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Amid Economic Crisis, Anxiety Grows In Struggling Southern Brazilian State

Philip Reeves NPR
Porto Alegre, one of Brazil's most important commercial and industrial hubs, has declared itself in "financial calamity." Brazil is in the midst of its longest and deepest recession.

Philip Reeves NPR
Carlos Roberto Gomes buys gold — and human hair — on a street corner in downtown Porto Alegre.

Philip Reeves NPR
Amid Brazil's worst recession on record, shops like this one in Porto Alegre are holding final sales before they close.

Philip Reeves NPR
Teachers at a rally in Porto Alegre celebrate their decision to go on strike on March 15.

Philip Reeves NPR
Uber drivers in Porto Alegre take to the streets to protest the murder of a colleague and to demand better safety on the streets.

Philip Reeves NPR
Military police patrol the streets of downtown Porto Alegre amid growing concern over rising crime.

Philip Reeves NPR
In downtown Porto Alegre, graffiti calls for the ouster of President Michel Temer.

Carlos Roberto Gomes spends his days leaning on a stone wall with a big, brightly colored sign around his neck.

His sign advertises the services that he offers to passersby on the downtown street where he earns his living.

It says that Gomes buys gold. He can fix you up with a tattoo or some body piercing.

Read the sign closely, and you'll also see that he might be willing to lop off your hair and purchase it from you.

Top-quality human hair from Brazil fetches a good price in Europe's salons, where it's sold as extensions and wigs, explains Gomes.

If your locks are sufficiently lustrous and long (more than 14 inches), he says he could pay you up to $230 for it.

Gomes says some of his clients routinely grow their hair specifically to sell it for extra income.

Latin America's largest nation is enduring unusually tough times. Gomes reckons about half his customers these days are compelled by economic hardship to trade their hair for cash.

"Some people cry," he remarks. "They're only selling their hair because they've run out of money."

Gomes works in Porto Alegre, a city that sits beside a giant freshwater lagoon on the edge of the Atlantic ocean. It is one of Brazil's most important commercial and industrial hubs.

Porto Alegre translates as "Joyous Port." For much of history, that description seems to have suited the place. Its 2 million inhabitants have a reputation for being passionate about music, literature and soccer — and for enjoying a relatively high standard of living.

Now, though, the city's neoclassical high-rise blocks and boulevards have the tinge of dinginess and exhaustion that tends to settle on towns that are down on their luck.

Joy is in short supply.

Protests amid "calamity"

Statistics released this monthconfirm that Brazil has endured the longest and deepest recession in its recorded history. Its economy shrank by 7.2 per cent over the last two years.

Nearly 13 million Brazilians are out of work, more than the entire population of Greece. The government says there are signs of recovery. Yet these are fragile.

In Porto Alegre, this crisis has an extra dimension. The city is the capital of one of Brazil's 26 states, Rio Grande do Sul, which is roughly the same size as Nevada.

The state sits on Brazil's southern end, bordering Uruguay and Argentina, where South America's forests fade into a vast and fertile grassland known as the pampas.

It's the source of most of Brazil's wine, and also beef, soybeans, shoes, cars, high-tech equipment and more.

Rio Grande do Sul's finances have been in trouble for decades, generating an unsustainable mountain of debt; it owes $18 billion to the federal government.

Last November, it officially declared itself in "financial calamity" — in effect, bankrupt. It's one of three Brazilian states that have done so.

Several thousand people last week gathered inside a training arena belonging to Internacional, one of Porto Alegre's two world-famous soccer clubs.

For once, these were not adoring fans who'd come to watch glamorous multi-millionaires show off their ball skills. They were low-paid teachers, whose trade union leaders summoned them from across the landscape for a protest meeting.

The state is paying their wages several weeks late — and often in very small installments. The government also wants cuts and reforms, which the teachers strongly oppose.

Angry banners were draped around the arena, demanding the ouster of the state governor, Jose Ivo Sartori, and the Brazilian president, Michel Temer.

In a show of hands, the teachers overwhelmingly voted to go on strike from March 15. To cheers and whistles, they headed out into Porto Alegre for a protest march.

There are many protests these days on the city's streets.

The day before the teachers' rally, a procession of horn-blaring taxis decorated with black balloons brought the center to a standstill.

These were Uber drivers, demonstrating over the murder of a 33-year-old colleague, and demanding that the authorities make their city safer.

"Things are getting ugly, especially for people who work in the evening in Porto Alegre," said Isael Ribeiro, 26, one of the drivers. "Security is very weak. The police can't cope. There is far too much violence."

Statistics suggest he's right. Homicides statewide have risen by 65 percent in less than a decade-and-a-half. Last year, 2,608 people were murdered, according to Rio Grande do Sul's Department of Public Security.

Yet the police are also being paid late in small installments — and are badly undermanned.

The state-run military police says it needs a force of 37,000 in order to tackle the worsening security situation. In 1994 — when the population and crime rate was significantly lower — its numbers peaked at 29,000. It now has 18,000.

"This is all the fault of politicians. They're all the same," says Aparicio Santellano, president of a staff association representing force members.

Asked how these politicians went so badly wrong, his reply is startlingly blunt: "They stole."

Avoiding a pension crisis

Last month, Brazil received a sobering reminder of how a crisis in state finances can lead to chaos.

Police in a smaller, cash-strapped Brazilian state — Espirito Santo — stopped patrolling the streets during a pay-related protest. The resulting wave of murder, robbery and looting was so severe that the federal government opted to send in the army.

Anxious to avoid more trouble, officials from the federal government and Rio Grande do Sul are trying to work out a deal to ease the crisis, along with the two other big Brazilian states in "calamity," Rio de Janeiro and Minas Gerais.

Brazil's government has offered Rio Grande do Sul a three-year break in debt payments. But there are controversial conditions attached. These include privatizing some state-owned enterprises — a move that requires a statewide plebiscite.

According to observers, the public would likely vote against the plan.

For economist Darcy Carvalho dos Santos, privatization fails to tackle the root cause of what he calls an "enormous crisis." He sees that as the state's crushing pension bill. Teachers who have paid pension contributions for 25 years can retire at 50. For police, it's after 30 years.

"In the [Rio Grande do Sul] civil service, there are many more people being paid pensions than there are working," says Santos. Unchecked, the problem can only be made more acute by demographics: the state's population is growing older, he says.

For Brazil's President Temer, reforming pensions is a core part of his plan to overhaul the nation's welfare system. Yet Temer's government is tangled in a huge corruption scandal. The next election is only a-year-and-a-half away and it's far from clear that he has sufficient political support — or time — to make much progress.

There's already widespread resistance to his plans. On Wednesday, protests and strikes were held in many of Brazil's towns and cities, causing traffic jams, public transport chaos and, in some areas, the closure of schools, banks and government offices.

Critics of the reforms come from a broad range of professions — including the police in Rio Grande do Sul.

"Every day, we confront people with guns and knives," says Emerson Ayres, president of the state branch of the civil police officers' union. "We go into houses without knowing what we'll find and work 20 hours straight. You just can't do such a job for more than 30 years."

As people wait to see if the crisis will ever be resolved by their unloved politicians, Porto Alegre appears gripped by anxiety.

"I don't know what the future will be like, but I think it'll be worse for my children," says Joao Feck, 54, a father of two standing in line to buy a lottery ticket.

"It's going to be very tough," he says. "I've always had work, but no one knows what it'll be like for them. It's very difficult."

Walk the streets of the "Joyous Port" and you're unlikely to find anyone who disagrees with that — including Carlos Roberto Gomes, the street corner peddler who buys human hair.

"We're asking God Almighty that this comes to an end," he says, "and that it ends soon."

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