THE WORLD BELONGS TO THE DARING
I was on vacation, hiking among glaciers and sheep in the mountains of eastern Turkey and disconnected for the first time in years from Brazil and the news, when I checked my email and found it full of puzzling messages. The connection was slow, so I stared in confusion at those subject headings—“Hope you’re safe,” “Are you OK?”—for a few seconds before the rest of the messages loaded.
Safe? I had no idea what they were talking about.
As their messages and Brazilian news websites appeared on the screen, my heart sank. What had prompted them to write was news, big news, big enough to show up in American papers.
Demonstrations were blanketing downtown Rio, São Paulo, and other state capitals; police were cracking down on protesters with batons, firing tear gas, pepper spray, and rubber bullets at close range. Images of bloodied protesters were all over my social media feeds. I saw the reason behind the worry piling up in my inbox. Journalists were particularly targeted. One photographer was hit in the eye with a rubber bullet; a handful of others were hit in the face. In photo after photo, the strikes looked deliberate. The Brazilian Association of Investigative Journalism tallied fifteen journalists hurt in one day of protest coverage in São Paulo.
All of it seemed surreal, an anachronism reminiscent of the aggression unleashed by the military regime on pro-democracy protesters a generation ago.
What happened to the new Brazil, this up-and-coming country with solid institutions, a breath of equality, freedom of speech? The president and her two predecessors, the worker and the intellectual, had all fought in their very different ways for a government that represented its people, for democracy. Now marchers and reporters were once again being bloodied on public streets by police untrained or uninterested in peaceful crowd control. And there I was, stranded in a mountain town on the other side of the world.
The violence of the police reaction came as a shock, but so did the demonstrations themselves. In the short weeks I’d been away, Brazil had erupted with some of the largest and most resonant waves of protest in its history.
The catalyst was an innocuous march over a ten-cent hike in bus fares in São Paulo. Dissatisfaction had built like gas in room with a slow leak, invisible but dangerous. The unrest in São Paulo was the spark that triggered an explosion of pent-up demands. Within days, protesters were clamoring for better hospitals, better schools, less corruption, less brutality at the hands of police.
Back in Istanbul, I watched as videos showed Brazilian streets convulsing in city after city. Hundreds of thousands were joining these demonstrations that no politician, community leader, academic, or journalist had predicted. Even the protesters themselves were caught off guard by the strength of the movement, which wasn’t even a formal movement. Although banners were soon raised, there was no political party behind the rallies, no singular issue or segment of society leading the charge.
I understood the frustration. This was June 2013. By then I’d been in Brazil for nearly three years, and knew about the terrible services, the corruption that drained public funds, and the venal political class. But those problems had plagued Brazil for generations. What new element suddenly made that old mix so explosive? And why were protests that started over the cost of public transportation and called for basic services so threatening to authorities they elicited this violent response?
The answers were rooted in the changes I’d observed since arriving. The country’s economic outlook had changed since that cover of The Economist showed Cristo rocketing off his perch. The boom of 2010, when talk of Brazil was studded with exclamation marks and the economy grew at a China-like rate, had given way to three years of middling growth. But this wasn’t the whole explanation, or even most it. This slowdown hadn’t hit pocketbooks just yet. Employment was still strong, and inflation, the indicator that most worried Brazilians who suffered the instability of the 1980s and 1990s, was still within predicted parameters.
Watching videos stream over the Internet, reading and rereading placards and banners, what I saw were core middle-class demands: For a country without corruption! Stop the thievery or we stop the country. We want hospitals. Where are our taxes going?
There were polite ones—Sorry for the inconvenience, we’re changing the country!—and those that went for laughs: There are so many things wrong in this country I can’t fit them on this poster!
Not even the national passion was spared their fury; fans trying to reach Rio de Janeiro’s Maracanã Stadium for the Confederations Cup, a test run to the World Cup, had to charge past clouds of tear gas and riot police trying to contain protests over the volume of public money spent on sports venues. Posters pointed this out as well: Forget stadiums, I want world-class schools. Call me World Cup and invest in me! one student’s sign said, and another, I didn’t vote for FIFA!
What I saw was that, with dinner on the table and democracy guaranteed, Brazilians wanted more—they wanted the whole package. The protests were the growing pains of a middle-income country with a middle class that had awakened to the reality that they paid taxes, they voted, and they wanted what was their due: decent services and elected officials who represented their interests.
After all, this was not the broke Brazil of yore that defaulted on international loans and cycled through so many currencies the Treasury had run out of historical figures with which to illustrate new bills—or so the joke went. This Brazil rested on a decade of economic stability and growth, and had enough oil reserves to pave its way to a better future. Watching the protesters with their banners, I saw a people who had long recognized the country’s entrenched inequities, but who had only recently become aware of its potential. That was the Brazil they were chanting for on the streets.
There was a punch line Cariocas invoked whenever there was a massive failure of infrastructure: when a hard rain turned town squares into Olympic-sized pools, or when the commuter trains broke down in triple-digit heat, someone inevitably would pipe up, “Imagina na Copa!” Imagine during the Cup, when this city, already at capacity, will receive millions of visitors as the world watches.
Following the demonstrations on the news, the words came back to me. Imagine these scenes during the World Cup, or later, during the Olympics. Tens of thousands on the streets. Tear gas wafting into stadiums. Armed police bludgeoning protesters and journalists. I could see why the crackdown was so vicious. Authorities were desperate to stop this outpouring, by any means. They had sold the world a country that was democratic, stable, safe for investment. Angry protesters were not part of that picture.
Government officials had deeper reasons for worry. These were revolts born of higher expectations, and were likely harbingers of more upheaval. But they came at a time when the economic landscape was dramatically altered. Just when the population wanted more, Brazil’s economy was stalling.
Dilma was also caught off guard. Approval of her government had plummeted from a peak of nearly 63 percent in March to 31 percent in June 2013, when collective frustration had reached a boil.
She addressed Brazilians directly on June 21, after weeks of protests. The goal was to connect with the population and reassure them she was listening, but her measured words sounded distant from the raw emotion in the streets. The determination she’d shown as a young militant had hardened into something unbending, unapproachable. Her hair was shaped into a lacquered helmet, her shoulders squared, all of her unyielding in appearance and tone. She met her electorate on television with cool caution, a Botox-smooth brow, and promises wedged between calls for restraint.
“As presidenta I have the obligation to hear the voice of the streets and to dialogue with all segments, but all within the dictates of law and order, which are indispensable to democracy,” she said.
She did make three concrete promises: to develop a national plan for affordable public transportation, to invest the expected oil royalties in public education, and to expand the capacity of the public health network by bringing in foreign doctors.
Over the months that followed, the protests lost much of their initial force, but nonetheless persisted. Of the thousands that had marched on Rio’s governor, a few score held on, camped out in front of his Leblon apartment. Cabral’s approval rating sank to a dismal 12 percent. He would never recover, and he resigned before the end of his mandate.
Dilma, who had one year to go until the next round of presidential elections, got busy pushing through the measures outlined in her speech. A controversial plan brought Cuban doctors to underserved regions; Congress approved a law that dedicated the bulk of oil revenues to education and health. She met with social movements, but the population was largely unmoved. Her popularity remained a fraction of what it had once been, and Brazil was still gripped by a volatile sense of dissatisfaction. Small but frequent violent protests flared across the country.
Four months after the start of the demonstrations, she was back on television. This time the president would play her trump card, sharing with Brazilians a development that would bolster public accounts and allow the government to respond to their demands. This was the auction of Libra, the first of the deep-offshore oil fields open to exploration by foreign oil companies. In her own words, this would be Brazil’s “passport to the future.”
Trapped underneath a layer of salt deposited during the evaporation of a prehistoric ocean, these vast deposits are estimated to hold up to 12 billion barrels of light crude. Altogether they are the biggest oil discovery in the Americas in a generation.
Libra’s contents, together with the 15.4 billion barrels estimated to lurk within the rest of the pre-salt fields, plus the rest of the country’s proven reserves of 15 billion barrels, would be enough to hoist Brazil to new geopolitical heights. If these estimates proved true, Brazil could go from being the world’s fifteenth-largest oil producer to one of the top ten, catapulting over China, Qatar, Kazakhstan, the United States, and Nigeria and landing somewhere near Libya, with its 48 billion proven barrels.
I followed the president’s words on television, along with millions of other Brazilians. Coming from an oil family, I was more aware than most of the commodity’s turbulent history, and the whiplash it had dealt Brazil not so long ago.
A mismanaged energy policy had been an important trigger in Brazil’s downfall. In 1973 the country had been under the thumb of dictators but economically it flourished, feeding on cheap fuel from abroad to grow at rate of 10 percent a year. All went very well until October 16 of that year, when members of the Organization of the Petroleum Exporting Countries jacked up the price of a barrel of oil from $3 to more than $5 and pricked the balloon of the global economy.
At the time, Brazil imported 80 percent of its fuel. Faced with the sudden hike in price, the government chose to borrow money and push ahead rather than cut oil consumption and rein in the galloping pace of development. It worked in the short term. As other economies, including the United States, dipped into recessions, Brazil continued to borrow and grow. Debt soared, and so did inflation. By the end of the 1970s, interest rates on the borrowed money were ratcheted up, and Brazil was taking on new debt just to pay the interest on the old. Nineteen eighty was the last gasp in this mad race; that year Brazil still grew an incredible 9 percent. By 1982 the country was broke. Brazil defaulted on its loans. Inflation climbed from peak to peak until it reached a dizzying record of around 2,500 percent in 1993.
Now Brazil had its own source of oil. Deep within the complex geological formations of the pre-salt fields was the key to energy self-sufficiency and the solution to the country’s most intractable problems, Dilma said. Having followed petroleum’s bounty around the world during my childhood, I was keenly aware it was not always a blessing. For every Norway, with its generous social services, there were a handful of examples that showed the damage that mismanaged oil wealth could do. Sudden prosperity does not reform broken institutions or necessarily strengthen democratic channels. On the contrary, it often reinforces whatever social structures and power dynamics are in place. If these are corrupt and unequal, these traits can be exacerbated as well. It was still unclear how this revenue would play out in this shifting Brazil, but there were reasons to doubt it would do everything the president was promising.
The first problem was timing. Brazil had been celebrating this oil boom since November 2007, when the discovery was announced. The auction offering up Libra was momentous, but it came more than six years after the initial discovery. The excitement that followed the initial declaration had dimmed, muddled by political infighting among Brazilian states and the federal government about how to share the profit. As the years passed, Brazil’s discovery was overshadowed by developments elsewhere, such as the exploration of shale oil and tar sands that had bolstered North America’s energy potential and again tilted the global energy tables.
Lawsuits marred the run-up to the auction, and it took a task force of three hundred federal government lawyers to fend off the twenty-seven legal challenges. Protesters—from nationalist, it’s-our-oil types to striking Petrobras workers—gathered at the beachfront hotel where the auction took place and clashed with soldiers sent to contain them, enveloping surfers and sunbathers in a nauseous mix of chanting and tear gas.
Then there was the way the auction was handled. With a focus on short-term gains, the federal government required participants to pay a mandatory signing bonus of $7 billion. This would bolster Brazil’s primary surplus in the year leading up to the election, but it was steep, even by international oil company standards. This and other restrictive conditions scared off giants in the business such as Chevron, ExxonMobil, and BP. Of the more than forty companies expected to take part in the auction, only eleven confirmed their participation.I
The result: the jewel of Brazil’s oil bonanza attracted a single bid. It was a consortium led by Petrobras with 40 percent participation, China’s CNOOC and CNPC with 10 percent each, France’s Total and the United Kingdom–based Royal Dutch Shell, with 20 percent apiece.
Given the apparent lack of enthusiasm, Dilma’s first job was to reassure the population that the sale had been a success. Indeed, the consortium was a solid and politically palatable mix of foreign and domestic, public and private companies. Together they had the cash and the experience to develop Libra, an adventure expected to cost about $400 billion, according to IHS, the largest consulting firm in the sector.
Also, under the terms of the agreement, approximately 85 percent of the revenue generated would revert back to Brazil, directly or through Petrobras. As promised, approximately $50 billion over ten years would be dedicated exclusively to two of the areas where protesters had clamored for investment: education and health.
Federal policy also dictated that up to 70 percent of all the gas ducts, supporting ships, platforms, and other equipment necessary to produce this oil had to be made in Brazil. This hamstrung Petrobras and other companies involved, but it promised jobs and investment, much of it in Rio.
But Dilma’s post-auction speech did nothing to assuage concerns about its most debated aspect: the heavy hand with which her administration had shaped the process, imposing restrictions and costs on participants to bolster public coffers during a politically sensitive year.
This came at a time when investors were already wary of other interventions in the economy to keep up appearances. Inflation control was an example. By 2013, this old haunt was rearing its head again, though it remained just within the generous ceiling of 6.5 percent. The official inflation number was artificial, though, the result of price caps on costs the government could control, like fuel, electricity, and transportation. These fixed costs balanced other rising expenses. They also weakened some of the most important national companies, such as Petrobras and Eletrobras, by forcing them to sell their fuel and electricity at a loss.
Dilma’s administration was increasingly reliant on this kind of intervention. It worked in the short term, but was unsustainable in the long run, injecting uncertainty into the market. How long would the price holds last? And when these expenses went up, as they would have to, what would they mean for household expenses, industrial costs, and inflation figures?
These questions, together with the sluggish growth of recent years, cast doubt on the country’s direction and its long-term financial health.
The international scenario that had helped in the early 2000s, with its high commodity prices and great demand for Brazil’s exports, was a thing of the past. The spending and credit access that had fueled the economy internally had run its course. There would be no new consumer run on televisions, cars, and washing machines. By the Libra auction, this growth model had played itself out, and it was starting to show. Two thousand thirteen was the third slow year in a row; Brazil was no longer a sure thing.
That impression was nailed home by news that the oil firm OGX, crown jewel in pop-star billionaire Eike Batista’s coterie of companies, was filing for bankruptcy protection. It would prove the unraveling of his empire.
I’d watched Eike since my return. He was the country’s wealthiest man, an inveterate self-promoter who put himself forward as the sun-kissed face of this can-do Brazil. He also identified closely with Rio, putting $11 million of his own money into the city’s Olympic bid and contributing $10 million a year to the UPP program, among many other projects.
In a year and a half, he’d had gone from poster boy of the country’s economic turnaround to starring in the continent’s biggest corporate bust. His fall shook the oil world, but also reverberated well beyond it, raising more questions about Brazil’s economic fitness and the future of the city he was helping remake.
The tale had the contours of a telenovela, the prime-time soaps that keep devotees entranced with hairpin plot twists and juicy make-out scenes. Eike was a self-styled leading man, with a chiseled jaw, gray-blue eyes set off by a dusting of gray at the temples, and a melodramatic lifestyle. He had been a powerboat racing champion and husband to Luma de Oliveira, a Playboy centerfold and actress who danced her way through the Carnaval parade one year wearing nothing but sequins, towering platform heels, and Eike’s name on a choker. They divorced in 2004, but not before bearing two sons named after Norse gods, Thor and Olin.
Brazil’s superrich don’t usually flaunt it, out of safety concerns if nothing else. But Eike liked to traffic in superlatives. His private yacht was often seen hugging Rio’s sinuous coastline, and he had another, a 177-foot converted cruise ship kitted out as a party boat. A silver Mercedes-Benz SLR McLaren, one of his many cars, was often left on display inside his mansion’s living room.
Beyond the gossip-magazine material, what made his story fascinating was the degree to which the billionaire’s rise paralleled Brazil’s own. Eike also owed much of his fortune to commodities. After trying his luck at several businesses and riding out a minor boom-and-bust cycle with a gold mining project, he started an energy company in 2001 and an iron ore firm four years later. Both went public. But it was the pre-salt finds that Lula called “a second chance for Brazil” that would be Eike’s ticket to the top.
In July 2007, a month after Petrobras confirmed the pre-salt discovery, he launched OGX with the intention of going after any offshore fields Petrobras missed. He’d never worked in oil before, but by then no one doubted Eike’s golden finger. The firm’s initial public offering in 2008 was the biggest in Brazilian history and raised nearly $4 billion.
Back then, Brazil was a party; investors who wanted to dance came to him—big names like BlackRock, Pimco, Mubadala, E.On, General Electric, ExxonMobil, IBM.
At his peak, he was inescapable. The man tweeted like a teenager, entertained celebrities, wrote a book of corporate advice, posed for photos, and regaled journalists with quotable bites spiked with his trademark hubris: “My companies are idiot-proof,” or “The world belongs to the daring.” When Charlie Rose asked him what he wanted in the next ten years, he replied, “I want to be the world’s richest man.”
Those who found his performance grating or his strategies reckless kept quiet, glad to be participating in the bounty. Critics were shunted out of sight.
Eike projected himself onto Rio, remaking the city he loved in his own, larger-than-life image. Beyond donations to the Olympic bid and to the UPP program, he had stakes in the Maracanã stadium and contributed to cleaning up the lagoon by Ipanema. With loans from the national development bank, he began renovations of the old Hotel Glória, a handsome building with an Art Deco façade and known for its traditional Carnaval costume balls, and bought a twenty-four-story building with commanding views of the bay to transform into a hotel in time for the Olympics.
His empire would come together at the super-port of Açú. Set in a remote corner of northeastern Rio state, it was, like everything he touched, meant to be better, bigger, grander. Its footprint was one and a half times that of Manhattan. Once it was completed and running the mega-operation would handle 350 million tons of goods a year and link Eike’s logistics, shipbuilding, energy, and oil ventures in a self-contained loop that would feed itself and mint money.
When he hosted President Dilma and Governor Cabral in Açú in April 2012, the president put on the company’s orange jacket and gushed: “Eike is our standard . . . Brazil’s pride.”
The plan behind Açú was brash and nakedly ambitious—pure Eike. All of it rested on his collection of start-ups, especially OGX and its promise of oil.
So when, just over a year after the president’s visit, OGX announced its wells were duds, what could have been a contained disaster in the hands of a more cautious man instead brought down his empire. He was overleveraged, running a business built largely on debt, charisma, and the promise of this new Brazil. When the bills came due, he couldn’t pay. Investors fled and prepared legal action.
His projects around Rio were abandoned, visual cues of his spectacular crash: a UPP station was left, half built, in Batan. The Hotel Glória, which I biked past on my way to the Sunday farmer’s market, stood amid abandoned cranes. The twenty-four-story building in Flamengo was deserted, and the sight of its gutted and weedy carcass reiterated the question: to what extent had Eike represented Brazil, and Rio in particular? More important, how much would they share his fate?
Lula, who’d famously said it was easy to help the poor, also said in 2010 that “it was rich people who made the most money during my administration,” making clear that Brazil under the Workers’ Party was very much open for business. Dilma had less compunction about making capital’s needs second to those of the state. The über-capitalist Eike had been the fig leaf that covered this up.
Now Eike’s empire had crumbled, the government’s accounts were deteriorating, and investors scanning the world’s economies for a place to put their money began to pull away.
Brazilians had noticed their buoyant economy was deflating, and that the years of plenty had not been used to invest in the economy or raise productivity. This was evident from the posters raised during the 2013 protests. As the tax burden grew and became one of the world’s highest, at 36 percent of GDP, the population did not receive better services or infrastructure for it. They just got a bigger bureaucracy.
Transportation of goods, for example, was inordinately expensive because of poor roads, rail lines, ports, and airports; this jacked up the cost of living and made Brazilian products less competitive abroad. But the main federal program to improve infrastructure, the Programa de Aceleração do Crescimento, or Growth Acceleration Program, which was launched in 2007 and expanded in 2010, was very much behind schedule and over budget by 2013.
The number of federal ministries, however, had grown with each administration, going from 24 under Fernando Henrique Cardoso to 37 under Lula to 39 under Dilma. Each hung heavy with appointees and public servants. Together, they cost the taxpayer $27 billion in 2013.
Voters had marched during the Confederations Cup. They could do so again during the World Cup and the Olympics, transforming what had been intended as the country’s moment to shine into a sharp-edged political rally.
So, was the party over? Perhaps, but this was not all that bad.
Eike’s empire had rested on debt and his high-wattage smile. Brazil, in spite of its serious structural problems, had a solid economy with a flawed but functioning democracy. It had grown in ways that mattered, that started with the economy but went well beyond. The June 2013 marches may have unnerved the president, but they were a symptom of this maturity.
What the country needed most was, in fact, what the demonstrators had pointed out: painful, difficult, but necessary reforms. These included trimming government rolls, improving services and infrastructure, and tearing up the red tape that made running a business or renting an apartment so daunting.
The tax code could be simplified. The school system, which favored universities accessible mostly to the elite over elementary education or technical training, could be brought to better balance. None of these things were easy, and they would not gain the economy traction immediately, but would get the country in shape for steady, if unspectacular, progress.
So, in spite of Dilma’s words, oil would not, could not, be Brazil’s salvation. There would be no miracles.
But increased cash flow could help, if well managed. There were niches in the national economy and in Rio’s landscape where this was already taking place. To understand the impact it could have, I visited Rio’s port, deep within Guanabara Bay’s embrace.
The old docks had been the city’s engine for centuries. Smooth granite blocks, laid in the era before concrete, still lined the bay’s oil-slicked waters. The port had anchored Brazil’s naval industry through the late 1970s, when it was the second largest in the world, behind only Japan.
Back then, it had housed the largest shipyard in South America, the Inhaúma, from which sailed the greatest ships ever assembled in the country—hulks such as the Tijuca, which could carry 311,000 tons in its steel belly. In the 1980s, the economy collapsed and took the entire industry with it.
By the end of the 1990s, Brazil had stopped producing ships and oil platforms and the Inhaúma was abandoned. Bright orange blossoms of rust etched the picked-apart innards of the old yard and the vaulted ribs holding up empty warehouses. Only the long-limbed cranes remained standing, their spare bodies crumpling into themselves before the eyes of drivers on the overpass nearby.
Now, with the certainty of oil waiting just beyond the horizon and beneath miles of ocean, sand, rock, and salt, the shipyard began to stir again. In 2011 an old ship slipped past the pillars of the Rio-Niterói Bridge and into Guanabara Bay. It was the tanker Titan Seema, essentially a bucket with a motor built in 1993 to ferry crude from port to port and retired two decades later, when its outdated engines made it too expensive to operate.
When this giant pulled into the Inhaúma, it was the meeting of two veterans. The shipyard hadn’t built so much as a canoe in over a decade. And yet, it was tasked with transforming the Titan Seema into P-74, a floating industrial plant able to suck in oil from the deep, separate it from corrosive gases, water, and other gunk, store the fuel, and then offload it to ships in high seas, all the while keeping its position through storms, high wind, and the jostle of waves by relying on high-end computerized systems.
By late 2013, the transformation that would bring the shipyard back into shape was well under way. The manager, Alexandre Cruz, walked with me through the Inhaúma’s innards and explained its complex and costly rebirth. Brazil’s shipping industry had deteriorated to such an extent it was virtually being created from scratch, he explained.
Stocky and weathered by the sun, Cruz had close-cropped hair and a punctilious manner. He’d known the Inhaúma since the 1980s, when Brazil still had a fleet to be reckoned with. He worked on board Petrobras vessels and would dock there when the ships came in for repairs. Back then, the place had been alive with workers, he said; for every boat resting on the support pillars at the bottom of the Inhaúma dry dock there was another one waiting its turn outside.
The slow collapse of the place tore at him. The single company that continued to use the yard for basic repairs cannibalized the broken machinery for parts needed to keep a few essentials in working shape; the ground was littered with their remains.
When the commercial docks had died, they had taken the neighborhood, Caju, with them.
In the eighteenth and nineteenth century, Caju had housed gentry. Hand-painted, blue-and-white Portuguese tiles and granite doorways still decorated façades of the few colonial homes that stood. Once upon a time, not long after 1808, when the Portuguese royal family had settled in Rio, the emperor Dom João VI came to Caju for his medicinal ocean baths. The rest of the royals followed suit and started a fad, turning Caju into Rio’s first beach resort. Through the early twentieth century, bathers would board trolleys and head to its beach for a day at the sea.
In the years that followed, Caju lost its shine and became an extension of the dock, the home of fishermen and stevedores. While the waterfront hummed with work, it remained vibrant, but when the country fell on hard times, the shipyard let its people go, and the neighborhood collapsed further into itself.II
For decades, decay wore down the little peninsula. Abandoned trucks lay beached on the sidewalks, their husks stripped of anything that could be sold. The trash company stopped making its rounds, and refuse piled; no one filled potholes as they appeared in the streets, and when the sewage system backed up, it spewed unmolested, turning manholes into foul fountains. A favela sprouted among the wreckage.
Now the shipyards and the docks at the heart of Caju were working again. Alexandre led me through a landscape of all-encompassing industry. Although we were by the water, not far from where small islands overflowed with exuberant greenery, we were battered by the screech of drills puncturing metal, the corrosive nose-feel of solvent, and the bustle of thousands of workers.
We finally reached the ship itself, nested inside a dry dock. Even by the vast dimensions of the shipyard, it was extraordinary—an empty shell the length of a hundred-story skyscraper laid on its side.
The race to reach the oil was such that the ship and the shipyard were being brought out of retirement at the same time, Alexandre explained. The six thousand welders, mechanics, painters, electricians, and others who hurried about, setting a frenetic pace, were evenly split between the two jobs. “We’ve already lost too much time as it is,” he said.
The ship’s guts had been carved out to make way for the platform parts and lay beside it, a mountain of contorted steel. Metalworkers had examined its cavernous insides, capable of storing 1.4 million barrels of oil, to see where it had worn too thin for use. On the great upswell of its hull there were shiny scars where plates had been replaced as well as X’s, arrows, and circles drawn in chalk, hieroglyphics understandable only to the experts.
The ship-cum-platform was about ready for a coat of paint. After refurbishing, it would go to the Paranaguá shipyard in southern Brazil to be topped with three stories’ worth of cutting-edge equipment before heading out to the pre-salt fields.
It was that vast oil discovery that made the Inhaúma’s regeneration feasible, Alexandre said. Even now, the shipyard had an order to create four of these platforms for Petrobras.
We turned away from the ship and began to head back to the entrance. I noticed the safety signs were in Portuguese and Mandarin. It’s because of the new cranes, Alexandre said; they came from China on board Korean ships. Three were already standing, red and white, vibrant against the luminous gray sky. Another was perched on a ship, about to be offloaded and then assembled by the Chinese crew that came with it.
I asked about the crumpled cranes that had dangled over the port for so many years. Their twisted shapes had come to stand in my mind for the desolation of the docks, and of Rio.
Alexandre stopped, looked to where they had stood. The cranes had been taken apart, he said. It was one of the first things he did.
“This is how I think about it: We’ve got this technical side. We have to get permits, refurbish, operate, all at the same time,” he said. “But there’s also the psychological side. We had to improve the way this looked. It impacted the morale of the workers, their productivity, our credibility. We had to show people things were changing.”
After visiting the shipyard, I wanted to walk and think, to weigh the vigorous optimism of someone like Alexandre against the broader challenges facing Rio and Brazil. Since I was in Caju, and I’d always wanted to see the emperor’s bathhouse, I went looking for the place. It still stood somewhere in this neighborhood.
Beyond the gates of the shipyard there were signs of improvement. Policing had returned when a UPP was inaugurated in early 2013; officers in their blue button-downs kept watch over narrow streets. Homegrown restaurants serving up rice and beans had sprung up to feed the workers who had returned. Trees had been pruned recently, and the piles of garbage were largely gone.
Abandoned trucks still hogged the sidewalks, pushing me into roads where the sparse traffic raised little tornados of dust. Although it was early evening, there were streets in which I was the only pedestrian. Low-lying colonial houses with chipped blue windowsills and tired once-white walls were boarded up, their planks splintering.
Of Caju Beach only the name remained. Landfill had pushed the ocean hundreds of feet away, and Praia do Caju was now the name of the street that lay where the bay once met the sand. Cobblestones paved the way to number 385, the bathhouse. Half a dozen palm trees stood guard before the modest whitewashed and green-shuttered house. The little plaza it faced would have been bucolic if it weren’t for the busy Rio-Niterói Bridge arcing above. Cars sped by, nose to tail, creating their own winds and ruffling the mop tops on the palms.
The doors were locked. A sleepy-eyed man answered my knocks by opening a window. The bathhouse was closed. He didn’t know why, querida, he didn’t know when it would open, he didn’t know who to ask. “Volta mais tarde, meu amor.” Come back later. He just didn’t know.
Not too far away, the Inhaúma was forging a part of Brazil’s future. Standing by Alexandre, I had felt its frenetic energy and through it, the country’s promise. Standing in front of the emperor’s bathhouse on the cobblestones still warm from the afternoon sun, faced with the guard’s eternal indifference, I felt the weight of Brazil’s past. What had been achieved in the past decade and a half—the stability, the decrease in inequality, the strengthening of the middle class—was tremendous. But there was a legacy of centuries to be surmounted.
Two large, glossy cockroaches scuttled by my feet, resolute and innocent like windup toys. I turned to wave good-bye to the guard, but he’d already closed the shutters.
I. Private companies would also have to follow a host of stipulations during oil exploration. Brazil had switched from a concession-based system to a production-sharing one in which the fields remained in the hands of the government and the private sector partner got a share of oil for its participation. Under these rules, Petrobras would be the sole operator of the pre-salt fields and retain one-third of the control of all ventures. The Brazilian government would get a cut of at least 41.65 percent of the profit oil.
II. Highways also severed Caju from the city and increased its isolation: first Avenida Brasil, in the 1940s, then the Linha Vermelha, a highway linking the airport to downtown.