cruzes. Photo: Alf Ribeiro/Shutterstock

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We’re covering the struggles of Brazilian industries to hire qualified workers. Donald Trump to remove Brazil’s status as a developing nation for trade purposes. The “normalcy” of extreme climate conditions. 

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Half of Brazilian industries complain of lack of qualified labor

Even if almost one-quarter of Brazil’s workforce is either unemployed or underemployed,

for many employers it has not been easy to find workers—that is, qualified workers. Half of Brazilian industries have trouble finding skilled workers for better-paying positions, according to a survey by the National Confederation of Industry (CNI).</p> <p><strong>Why it matters.</strong> The lack of skilled workers is a major hurdle for development. Many companies are simply not allowed to grow as they are unsure they will be able to meet demand by hiring new talent.</p> <p><strong>Size of the problem. </strong>A study published in November by human resources firm Korn Ferry states that there will be 1.8 million job positions left vacant or filled by underqualified people this year—a number set to reach 5.7 million in the space of a decade.</p> <p><strong>Half-full.</strong> The silver lining in the CNI survey is that the rate of companies complaining about the lack of skilled labor used to be higher—66 percent in 2013. And 91 percent of them have implemented actions to tackle the problem—from providing in-company courses to offering better career paths for workers with more training and qualifications.&nbsp;</p> <p><strong>Insular. </strong>However, only 1 percent recruit foreign professionals—a sign of just how insular the Brazilian economy can be.</p> <p><strong>Half-empty.</strong> Almost one-quarter of industries believe it is better to invest in automation than in training and recruiting skilled workers. In the long run, that is set to further increase the job market crisis.</p> <hr class="wp-block-separator"/> <h2>Extreme climate to become the new normal in Brazil</h2> <p>Two weeks after floods in the states of Minas Gerais and Espírito Santo killed 59 and displaced other 53,000, São Paulo was also chastised by intense rainfall. Brazil&#8217;s biggest city was plunged into chaos, with 164 flood points, 193 building collapses and over 200 trees ripped from the soil. Two of the city&#8217;s main axis of traffic were shut due to surface water, leading to many businesses and shopping malls simply not opening for business on Monday. The São Paulo retailers association estimated losses of BRL 110 million.</p> <p><strong>Why it matters.</strong> Extreme climate events are becoming more and more frequent. While monthly rainfall averages have remained more or less stable, precipitation is now more concentrated in shorter time spans. In the Southeast region alone, there have been 1,373 records of extreme rainfall since 2015.</p> <p><strong>Intense.</strong> Just between Sunday and Monday, rainfall was 83 percent of the average expected <em>for the entire month </em>of January. Still, the amplitude of the chaos caused shows just how little Brazilian cities are prepared for such conditions. &#8220;Only a few Brazilian towns have professionals such as geologists and geographers,&#8221; Omar Yazbek Bitar, a researcher from the Hydric Resources and Geoenvironmental Evaluation of the Institute of Technological Research, <a href="https://brazilian.report/society/2020/02/10/brazil-lack-urban-planning-still-blame-disasters/">told </a><strong><a href="https://brazilian.report/society/2020/02/10/brazil-lack-urban-planning-still-blame-disasters/">The Brazilian Report</a></strong><a href="https://brazilian.report/society/2020/02/10/brazil-lack-urban-planning-still-blame-disasters/">&#8216;s Natália Scalzaretto</a>.</p> <p><strong>Urban planning.</strong> Another major issue for Brazilian cities is how they were built. In São Paulo alone, there are between 300 and 500 rivers and streams running through pipes extending from 1,500 to 4,000 kilometers—which diminishes the soil&#8217;s capacity to absorb the water in case of extreme rainfall.</p> <hr class="wp-block-separator"/> <h2>For the U.S., Brazil is no longer a developing nation</h2> <p>The Donald Trump White House has removed Brazil and 18 others—including China, India, Argentina, and Colombia—from the country&#8217;s list of developing and least-developed nations. The move aims at lowering the threshold for starting a U.S. investigation into countries suspected of &#8220;harming U.S. industries with unfairly subsidized exports,&#8221; per a <a href="https://ustr.gov/sites/default/files/Designations_Notice_2020-02524.pdf">U.S. Trade Representative notice</a>.</p> <p><strong>Why it matters.</strong> Mr. Trump&#8217;s decision could be a sign of upcoming trade wars with the U.S., though Brazilian government officials have dismissed its consequences, saying it shouldn&#8217;t affect Brazil much in the short-term.</p> <p><strong>Spats.</strong> In December, President Donald Trump had announced on Twitter he would <a href="https://brazilian.report/newsletters/brazil-daily/2019/12/03/donald-trump-targeting-brazil-china-trade-war-argentina/">slap new tariffs on steel products</a> from Brazil and Argentina, claiming both countries had intentionally devaluated their currencies.</p> <p><strong>Criteria.</strong> The U.S. highlighted it did <em>not</em> consider social development indicators—such as infant mortality rates, illiteracy, or life expectancy at birth—to make the change.</p> <p><strong>WTO.</strong> Last year, President Jair Bolsonaro agreed to waive Brazil&#8217;s status as a developing nation at the World Trade Organization—which grants countries the right to extend some subsidies to local industries in order to reduce poverty, generate employment and integrate with global trade. In return, the White House would endorse Brazil to become a member of the OECD.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <p><strong>Oil &amp; gas.</strong> With production from pre-salt deepwater reserves at full steam, Petrobras announced it beat its production goals for 2019, reaching 2.7 million barrels of oil equivalent per day—5.4 percent better than in 2018. Experts credit the productivity jump to the company&#8217;s continuous spending on research and innovation. Pre-salt deepwater reserves account for 59 percent of Petrobras&#8217; oil and gas production.</p> <p><strong>Currency.</strong> The Brazilian Real once again lost ground against the U.S. Dollar, and the exchange rate closed on Monday at USD 1 : BRL 4.322—the highest nominal rate ever. The Brazilian currency&#8217;s poor performance is linked to uncertainties in the global scenario, as analysts struggle to grasp the full consequences of the coronavirus outbreak.</p> <p><strong>Banking. </strong>Itaú Unibanco, Brazil&#8217;s largest private bank, posted recurring net profits of BRL 7.2 billion over Q4 2019, slightly above what analysts predicted. That measure does not consider the BRL 1.9 billion in gains from the IPO of investment platform XP. All things considered, the bank&#8217;s profits jumped 20.6 percent from the previous year. For 2020, Itaú has maintained projections of strong growth—but has highlighted potential risks from its operations in other Latin American countries.</p> <p><strong>Isreal. </strong>President Jair Bolsonaro has reportedly chosen General Gerson Menandro Garcia as Brazil&#8217;s new ambassador to Israel. He was an advisor to Brazil Mission to the UN until last year. The new diplomat will be charged with the controversial move of the embassy from Tel Aviv to Jerusalem by 2021—a pledge made by Jair Bolsonaro last year and renewed in 2020.</p> <p><strong>Jet.</strong> São Paulo Governor João Doria has reportedly sold his USD 10-million Legacy 650 private jet. Last year, the National Development Bank (BNDES) published a list of people who had purchased jets financed by the bank—which included Mr. Doria. The governor was heavily criticized by President Jair Bolsonaro, who accused him of &#8220;living off of the state&#8221; during the Workers&#8217; Party era in power.

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