The party rocks day and night, long after the official four day religious festival has ended.

But all good things must come to an end and in early March each year the revelers start to melt away, the tourists move on and Olinda’s original residents – who had left to escape the noise – move back home and the town returns to its sleepy self.

Right now, Brazil feels like it’s on the brink of a just such a post-Carnaval hangover.

It has been quite a party. Festivities have been in full swing across the country since 2004 to the rhythm of the Lula Model, the growth engine unofficially named after Brazil’s former president, based on high demand for Brazil’s commodities such as Chinese appetite for iron ore, which has in turn fueled a domestic credit boom.

The recent Brazilian growth miracle has propelled the country to the heights of the second largest emerging market in the world, briefly knocking the UK off sixth-place in global GDP rankings in 2012.

Foreign companies, excited by the prospect of one of the few growth markets in the world post-financial crisis have piled in, as Brazilians snap up flat screen TVs, cell phones, fridges and cars. And credit has expanded to pay for it all. The number of credit cards issued between 2004 and 2011 grew 132%, according to Brazilian credit consultancy, GoOn, a higher rate than the United Kingdom.

However, just like Olinda there are signs that the party might be winding down.

Firstly, on the domestic front there are signs now that the Brazilian consumer may have overdone it. According to a study by the Brazilian Consumer Defense Association (Proteste Study) debt servicing now represents an average 46% of monthly household income.

And for lower income Brazilians, who have largely driven the consumer boom, debts in arrears are rising (from 22.4% in July to 23.7% in August, 2012).

Then there is Brazil’s export performance. One good indication is that showcase of Brazilian industrial might, the mining giant, Vale do Rio Doce. This year it has seen falling Chinese demand for its iron ore, which has halved in value in the last year and has reined in spending accordingly. The Chinese slowdown is already having an impact on the Brazilian economy and a hard landing would undoubtedly exacerbate this situation.

If these two wheels have indeed fallen off Brazil’s wagon, does that mean the party is over?

Well, Brazilian consumers here aren’t likely to lose their substantial appetite for the latest gadgets or cars anytime soon, so the idea this is a massive consumer market is absolutely correct. 

There are also signs that the current Rousseff administration recognizes things need to change and aims to tackle Brazil’s problem head-on to increase competitiveness. It launched one of the largest infrastructure projects in the world to reduce bottlenecks. It has also reduced taxes (today it announced electricity bills will be cut by 16% in 2013), lowered interest rates and cut Federal VAT (IPI) on cars.

But can such tinkering really “keep the shuttlecock in the air?” – as the Brazilians say.

The key question I think is how long all this will take? While the government has a lot of room to maneuver and money to spend, the improvements to infrastructure will take years.

There are also deeply entrenched interests in Brazil that do not necessarily want to see any changes at all, i.e. some trade unions oppose any modernization of its archaic labor laws.

Another Achilles heel is educational reform, which would require a whole generation before any improvement is clear.

Personally, I think the Brazilians will be able to party on, but the 24 hour Olinda street Carnaval is definitely over. For the foreseeable future festivities here are likely to assume the frivolity of a low alcohol beach Luau.

You can reach the author at edcatchpole@hotmail.com.

The event, which will continue until July 12, is open to the public and should receive around 250,000 visitors, according to estimates by the fair's organizers. The government of Pernambuco promotes the event and is expecting a turnover of 22 million reais (US$ 11.2 million) in business deals during the ten days of the fair.

In 2009, besides maintaining countries that exhibited in the previous edition – such as Chile, Bolivia, Egypt, India and Portugal -, the fair will bring exhibitors from Argentina, Bangladesh, Guatemala, Mexico, Japan, Palestine, Venezuela and Vietnam.

Despite the presence of international work, 70% of the fair's premises will be occupied by handicraft from Pernambuco, says the general coordinator of the event, Roberto Lessa. "Our state is particularly wealthy," he says, "few compare to Pernambuco in terms of spontaneous generation of handicraft work."

Although the fair stands out for the diversity of handicraft techniques on display, it also features typical examples from each of the Pernambuco regions, according to Lessa. Among the techniques used by artists from the state are is clay modeling, leatherwork, and woodwork.

One of the most typical – clay sculptures of folkloric characters of Northeast Brazil – was made famous by Mestre Vitalino, an artisan who would turn 100 years old in July 10th, and who will be paid homage at the event.

The Bodega da Caatinga, a network of cooperatives formed by artisans and small-scale producers from the Northeast, is one of the exhibitors that will bring handicraft typical of the Northeast to the fair. Supported by a project of the United Nations Development Program (UNDP), the network comprises production from the states of Pernambuco, Alagoas, Bahia, Rio Grande do Norte and Ceará. The Bodega provides advisory to its affiliates on means for producing in a sustainable way, and for adding value to products.

The most important aspect of the fair is the possibility of making contacts and promoting business, says Maurí­cio Aroucha, the biologist in charge of providing guidance to the Bodega artisans. "If all that we do is encourage production in some remote location in the interior, who is going to go see it?"

This is his second time at Fenearte; the group has already taken part in fairs of the type in other states of Brazil. Aroucha explains that this enables the signing of agreements that bring the handicraft work to restaurant chains, hotels, snack bars and even international natural product companies.

Lessa, the event's coordinator, also highlights the fact that knowledge is exchange and there is direct contact between artists and the public. He explains that at several moments there will be artisans working amidst the passers-by.

Aroucha says that Fenearte is different from other events because its long duration, of ten days, increases attendance by families and even school trips. To him, this climate, which is not business-only, favors the promotion of the handicraft work.

Organizers are expecting Fenearte to generate 20 million reais (US$ 12.5 million). The amount should represent growth of 20% over the business volume recorded last year. The exhibitors will occupy an area of 25,000 square meters (269,098 square feet) in the Pernambuco Convention center.

The area will also represent expansion compared with the 2007 edition, when 20,000 square meters (215,278 square feet) were made available. There should be 770 stands and 3,200 exhibitors.

This year, Fenearte is being organized by the Agency for the Economic Development of the State of Pernambuco (AD Diper), along with the state secretariats for Economic Development, Tourism, Science, Technology and Environment, and Education.

Also helping to promote the event are the Pernambuco Tourism Company (Empetur) and the Foundation for the Historical and Artistic Heritage of Pernambuco (Fundarpe).

At the fair, handicraft products made in Brazil and abroad will be on display. Visitors include importers and Brazilian storeowners. Last year, Fenearte received 218,000 visitors.

The business roundtables are going to be coordinated by the Brazilian Micro and Small Business Support Service in the State of Pernambuco (Sebrae-PE). A total of 25 large-sized Brazilian storeowners were invited to attend the roundtables.

The meetings between suppliers and potential buyers, which resulted in revenues of 3 million reais (US$ 1.8 million) last year, should generate revenues 10% higher in this edition, according to estimates by the organizers of Fenearte.

According to information disclosed by the press advisory for the event, exhibitors from 20 different countries are going to showcase their art during the fair, from July 4th to 13th. Among them artisans from Dubai, in the United Arab Emirates.

Service

Fenearte
Site: www.fenearte.com.br
Date: July 4 to 13
Time: 2 pm to 10 pm
Place: Pernambuco Convention center – Olinda
Tickets: 4 reais (US$ 2.5 – full price) 2 reais (US$ 1.25 – students, children and senior citizens)

Anba

The minister made a point to stress that the whole health network in Brazil had been instructed to hand out condoms to anyone who asks for them.

NGOs (Non-Governmental Organizations) in recent days had complained that there were not enough condoms to go on and that there were cases like in Salvador, capital of Bahia state, where homosexuals had been barred from getting the male contraceptives.

"We have distributed 20 million condoms for Carnaval. We will distribute 600 million male contraceptives this year. We made a purchase of 1 billion condoms, which is going to insure that people can access the product regularly. The government vouches for the distribution," said Temporão.

"The condoms are already in the states and capitals. Yesterday I talked to Salvador's Health secretary. And everybody should rest assured that the condoms will be made available not only during Carnaval, but throughout the whole year," the minister added.

Temporão once again regretted the position taken by the Catholic Archdiocese of Recife and Olinda, which went to court to try to prevent the distribution of the morning-after pill in the state of Pernambuco. The Catholic Church lost its case.

"The morning-after pill is an emergency medication to be used only in cases of extreme necessity. But science has already shown that this is not an abortive pill. The morning-after pill prevents fecundation and I believe women have the right to get this medication," the minister insisted.

The Health minister said that he considered the Catholic Church's stand inadequate, but he recognized that the polemic was absolutely understandable as an issue of public health.