One of our readers wrote a comment recently that the expression “infrastructure of cambodia, prices of St. Tropez” was how his wealthy Russian friend described Brazil after a recent visit to Bahia. Although the comparison sounds somewhat exaggerated, we thought the expression was descriptive enough to become the title of a post to show how the “cambodian-style” infrastructure in Brazil is a drag in the economy. Hence, let us describe this issue by providing a simple example of a bottleneck on development: the railroad system.

A survey by the Brazilian National Confederation of Transport shows that the “turtle-speed” freight rail lines has been getting worse. Eight of the 13 railroad lines surveyed lost performance in 2010 when compared to 2009 (see below). The trains that carry products such as soy, corn and steel travel on average 25 km/h. When one thinks it can’t get worse… in Brazil, it does.

 
In Australia, for instance, the freight railroads are a priority for the central planners – the average travel speed is 61km/h… 2.5 times the speed of Brazil’s. According o Exame magazine, the Australian government estimates a gain of 10% to 15% in productivity by using railroads for transport instead of highways.

Now switching from railroads to the Brazilian highway system…
The road infrastructure in Brazil is simply awful, and the Brazilian productive sector gets severely punished since the cost of shipping has become one of the most expensive in the world… which makes the country less competitive in exports. In addition, each year about 37,000 people die in accidents in Brazil’s precarious highways. A large chunk of the investment resources allocated for the Brazilian roads ends up in the pockets of corrupt politicians. In the last year alone, by the government’s own accounts, at least R$700 million werediverted” from the Transport Ministry
If the government on its own computes R$700 million in corruption from the transport investment budget, should we triple that number to get a more realistic scenario of what goes on?


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9 Responses to Only in Brazil: Infrastructure of Cambodia, prices of St. Tropez

  1. Anonymous says:

    It is not exagerated. I would say: African services and infrastructure with St, Tropez prices.

  2. Gene Whitmer says:

    I think your 7,000 died on the highways figure is an error. It is more like 37,000+

    http://en.wikipedia.org/wiki/List_of_countries_by_traffic-related_death_rate

  3. Gene, great catch, thanks. We have corrected the typo…
    Regards,
    BB

  4. Cass Young says:

    As the author of the original Cambodia/St Tropez post, can I suggest two other models? In the 70s natural gas was discovered off the coast of Holland. Credit loosened, house prices boomed, then an international recession hit in 1979 and property halved in price. In the 80s oil was discovered off the coast of Finland. Same story.

    Remind you of anywhere ?

    Would be interesting to compare the figures.

  5. Anonymous says:

    Prezado Sr. Bubble.
    Escrevo em Portugues pq não me sinto confortavel em Inglês e quero te contar uma história verdadeira e extremamente pertinente e pesso que repasse, sem os devidos exageros, pois é uma história real mas os detlahes eu ouvi dizer, os coletei e relato aqui..

    Certo dia em 2008 correu a notícia que um grande cruzeiro transatlantico iria aportar em Ubatuba – SP pela primeira vez na história com hordas de turistas ricaços. Imagine a cena: os restaurantes da cidade inteira dobraram os seus preços, taxistas, bares, a cidade inteira precificou a visita de 5 mil endinheirados, do dia pra noite a simples Ubatuba mais cara que New York. A prefeitrua contratou shows, uma fanfarra, tapete vermelho e já pensava em entregar a chave da cidade pro capitão.
    No tão aguardado dia, todos apostos, vereadores, taxistas, guias turísticos, pedintes, vendedores, , a bandinha da prefeitura, o padre, a apresentação de bate-lata da escola, a capoeira, um bando de curiosos, aspones e o próprio prefeito em pessoa. Bem, eis que no tão aguardado dia não desceu nem meia duzia, nem nunca mais parou lá outro cruzeiro.

    Não será assim na Copa?

  6. Anonymous says:

    provavelmente sera assim na copa. so quem tem pacotes comprados e e fanatico vai comparecer. serao transportados, hospedados e servidos como parte do pacote. os demais vendedores ficarao a ver navios.

  7. Anonymous says:

    THE SPEED OF CORRUPTION IS INCREASING THOUGH…

  8. [...] Only in Brazil: Infrastructure of Cambodia, prices of St. Tropez [...]

  9. Marcelo hartuing says:

    The corruption is intrinsic to any society of humans, not an exclusive benefit to brazilians. Of course it has different levels among the countries, and Brazil, as a recently developing country, has many things to do in this subject. 50 or 60 years ago, they were one of the poorest places on earth, lacking almost everything, from industries to the self-steem of the population. Brazil is improving in good steps, although it could be somewhat faster, but it is in the right direction. Such short time from being an outsider of the development is not worth to build a pristine infrastructure and to deal with the other historic problems there are present in the last five hundred years of existance.

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