Brazil Protests Persist After Cities Revoke Fare Increase

Photographer: Miguel Schincariol/AFP/Getty Images

Students gather at the City Hall in Sao Paulo, Brazil, on June 18, 2013. Close

Students gather at the City Hall in Sao Paulo, Brazil, on June 18, 2013.

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Photographer: Miguel Schincariol/AFP/Getty Images

Students gather at the City Hall in Sao Paulo, Brazil, on June 18, 2013.

A series of paralyzing street protests showed little sign of abating after officials in Brazil’s two largest cities bowed to popular demand and revoked an increase in bus fares.

Authorities in Sao Paulo and Rio de Janeiro yesterday said they were scrapping the increases even as they struggle with strained budgets to pay for the cuts. Starting June 24, bus and subway tickets in Sao Paulo will cost 3 reais ($1.35), the same price before a 20 centavo increase took effect this month.

Organizers of the nation’s biggest protests in almost two decades had vowed to remain on the streets until fares were lowered. Still, the decision over transport costs may be too late to quell a movement that has mushroomed into a catch-all for discontent over everything from inflation to the quality of public education. Last night, masked protesters tried to commandeer Latin America’s longest bridge, and a march is scheduled in Sao Paulo today.

“We don’t expect people to just quit protesting,” Rio Mayor Eduardo Paes said while announcing the fare cuts. “People are protesting for more than just bus fares, and that’s their right. We’re just listening to what they’re saying, and this is a way to show it.”

The nation’s attention yesterday was on the city of Fortaleza, in the country’s northeast, where the unrest stole the spotlight from the nation’s love of soccer.

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Brazilian President Dilma Rousseff could find her prospects in next year’s presidential election damaged by the protests. Close

Brazilian President Dilma Rousseff could find her prospects in next year’s presidential... Read More

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Photographer: Evaristo Sa/AFP via Getty Images

Brazilian President Dilma Rousseff could find her prospects in next year’s presidential election damaged by the protests.

Blatter Leaves

There, police battled an estimated 25,000 demonstrators who gathered outside of the stadium where the national team was hosting Mexico to protest excessive spending ahead of next year’s FIFA World Cup. Police fired tear gas and rubber bullets to repel the crowd, some of whom responded by throwing stones.

Inside the arena, fans held up signs denouncing corruption and bearing what’s become the student-led movement’s rallying cry: “the giant has awakened,” a reference to Brazil’s national anthem. Soccer legend Pele, in a video, called on Brazilians to “forget all this confusion that’s happening in Brazil” and refrain from booing the national squad.

Amid the unrest Sepp Blatter, head of soccer’s governing body, departed Brazil, surprising officials who had expected him to remain for the length of the two-week Confederations Cup, a warm-up to next year’s tournament. FIFA said Blatter was traveling to Turkey to attend the Under-20 World Cup and will return to Brazil June 26 for the semi-finals.

Market Turmoil

President Dilma Rousseff, who was jeered at a packed stadium June 15, has been trying to get ahead of the protests, which reached a peak June 17 when more than 200,000 people marched in 12 cities.

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A demonstrator wearing a Guy Fawkes mask is pictured during clashes in downtown Rio de Janeiro, on June 17, 2013. Close

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Photographer: Lluis Gene/AFP via Getty Images

A demonstrator wearing a Guy Fawkes mask is pictured during clashes in downtown Rio de Janeiro, on June 17, 2013.

“The voices of the street want more citizenship, health, transportation, opportunities,” Rousseff, who was jailed and tortured for taking up arms against Brazil’s 1964-1985 military dictatorship, said earlier this week. “My government hears those voices.”

The crisis comes as emerging markets are being battered by investors and Brazil struggles to recover from its second-worst economic performance in 13 years. Latin America’s biggest economy is forecast to grow 2.49 percent this year after expanding 0.9 percent in 2012.

The real plunged 1.9 percent yesterday, the most in a year, and Brazilian stocks fell to a four-year low as investors abandon emerging markets on speculation the Federal Reserve will begin tapering an $85 billion per month bond-buying program that has helped keep interest rates down.

Yesterday was also marked by some of the first daytime disturbances in Brazil, as protesters burned tires and blocked traffic on a highway in Sao Bernardo, a working-class suburb of Sao Paulo. In Brasilia, activists backed up traffic for miles.

Airport Closure

Come nightfall, some of the protests turned violent. The 13-kilometer (8-mile) bridge connecting Rio with sister city Niteroi was closed during rush hour as riot police tried to block a violent group working their way to the thoroughfare. They instead tried to set fire to a bus with a motorist inside. Security was beefed up at Sao Paulo’s main domestic airport, known as Congonhas, amid fears it would be occupied.

Since the start of protests, several state capitals, including Cuiaba and Porto Alegre, have reduced bus fares. Sao Paulo Mayor Fernando Haddad, a member of Rousseff’s Workers’ Party, had resisted such a move for fear it would bankrupt his government, which already spends 1.2 billion reais on subsidies for transportation.

Olympic Host

Paes said the decision to cut fares will cost Rio, the host city of the 2016 Olympic Games, as much as 500 million reais a year. Earlier in the day Haddad said that freezing fares at 3 reais would cost 2.7 billion reais in annual subsidies by 2016.

A bill working its way through the Senate that would cut taxes for public transport companies could provide some relief as well.

The Free Fare Movement, which has helped organize the protests, said it will go ahead with a march scheduled for today, adding that it hopes for a record turnout to celebrate its gains and to pressure cities that have yet to lower fares.

“This is a big victory for the population, for the street, for the fight,” Marian Vivian, a 23-year-old waitress and geography student who speaks on behalf of the movement, said by phone from Sao Paulo. “The governor and the mayor were scared to death. They’re not used to movements this big.”

To contact the reporters on this story: Joshua Goodman in Rio de Janeiro at jgoodman19@bloomberg.net; David Biller in Rio de Janeiro at dbiller1@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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