High Pricing and Profiteering Culture?

The week is well underway....Tuesday already and thanks for looking in on the Blog.  I am so grateful to you for your support.

Well, it may early days in this new week, but Dave is angry!

The story that provoked the anger actually broke at the end of last week, but I was fixated on other issues for the Blog.  Now, having read about the problem again, I wanted to ponder it with you.

You may recall that the money being spent on preparation for the soccer World Cup was one of the issues that sparked the protests of last June.  Strange, you might think, in a country wherein soccer is all but a religion and pride in the national team is a hot passion rather than a pastime.  It was, indeed, surprising to many but we have to note that large sections of society, here, are suffering woeful standards in public services, key public/social services such as health and education and that, as a result, the money reportedly being spent from their own 'national pocket' on a sports competition which most will be unable to afford to go to hurt and angered; though, for the sake of balance, we should note that the Government insists that almost all money spent will be covered by public/private partnerships and other funding initiatives.

Media reports now underline the fact that so many ordinary Brazilians will unable to afford to visit the various stadia (or stadiums, if you prefer) to watch matches live.  It is not just that the ticket prices are beyond the reach of so many, but the extraneous costs that will prohibit enjoyment of the live events.  We are told that domestic air tickets between match cities on game days are already up to ten times more expensive than the standard price.  Ten times!  The Rio de Janeiro to Sao Paulo ticket for June 12 with TAM Airlines is said to be R$2,393 ($1,096) if bought now, about seven months before the journey date, for flight that takes less than one hour.  The normal price for the trip, as at last Thu, was $160.  The less than one hour flight will cost you more than flying to Curacao, in the Caribbean and only a touch more than a return trip to New York City.

This kind of profiteering incenses me.  If you cast your mind back a few days on the Blog, you will recall that:  the Economist found burgers in Rio de Janeiro and Sao Paulo amongst the most expensive in the world; Reuters reported that a Jeep Grand Cherokee that cost around $28,000 in the USA cost around $89,500 in Brazil; that a new survey, from last week, highlighted Brazil as having the most expensive cell/mobile phone bills in the world and that a Tripadviser survey survey found hotels in Rio and Sao Paulo to be more expensive than in London or Zurich and that prices in the shops were similarly punishing.  All this, and many more examples besides, in a country with an average monthly wage of about $600-$700.

I cannot help but feel that if the apparent profiteering in World Cup airline ticket costs, above, is followed by other commercial groups this will further play into the hands of potentially disruptive elements such as the anarchist Black Bloc; about whom we spoke yesterday.  To be honest, one almost finds oneself saying, '...and who would blame them....'!  Many of the visiting supporters may be able to afford being financially raped during their one off visit to Brazil, but ordinary people will also need to fly during that time for business, family and other reasons and will require to purchase other goods that may be subject to blatant profiteering....ordinary people who have trouble affording the usual high prices from which we all suffer here.

Many factors play into pricing in Brazil that result in levels often being two or three times what you might pay for the similar article in the USA:  sub-standard road and rail infrastructure results in very high transport costs; a complex and multi-layered tax system, federal, state and city combine to hike prices - the tax burden aggregates to 36% of GDP, compared to 21% in most middle income countries; import duties on many items are exceptionally severe; very high power costs and fuel costs - Brazil is an oil producer but has not yet sufficient refining capacity and has to import the refined fuel products; the residue effect of previous rampant inflation, with prices staying at given numbers when inflation was brought under control, which equals an effective price rise and what seems to be a national trait, here, to drive for maximum profit in the shortest time.

I have found the drive to benefit oneself in monetary terms, even at the cost of friends or family, to be very strong here; even amongst people who are otherwise generous of time and in giving favours etc.  You might hear that a friend or family member is looking for an item, but can only find it for R$100, which is above what they can afford to pay.  On your travels, you find the said item on sale for R$70 and buy it.  My experience of friend and family social circles from elsewhere is that you would then sell it to the individual for that same price of R$70....but not here.  Here, you might sell it to them for R$80, arguing that they benefit by still saving R$20 on the best price they had been able to find and you benefit by making R$10 on the deal.  Often the amount seems irrelevant to the people with whom I have been discussing this, it is more the apparent cultural imperative, the principle of making something whenever you can.  We have to remember this is still an emerging country and a very poor one in may areas and within the lower socio-economic groups.

Irrespective of any perceived profit or profiteering culture, we must look to Government, FIFA and other authorities to try to impact on the race for exceptional, unreasonable monetary gain during the World Cup that is likely to hurt those least able to bear the pain....and risk fuelling the fire within groups such as the Black Bloc and within the population as a whole, as we discussed in yesterday's post.

Right, that concludes the first post ans I shall intend to get out a 'social/cultural' post this afternoon/evening.  In an attempt to rationalise effort with my other Blog, I shall plan to put out the usual morning posts, Monday - Friday, an add a second post on Tuesdays and Thursdays; as my other Blog posts take up the afternoons/evenings on Mon/Wed and Fridays.

Thanks very much indeed for dropping in and sharing my thoughts.  Do feel free to comment if you feel so moved and join the conversation.

Stay safe.

Dave