(Pastor Silas Malafaia, leader of the evangelical church in Brazil, speaks at the “March For Family” demonstration against gay marriage and abortion, in front of the National Congress in Brasilia June 5, 2013. REUTERS/Ueslei Marcelino)

When televangelist Silas Malafaia gathered 40,000 followers outside Brazil’s Congress this week, it wasn’t just to raise their arms to the sky and praise the Lord.

The rally was a show of support for lawmakers who oppose abortion and same-sex marriage and a message to other politicians that they should not ignore Brazil’s fast-growing evangelical churches if they want to stay in office.

“Gay activism is moral garbage,” Malafaia roared into the microphone to a cheering crowd on the grassy esplanade of the Brazilian capital. “Satan will not destroy our family values.”

The rise of evangelical Christians as a conservative political force in Latin America’s largest nation has put the ruling Workers’ Party on guard and led President Dilma Rousseff – who is seeking re-election in 2014 – to appoint an evangelical bishop to her cabinet.

The growing clout of evangelical churches is also bringing social and moral issues such as abortion to the center of the national agenda, some say at the expense of political and economic reforms needed to restore robust growth to the world’s seventh-largest economy.

Pentecostalism was introduced to Latin America by U.S. missionaries a century ago and has gained masses of followers in recent decades in countries like Brazil, especially among the urban poor who feel neglected by the dominant Catholic Church.
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The rally was a show of support for lawmakers who oppose abortion and same-sex marriage and a message to other politicians that they should not ignore Brazil’s fast-growing evangelical churches if they want to stay in office.

“Gay activism is moral garbage,” Malafaia roared into the microphone to a cheering crowd on the grassy esplanade of the Brazilian capital. “Satan will not destroy our family values.”

The rise of evangelical Christians as a conservative political force in Latin America’s largest nation has put the ruling Workers’ Party on guard and led President Dilma Rousseff – who is seeking re-election in 2014 – to appoint an evangelical bishop to her cabinet.

The growing clout of evangelical churches is also bringing social and moral issues such as abortion to the center of the national agenda, some say at the expense of political and economic reforms needed to restore robust growth to the world’s seventh-largest economy.

Pentecostalism was introduced to Latin America by U.S. missionaries a century ago and has gained masses of followers in recent decades in countries like Brazil, especially among the urban poor who feel neglected by the dominant Catholic Church.

With their vibrant preaching, emotional prayer and singing, evangelical Protestant churches appeal to Brazilians more than the liturgical masses of the Catholic Church. They also use electronic and social media more effectively to proselytize.

EXODUS

Many Brazilians who join evangelical congregations say their new religion has brought meaning to their lives, that they no longer identified with the Catholic Church.

Brazil is the world’s largest Catholic nation and Pope Francis will travel to Rio de Janeiro next month on his first trip abroad as pontiff, in part to try to reverse the exodus away from Catholicism.

The Catholic Church is losing followers across Latin America – even among Hispanics in the United States – and opinion polls in Brazil point to the Church’s strict positions on sex and divorce as contributing factors.

A Datafolha survey in March found 58 percent of Brazilians believe the Catholic Church should accept divorce and 83 percent believe the use of condoms should be allowed, two issues where the Vatican has refused to budge and evangelical churches are more flexible, allowing followers to decide for themselves.

One in four Brazilians is an evangelical Christian today and their churches have multiplied and become wealthy institutions that own radio and television networks, finance political campaigns and even fund their own political parties.

While Catholic priests are banned from running for public office, evangelical churches actively encourage their pastors to engage in politics and often use the pulpit to persuade their followers who they should vote for.

“Today there are 44 million mainly Pentecostal evangelicals in Brazil, which is a large social force. Obviously, this was going to change things in Congress,” said Fernando Altemeyer, a former Catholic priest who teaches theology at the Catholic University of Sao Paulo.

In the last national election in 2010, evangelicals increased their presence in Congress by 50 percent and now have 68 seats in the Chamber of Deputies and three in the Senate. Though belonging to a dozen different parties, evangelicals have begun to act as a caucus in Brazil’s fragmented legislature where only the farm lobby tends to speak with one voice.

ANTI-GAY PREACHER

The evangelical presence in Congress has been very much in the public spotlight since one of its members, a conservative preacher known for his racist and anti-gay statements, was named chairman of the chamber’s Human Rights and Minorities Committee.

Pastor Marcos Feliciano, of the Social Christian Party, once stated that John Lennon’s murder was divine retribution for saying the Beatles were more famous than Jesus Christ.

The committee’s sessions have been disrupted almost daily by demonstrators demanding Feliciano’s ouster. He has ordered guards to remove the protesters and closed the committee to the public. Congressmen from Rousseff’s Workers’ Party walked out, saying he was unfit to be chairman.

His backers say the longer the controversy lasts, the more votes evangelical candidates will get in the next election because he is defending traditional family values.

“He got 200,000 votes in the last election. Well, he won’t get less than 500,000 next time,” Malafaia said in an interview before his rally in Brasilia on Wednesday. “He’s on a roll.”

“The Workers’ Party is going to suffer in the next election because of the evangelical vote,” Malafaia predicted.

Rousseff has every reason to worry. In 2010, evangelical voters helped force the election to a runoff after abortion became a big issue late in the campaign and many votes went to her Green Party rival, Marina Silva, an evangelical Christian.

Last year, Rousseff named evangelical bishop Marcelo Crivella as her fisheries minister, even though he admitted publicly he knew little about fishing. Crivella is nephew of Edir Macedo, founder of the Universal Church of the Kingdom of God. Bishop Macedo, a billionaire who owns the TV Record network, has 5 million followers and is a hugely influential power broker in Brazil.

“Rousseff is not going to do anything that would alienate the evangelicals,” said David Fleischer, political science professor at the University of Brasilia. “No candidate in their right mind would do that.”

(Editing by Kieran Murray and Eric Walsh)

The government has been struggling to defuse tensions with indigenous tribes over farmland in several states as well as over hydroelectric dams in the Amazon.

Tensions escalated in a disputed property in Mato Grosso do Sul that was invaded last week for a second time by Terena Indians angered by the fatal shooting of one of their tribe’s members. Local media said the man’s cousin was shot and injured on a nearby ranch on Tuesday.

“We must avoid radicalizing a situation that goes back a long way in Brazilian history,” Justice Minister Jose Cardozo told reporters after meeting lawmakers from Mato Grosso do Sul in Brasilia.

“We’re not going to put out the flames by throwing alcohol on the bonfire,” he said.

However, protests have now erupted across the country.

In Rio Grande do Sul state, about 2,000 Kaingang and Guarani Indians were blocking roads to protest the government’s decision to put on hold the granting of ancestral lands to indigenous communities, a concession to Brazil’s powerful farm lobby.

“The government has abandoned us. Dilma isn’t supporting indigenous peoples,” Indian chief Deoclides de Paula said by telephone from a blocked highway.

In Curitiba, the Parana state capital, 30 Kaingang Indians invaded the offices of the ruling Workers’ Party on Monday and only agreed to leave 10 hours later when they were promised a meeting with Rousseff’s chief of staff, Gleisi Hoffmann.

Hoffmann, who will run for governor of Parana next year, said last month that the role of the government’s Indian affairs office, Funai, in land decisions would be restricted.

Cardozo, however, stressed on Tuesday that Funai would not be gutted and would continue to play a central role as the main institution that defends Indian rights, though others will be brought in to improve the process of deciding ancestral lands.

FIELDS BURN AFTER INDIAN DEATH

The government has been scrambling to avert violence since a 35-year-old Indian man was shot dead last week when police evicted 200 Terena from the disputed cattle ranch of a former congressman.

Angry Terena Indians armed with sticks, bows and arrows reoccupied the property on Friday and set fire to fields and blocked roads on Tuesday.

Late on Monday, a local judge extended for 36 hours the eviction order, allowing more time for a peaceful resolution.

Brazil’s indigenous land policy, established in the country’s constitution, is considered one of the most progressive in the world, with about 13 percent of the huge South American nation’s territory already set aside for Indians.

Farmers say Funai is trying to create reservations on land that has belonged to European-descended settlers for 150 years.

In another move to ease tensions with Brazil’s indigenous population, one of Rousseff’s ministers, Gilberto Carvalho, met in Brasilia with Munduruku Indians flown in on air force planes from the Tapajos, the only major river in the Amazon basin with no dams.

They want the government to shelve plans to build a dozen dams there, while the government hopes to finish work on the controversial Belo Monte dam on the Xingu River, a huge project aimed at feeding Brazil’s fast-growing demand for electricity.

Last week Indians paralyzed work at one of three building sites at Belo Monte, which is slated to become the world’s third-largest dam, capable of producing 11,233 megawatts of electricity – equivalent to about 10 percent of Brazil’s total current generating capacity.

Belo Monte is a pet project of Rousseff, but has become the target of international criticism by environmental groups. It has also become a stage for Indians from other parts of the Amazon.

“We went to see for ourselves what a hydroelectric dam is and we saw that it has nothing good in store for us,” a Munduruku leader told Carvalho, adding that promised development had not benefited the Indians of the Xingu. “We saw Indians being humiliated and we do not want that for our region.”

(Editing by Cynthia Osterman and David Brunnstrom)

The government flew 144 Munduruku Indians to Brasilia for
talks to end a week-long occupation of the controversial Belo
Monte dam on the Xingu river, a huge project aimed at feeding
Brazil’s fast-growing demand for electricity.

Authorities on Monday night reversed an order to evict
Terena Indians occupying a farm in Mato Grosso do Sul state that
they invaded last week for a second time, angered by the fatal
shooting of one of their tribe’s members.

Some 2,000 Kaingang and Guarani Indians continued blocking
three roads in Rio Grande do Sul state to protest the
government’s decision to put on hold the process of granting
ancestral lands to indigenous communities, a concession to
Brazil’s powerful farm lobby.

“We are waiting for confirmation of a meeting with the
governor before we lift the roadblocks,” Indian chief Deoclides
de Paula said by telephone from a blocked highway. “The
government’s policy is unconstitutional. Indian lands must be
set aside.”

In Curitiba, the Parana state capital, 30 Kaingang Indians
invaded the offices of the ruling Workers’ Party on Monday and
only agreed to leave 10 hours later when they were promised a
meeting with Rousseff’s chief of staff, Gleisi Hoffmann.

Hoffmann, who plans to run for governor of Parana next year,
announced the shift in Indian policy last month to congressmen
from agricultural states who complained that farmers were being
run off properties they have owned and worked for decades.

Farmers praised her announcement that other federal agencies
will be involved in land decisions, effectively reducing the
jurisdiction of the government’s Indian affairs office, the
Funai, and giving the state agricultural research institute
Embrapa a say in identifying Indian territory.

Brazil’s indigenous land policy, established in the
country’s constitution, is considered one of the most
progressive in the world, with about 13 percent of the huge
South American nation’s territory already set aside for Indians.

Land grants decided by anthropologists turned over huge
reservations to the Indians in the uninhabited Amazon, but
conflicts with farmers have multiplied as Funai moved to decide
on Indian lands in the farm belt of south-central Brazil which
has enjoyed a boom based on exports of soybeans and corn.

More land grants were still under consideration, but
government sources told Reuters that Rousseff did not plan to
approve any new Indian reservations for the foreseeable future.

FIELDS BURN AFTER INDIAN DEATH

The policy change is now fueling protests across the country
and the government is scrambling to avert more violence after a
35-year-old Indian man was shot while police evicted some 200
Terena from the disputed cattle ranch of a former congressman in
Mato Grosso do Sul.

Angry Terena Indians armed with sticks, bows and arrows
reoccupied the property on Friday and set fire to fields. Late
on Monday, in a change of course, a local judge ruled that the
Indians could stay put and instructed police to seek a mediated
solution that does not involve force, a federal police spokesman
in the area said on Tuesday.

In Rio Grande do Sul, farmers say Funai is trying to create
Indian reservations on land that has belonged to
European-descended settlers for 150 years. But de Paulo, who is
leading the protests, said only 0.27 percent of the state has
been set aside, too little for the state’s 34,000 Indians.

“The government has abandoned us; Dilma isn’t supporting
indigenous peoples,” he said.

ArpinSul, an indigenous organization helping to coordinate
Monday’s protests in Parana and the ongoing roadblocks in Rio
Grande do Sul, said it was waiting for confirmation of a meeting
with Hoffman.

In another move to ease tensions with Brazil’s indigenous
population, one of Rousseff’s ministers, Gilberto Carvalho, was
scheduled to receive a delegation of the Munduruku tribe in
Brasilia on Tuesday afternoon.

The Munduruku, who are from the Tapajos, the only major
river in the Amazon basin with no dams, are demanding a revision
of government plans to build a dozen hydroelectric dams there.

Last week they paralyzed work at one of three building sites
at Belo Monte, slated to become the world’s third-largest dam
capable of producing 11,233 megawatts of electricity, equivalent
to about 10 percent of Brazil’s current generating capacity.

Belo Monte, a pet project of Rousseff’s that was the target
of international criticism by environmental groups, has become a
stage for Indians from other parts of the Amazon.

While the latest occupation ended peacefully, a spokesman
for the consortium building Belo Monte dam said the protests
were becoming more tense each time.

“They held an arrow to the throat of a worker and threatened
to set fire to the offices,” the spokesman said. “The government
has to negotiate with the Indians for to avoid a tragedy.”

(Editing by Cynthia Osterman)

The land dispute turned bloody on Thursday when a Terena
Indian was shot dead during the eviction by riot police, who
used tear gas to dislodge some 200 natives from the cattle ranch
owned by a former congressman, Ricardo Bacha.

“The Indians are on the war path,” Bacha said in a phone
interview from his townhouse in Campo Grande, 70 kms (43 miles)
away from the farm in Mato Grosso do Sul state, a big producer
of soy and corn for export.

“They are wild about the death and occupied the farm again
because the police left and I could not go back. They burnt down
my house yesterday and my life would be in danger there.”

Bacha said 18 farms out of 30 in the 17,000-hectare (42,000-
acre) area claimed by the Terena as ancestral lands have now
been occupied by the Indians.

Brazil’s Indian affairs office, Funai, designated the area
as Indian land in 2010, though law courts have since ruled in
favor of the farmers’ ownership and issued eviction orders.

President Dilma Rousseff called an emergency meeting late on
Friday to discuss the mounting dispute over Indian land and the
occupation of a construction site at a major hydroelectric plant
by tribes opposed to building new dams in the Amazon.

Brazil’s indigenous policy, considered one of the world’s
most progressive, returns lands to natives when anthropological
studies find they had traditionally occupied the area. However,
it has sparked violence since the country became an agricultural
powerhouse and Indian policy has clashed with farming interests.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Rousseff sides with farmers in Indian fight

Special Report on Indian land disputes

Graphic on reservations: link.reuters.com/cux97t

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Reuters reported earlier this month that Rousseff ceded to
pressure from the farm lobby and ordered the Funai to stop
turning over farmland to Indians. The powerful farm lobby
contends that the policy is a misguided effort to right
historical injustices.

“The fault is of the government and the Funai which has gone
too far. We respect the Indians’ rights, but I inherited my farm
from my grandfather who bought the land in 1927,” said Bacha.

Farmers praised a government announcement on May 8 that
other federal agencies will be involved in land decisions,
effectively reducing the jurisdiction of Funai. The farmers want
politicians in Congress to have the last word.

About 13 percent of Brazil’s territory has been set aside
for Indians and handing over more is under consideration.
Conflicts, like the one at the cattle ranch, are common and are
growing increasingly tense.

Meanwhile, Indians who paralyzed one of the construction
sites on the Belo Monte hydroelectric dam – which will be the
world’s third largest with 11,200 megawatts of installed
capacity when finished in 2019 – refused to end their five-day
occupation until Rousseff sent a minister to talk to them.

The controversial Belo Monte project on the Xingu River has
become a magnet for Indians from other untouched river basins -
such as the Tapajos – who want to stop future dams planned to
supply Brazil’s expanding demand for electricity.

(Editing by Christopher Wilson)

“We’re ready for a deeper, broader relationship across the board on everything from the military to education, trade and investment,” Biden told reporters after meeting with Brazilian President Dilma Rousseff.

The White House announced on Wednesday that Rousseff will make a state visit to Washington on October 23, the only one that President Barack Obama is offering a foreign head of state this year, indicating the importance his administration is placing on closer ties with Latin America’s largest nation.

Biden praised Brazil for recently writing off $900 million in African debt, saying it showed the emergence of Brazil as a “responsible” nation on the world stage.

During his three-day visit, Biden also commended Brazil for lifting millions of people from poverty over the last decade and showing the world that development and democracy are not incompatible. However, he also urged Brazil to open its economy more to foreign bushiness and to be more vocal in defense of democracy and free-market values.

Relations between Washington and Brasilia have improved since Rousseff took office in 2011 and adopted a less ideological foreign policy than her predecessor, Luiz Inacio Lula da Silva, who befriended Iran and drew Brazil closer to Venezuela’s anti-U.S. government under the late Hugo Chavez.

As the Brazilian economy surged on a commodity boom in the last decade, China displaced the United States as Brazil’s largest trading partner due to its massive purchases of Brazilian iron ore and soy.

Perceiving the advent of better ties between Brasilia and Washington, U.S. and Brazilian businesses are actively pushing for a strategic partnership between their countries that would allow for more flexible investment rules, a treaty to eliminate double taxation and a visa waiver program to make travel easier for tourists and executives.

“The atmospherics are improving rapidly, in part because Brazil has taken a lower profile on some contentious global political issues like Iran,” said Eric Farnsworth, vice president of the Americas Society, a business forum dedicated to fostering ties between the United States and Latin America.

Brazil is also beginning to understand that China and other leading emerging nations are not yet substitutes for economic ties with the United States. While the so-called BRIC countries have rapidly gained a greater share of the global economy, they still are no match for American businesses in terms of providing the investment and technology Brazil needs, Farnsworth said.

“There seems to be a growing sense that the United States may unnecessarily and gratuitously have been pushed away by the previous government, particularly as China slows and commodities markets soften,” he said.

EMERGING POWER

Much of the future relationship with the United States will depend on whether Brazil, whose economy still remains relatively protected by high tariffs and other barriers, can make trade easier, Biden said in a speech in Rio de Janeiro.

Among many pending issues between the two nations are a longstanding effort to ease visa restrictions for travel and a push by U.S. companies for protection of intellectual property rights in a Brazilian marketplace rife with pirated software.

U.S. oil companies are keen to tap enormous offshore oil deposits that promise to turn Brazil into a major oil producer.

The United States is also urging Brazil to buy F-18s made by Boeing Co. to upgrade its fighter jet fleet, a multi-billion-dollar deal that would mark a significant jump in the strategic and security relationship between the two nations.

Brazil is seeking U.S. backing for a long-coveted permanent seat on the U.N. Security Council. Washington has said it “appreciates” Brazil’s ambitions at the United Nations, but has stopped short of backing its call for a place on the council.

While Biden stressed the potential of the world’s largest and seventh-largest economies to grow closer, a free trade agreement is not on the cards because Brazil is part of the South American customs union Mercosur. The bloc’s rules say member countries must act in unison on trade issues.

Some observers think it is not realistic to expect any dramatic move towards a full-fledged strategic partnership any time soon.

“Brazil has achieved the stature and recognition it enjoys today in part by maintaining its independence from the United States,” said Michael Shifter of the Inter-American Dialogue think tank in Washington.

“It will want to keep some distance, while seeking to take advantage of what the United States has to offer.”

(Reporting by Anthony Boadle; Editing by Paulo Prada and Doina Chiacu)

Neymar failed to inspire his team in a goalless draw against Flamengo in their opening match of the Brazilian championship played in the new World Cup stadium in Brazil’s capital.

The 21-year-old striker, seen as one of the brightest prospects in soccer, announced on Saturday he had picked Barca over Real Madrid and would be leaving Santos to sign a five-year deal with the Catalan club.

Many of the 63,500 spectators who filled Brasilia’s Mane Garrincha National Stadium were Flamengo fans who booed Neymar when he gained possession of the ball and cheered when he lost it.

The Brazilian ace with a Mohican hairdo cried during the national anthem line-up before the game, his last for the club that launched his career and where he became the top scorer since Pele.

“It was an honour to have played for this marvellous team Santos, I am so happy I did,” he told reporters.

“Every child has a dream, either to be a player, a dentist or a reporter. My dream was to become a professional athlete and I have achieved that. Today Barcelona is fulfilling my dream of going to a totally beautiful team,” he told Globo TV.

Some of the Flamengo fans who booed Neymar on Sunday will probably be cheering him on in the same Brasilia stadium on June 15 when he is due to play for Brazil against Japan in the opening game of the Confederations Cup, an eight-nation warm-up event for next year’s World Cup.

Neymar does not know when he will travel to Barcelona but said he was excited at the prospect of playing alongside Lionel Messi, Xavi, Andres Iniesta and Dani Alves.

“The Santos fans are the only ones who have always supported me. I can only thank them and say ‘see you later,’ because I will be back one day,” Neymar said.

Brasilia’s 71,000-seat Mane Garrincha stadium, named after the nation’s beloved dribbler who starred in Brazil’s 1962 World Cup win in Chile, appeared to pass the test game required by FIFA, even though half the spot lights went out mid-way through the first half. The captains decided to play on and the lights were restored at half time.

Brazil’s most expensive stadium ever cost 1.2 billion reais ($590.1 million) even though Brasilia has no major soccer team.

The city government is already looking for other uses for the arena and announced Beyonce will perform there in September.

(Additional reporting by Pedro Fonseca in Rio de Janeiro, editing by Pritha Sarkar)

Neymar failed to inspire his team in a goalless draw against Flamengo in their opening match of the Brazilian championship played in the new World Cup stadium in Brazil’s capital.

The 21-year-old striker, seen as one of the brightest prospects in soccer, announced on Saturday he had picked Barca over Real Madrid and would be leaving Santos to sign a five-year deal with the Catalan club.

Many of the 63,500 spectators who filled Brasilia’s Mane Garrincha National Stadium were Flamengo fans who booed Neymar when he gained possession of the ball and cheered when he lost it.

The Brazilian ace with a Mohican hairdo cried during the national anthem line-up before the game, his last for the club that launched his career and where he became the top scorer since Pele.

“It was an honour to have played for this marvelous team Santos, I am so happy I did,” he told reporters.

“Every child has a dream, either to be a player, a dentist or a reporter. My dream was to become a professional athlete and I have achieved that. Today Barcelona is fulfilling my dream of going to a totally beautiful team,” he told Globo TV.

Some of the Flamengo fans who booed Neymar on Sunday will probably be cheering him on in the same Brasilia stadium on June 15 when he is due to play for Brazil against Japan in the opening game of the Confederations Cup, an eight-nation warm-up event for next year’s World Cup.

Neymar does not know when he will travel to Barcelona but said he was excited at the prospect of playing alongside Lionel Messi, Xavi, Andres Iniesta and Dani Alves.

“The Santos fans are the only ones who have always supported me. I can only thank them and say ‘see you later,’ because I will be back one day,” Neymar said.

Brasilia’s 71,000-seat Mane Garrincha stadium, named after the nation’s beloved dribbler who starred in Brazil’s 1962 World Cup win in Chile, appeared to pass the test game required by FIFA, even though half the spot lights went out mid-way through the first half. The captains decided to play on and the lights were restored at half time.

Brazil’s most expensive stadium ever cost 1.2 billion reais ($590.1 million) even though Brasilia has no major soccer team.

The city government is already looking for other uses for the arena and announced Beyonce will perform there in September. (Additional reporting by Pedro Fonseca in Rio de Janeiro, editing by Pritha Sarkar)

Bernardo Figueiredo said Brazil needs to double its current level of investment in infrastructure to at least 80 billion reais ($39.2 billion) a year if it wants to resolve a transport crunch that has stymied the economy in recent years.

About half of that sum needs to come from private investors, Figueiredo, the head of government infrastructure agency EPL, told the Reuters Latin America Investment Summit.

Figueiredo said there was heavy interest from institutional investors in Europe and the United States during “road show” presentations that he gave earlier this year.

However, President Dilma Rousseff’s government has recently had to improve the targeted profitability of the projects. Many investors balked at the leftist leader’s effort to engineer a relatively low rate of return, part of her plan to reduce Brazil’s comparatively high profit margins in many industries.

Brazil recently raised the internal rate of return – a measure of profitability – for highway concessions from 5.5 to 7.2 percent previously.

Railway projects, including a planned Rio de Janeiro-Sao Paulo bullet train, will offer rates of return of between 7 and 7.5 percent compared to about 6.3 percent previously, Figueiredo said.

The higher returns may help ease investors’ concerns about doing business in a country with a promising economy, but a recent history of delays on big-ticket projects.

“The only risk that investors like to take is the risk of earning money; they dislike any other risks on principle,” said Figueiredo, an economist with 40 years experience in the transport industry.

“We recognize that the state has limits in its ability to finance and manage these projects so we need to turn to the private sector for capital and expertise,” Figueiredo said.

He said Brazil is also studying the creation of a new investment vehicle so that foreign pension funds can more easily participate in the projects.

The idea is to pool pension fund investment in a neutral fund that can bid for a stake in a project and become a partner with the winning consortium that executes it, while also investing in other projects to spread risk, Figueiredo said.

BULLET TRAIN

The world’s seventh largest economy is striving to overcome serious transport bottlenecks that have pushed up its production costs and reduced its competitive edge as a top global commodities exporter. Ships wait for weeks off-shore to dock at clogged ports to load soy that has doubled in price since leaving farms by truck.

Diagrams scribbled on the wall of Figueiredo’s meeting room show the railway lines that Brazil is planning to build, crisscrossing the huge country to connect its farming and mining hinterland to coastal and river ports for export.

Last August, Rousseff announced a 133 billion reais drive to build new highways and about 10,000 km of railroads in public-private partnerships.

Auctions of road contracts will begin in July and railways in September with concessions to be decided by December, he said.

Figueiredo said public financing will be raised from 70 to 80 percent for the high speed train project, a planned 350 kph (217 mph) train between Brazil’s two largest cities, and minimum bids for the 40-year concession will be lowered by 5 to 10 percent.

The decision to raise the government’s stake seeks to spread the risk after no bidders emerged for the high-speed project during an auction in 2011. Figueiredo said companies from a dozen countries, including Spain, are interested in the next auction, to be held in September.

Spanish Public Works Minister Ana Pastor, visiting Brasilia to lobby for her country’s businesses, said on Tuesday that a Spanish consortium of state-run and private companies was very interested in the Brazilian project.

“The Spaniards are very excited about the high speed train project. They won a similar project in Saudi Arabia,” Figueiredo said. “She said the Brazilian project is an absolute priority for Spain, because this is a good opportunity and they have invested a lot in high speed know-how.”

Companies from Chile, Argentina and Mexico are interested in the building of roads and trains in Brazil, and port reform legislation approved by Congress last week will allow more investment in private ports and the reorganization of state ports to improve efficiency, he said.

The government expects the drive to overhaul Brazil’s infrastructure will have a multiplier effect on its sluggish economy, creating demands for steel for rails and other goods and services. Figueiredo noted as an example that over the next 15 years Brazil will need 15,000 new locomotives and 100,000 train cars.

Brazil’s agricultural research institute Embrapa estimates that the planned railway lines will open up more than 60,000 hectares of new farm land that can grow some 200 million tonnes of grains.

(Reporting by Anthony Boadle; Editing by Brian Winter, Kieran Murray and Diane Craft)

“The pessimists said the stadiums would not be ready in time, but we are showing them today that we can deliver high-quality stadiums,” Rousseff said in a speech in Recife before opening the 46,000-seat Arena Pernambuco outside the northeastern Brazilian city.

Rousseff said Brazil is fulfilling its commitments with global soccer body FIFA, whose secretary general Jerome Valcke last year angered Brazilians by saying the country needed a “kick up the backside” to get World Cup preparations moving.

On Saturday, Rousseff kicked the first symbolic ball on the newly-laid pitch of the brand new Mane Garrincha National Stadium in the Brazilian capital of Brasilia, where Brazil will face Japan in the first game of the eight-nation Confederations Cup on June 15.

At a cost 1.2 billion reais ($590.1 million), the colonnaded stadium is the most expensive of the 12 that Brazil is building for next year’s 32-nation World Cup, and a prime candidate to become a white elephant in a city with no major soccer club.

Yet some of its 309 toilets were not ready yet and flooded during a test game between two local teams that filled half the 71,000-seat stadium. Its big test will come next Sunday, May 26, when two of Brazil’s top teams – Flamengo and Santos – will fill the venue for the opening of the Brazilian national league.

“These six stadiums show the ability and determination we have building the six remaining stadiums,” Rousseff said on Saturday.

Only two stadiums were completed in time for the December deadline originally set by FIFA, which takes over the first batch of stadiums on Tuesday.

FIFA has said it will not budge on the deadline for the second batch of stadiums due by the end of this year.

The main problem will be the Sao Paulo stadium where the World Cup is due to kick off in June 2014. Builders threatened to halt construction because of a financing dispute that might throw Brazil’s hosting of the World Cup into disarray and embarrass the government.

DRONES, ROBOTS AND PANZERS

Major logistical problems during the World Cup could damage Brazil’s image as an emerging power that is seeking to become a bigger player on the world stage. FIFA is worried that communications and transport infrastructure may not be ready to cope with the estimated 500,000 soccer fans who will descend on 12 Brazilian cities next year for the World Cup.

Western governments worry that Brazil is not prepared to counter possible terrorist threats during the massive event and the Olympic games that Rio de Janeiro will host in 2016.

Brazilian security forces have gone on a shopping spree for equipment to bolster their defenses for the global sports events and the first trip abroad by Pope Francis to Rio de Janeiro in July.

The Brazilian police have bought drones to keep an eye on the areas around the soccer stadiums during the games.

To enhance security for the tournaments, Brazil said it will buy robots that can inspect suspicious packages and detect and diffuse chemical and explosive devices in a $7.2 million contract awarded to Boston-based iRobot Corp.

Last week, the first of 32 used anti-aircraft Flakpanzer Gepard tanks bought from the German army to help bolster air defenses in the World Cup cities rolled off a ship in Rio.

Cranking up security ahead of the Confederations Cup, Brazil launched a massive military operation on Saturday to secure its porous 10,440-mile (16,802-km) frontier, much of which is Amazon jungle and rivers. The 25,000 troops and police agents will crack down on drug trafficking and smuggling of arms and illegal migrants, Brazil’s defense ministry said.

(Reporting by Anthony Boadle)