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Cablegate: Rio de Janeiro Pol/Econ Roundup for Sept-Oct 2008

VZCZCXRO9040
RR RUEHRG
DE RUEHRI #0301 3041213
ZNR UUUUU ZZH
R 301213Z OCT 08
FM AMCONSUL RIO DE JANEIRO
TO RUEHC/SECSTATE WASHDC 4684
INFO RUEHBR/AMEMBASSY BRASILIA 1015
RUEHSO/AMCONSUL SAO PAULO 5205
RUEHRG/AMCONSUL RECIFE 3474

UNCLAS RIO DE JANEIRO 000301

SIPDIS

E.O. 12958: N/A
TAGS: PGOV KCRM EMIN ENRG EPET BR
SUBJECT: RIO DE JANEIRO POL/ECON ROUNDUP FOR SEPT-OCT 2008

SUMMARY

1. The following are highlights of Political/Economic activity in
Rio de Janeiro's reporting district during the months of
September-October 2008.

-Municipal Elections
-High Profile Murders in Rio de Janeiro
-Brazil Mining Giant Vale Posts Record Profit Despite Crisis
-Petrobras Launches First Brazilian-Built Oil Platform

MUNICIPAL ELECTIONS

2. On October 2008, Brazilian cities elected new Mayors. In Rio de
Janeiro's consular district, the winners are:

-- Rio de Janeiro, RJ: Eduardo Paes (PMDB Party), 50.8 percent in
second round run-off.

-- Belo Horizonte, MG: Marcio Lacerda (PSB Party), 59 percent in
second round run-off.

--Salvador, BA: Joco Henrique de Barradas Carneiro (PMDB Party),
58.4 percent (reelected) in second round run-off.

-- Aracaju, SE: Edvaldo Nogueira (PCdoB Party), 51.7 percent in
first round.
-- Vitoria, ES: Joco Coser (PT Party), 65 percent in first round.

Around 3,500 federal military troops had been stationed in the city
of Rio de Janeiro since September to supplement state authorities in
countering alleged voter intimidation by drug traffickers and
militias. For both rounds of voting, no major incidents were
reported.

HIGH PROFILE MURDERS IN RIO DE JANEIRO

2. A recent wave of violence against public officials suggests that
criminals are becoming more brazen in their activities. On October
16, Colonel Jose Roberto do Amaral Lourenco, warden of Bangu Prison,
was killed in broad daylight in a neighborhood of western Rio de
Janeiro. Officials stated that he was shot 60 times as he was
driving his car. As the administrator of one of Rio's largest
prisons, Lourenco regularly received multiple death threats. He was
the seventh Bangu prison warden to be assassinated in eight years.
Five days later on October 21, Rio de Janeiro City Councilman
Alberto Salles was shot five times in his car on a major highway,
also in daylight. Salles had recently reported to authorities that
drug traffickers from Mundial favela in northern Rio were demanding
weapons in exchange for authorization for him to campaign in their
community. Just days later, wealthy supermarket magnate Artur
Sendas was murdered in his home in the affluent Leblon neighborhood
- several Consulate officers live within a block or two of the crime
scene (note: police have arrested one of the Sendas family drivers
in connection with the murder). The state public security apparatus
is under fire for not ensuring the safety of its officials, and for
allowing criminality to spill out from the poorer favela areas.

BRAZIL MINING GIANT VALE POSTS RECORD PROFITS DESPITE CRISIS

3. Rio-based Vale do Rio Doce (VALE), the world's largest iron ore
producer and exporter, posted a record USD 6 billion net profit in
the third trimester of 2008. This is a 167 percent increase over
the same period last year. Because many of its holdings are outside
Brazil, the ongoing global international financial crisis
contributed to Vale's remarkable quarter in a positive way, partly
due to the U.S. dollar's appreciation against the Brazilian real,
Vale reported. The international price increases of iron ore and
pellets were also a major factor. Vale's earnings per share reached
USD 96 cents compared to USD 61 cents per share in same period one
year ago.

PETROBRAS LAUNCHES FIRST BRAZILIAN-BUILT OIL PLATFORM

4. On October 7, Petrobras launched the first semi-submersible oil
platform (P-51) built entirely in Brazil. The platform cost USD 1
billion and is scheduled to operate in the Marlim Sul field in the
Campos Basin. According to Petrobras, when the platform reaches its
peak operating capacity of 180,000 barrels of oil and 6,000,000
cubic meters of gas per day in 2010, the P-51 will account for 8
percent of the domestic oil production. The P-51 is one of the
federal government's Growth Acceleration Program (PAC) projects.
The construction work generated approximately 4,000 direct and
12,000 indirect jobs, contributing both to the growth of the
domestic industry and to increase the volume of jobs in the
country.

MARTINEZ

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