The Economist - USA (2020-11-07)

30 The Americas The EconomistNovember 7th 2020

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as much time as they want. That stopped

their employers from sacking them even

when they could not work. Women have

still lost more working hours than men in

Canada, but the gap is smaller than in the

United States, says Beata Caranci, tdBank’s

chief economist.

The number of jobs in e-commerce has

jumped, as shopping shifts away from the

high street. That has also happened in the

United States, but Canada started out with

fewer such jobs, and so the room for

growth is bigger. Although the weak energy

market has hurt oil-pumping Alberta,

prices of natural resources such as gold,

copper and lumber have stayed high. The

housing market has been buoyed by buyers

who reckon the shift to working from

home is permanent and want larger dwell-

ings. In all, “eight of 20 major industrial

sectors are now operating above their year-

ago levels,” writes Doug Porter, chief econ-

omist of bmo, a bank.

Growing confidence may explain why

the government felt bold enough to raise

its immigration target on October 30th by

17%. Next year it plans to invite more than

400,000 permanent residents, more than

1% of the population. The last time it wel-

comed that many immigrants was in 1913.

Despite this, most forecasts, including

those of the imfand the Bank of Canada,

show that Canada will return to its pre-

pandemic level of gdponly after the United

States does. The disparity between the la-

bour-market statistics and gdpmay reflect

the fact that unproductive jobs are being

propped up by government subsidies. In

September 1.7m employees, or about 8% of

Canada’s pre-pandemic labour force, were

benefiting from the Canada Emergency

Wage Subsidy programme, which contrib-

uted an average of more than C$1,000 per

employee to firms’ monthly payroll costs.

About a fifth of these workers are in the

troubled hospitality sector. Although the

United States also has a scheme to subsi-

dise payroll costs among small businesses,

its reach is narrower and it closed to new

applicants in August. Canada’s scheme is

being extended, with a smaller payout, un-

til next June. In this respect Canada looks

more like Europe, where job-support

schemes have obscured labour-market

weakness but not falls in output.

And the virus is again on the rise. As

provinces and cities reintroduce restric-

tions they are trying to minimise their eco-

nomic impact. That may be tricky. Winni-

peg, where the highest temperature on an

average day in January is -11°C (11°F), is

drawing up rules to allow pubs and restau-

rants to serve outdoors throughout the

winter. The uncertain path of the virus

could yet dash both economic and epide-

miological hopes, as it has elsewhere. But

among rich countries Canada has so far

performed well on both fronts. 7

W

hen youbehold the Lion of Judahyou

do not think “e-commerce”. Its lower

decks have hooks for 467 hammocks where

passengers sleep on the three-day voyage

up the Amazon river from Manaus, a city of

2m people, to Uarini, a manioc-growing

town. Its upper deck has more hammocks,

a bar for sinners and a chapel for saints. Its

cargo hold stinks of fish. But when the Am-

azon’s largest department store, Bemol,

started delivering to customers in the rain-

forest, three-decker passenger boats were

its chosen means of transport. 

Bemol was founded in 1942 by three

grandsons of a Moroccan Jewish immi-

grant who arrived in Brazil in 1887. It sold

fridges and televisions in the traditional

way from its megastores in Manaus until

2018, when one of the founders’ grandsons,

Denis Minev, took over. He suspected there

were hundreds of thousands of customers

up and down the Amazon and its tributar-

ies that Bemol wasn’t reaching and decided

to go to them.

But delivering parcels in the rainforest

is difficult and expensive. (Amazon the

company barely serves its namesake river.)

Consumers in far-flung places either had to

pay up to 30% of the product’s price for

shipping and wait a month or longer for the

postal service to deliver it or spend money

and time on shopping trips to Manaus. Mr

Minev made what sounded like an impos-

sible promise: to deliver an order placed

online within a week for not a centavomore

than the “Manaus price”. 

Bemol calls its answer to those pro-

blems cabocloe-commerce. A term for Bra-

zilians with both indigenous and European

ancestry, caboclohas come to mean a mix of

tradition and modernity. Mr Minev’s expe-

rience at a cooking-gas firm, also owned by

his family, showed him how challenging

the Amazon’s logistics could be. Rather

than buy a fleet of boats, risking collisions,

fuel theft and high debt, Mr Minev out-

sourced delivery to the brightly painted

ferries that carry people and provisions

around the region. 

As the Lion of Judahlay at anchor in the

port of Manaus on a recent Tuesday, deck-

hands stuffed its hold with hundreds of

cases of beer, thousands of cartons of eggs,

scores of frozen chickens and three

squawking ones. Alongside them were

near-identical mattresses, supplied by Be-

mol, to be left in different towns. Contracts

with boat owners are verbal, inventory is

recorded with pen and paper and mix-ups

happen. If merchandise goes missing—

smartphones can disappear—Bemol swal-

lows the loss. Just a few boats and their

crews serve each route. “If I fight with all of

them, there’s no one left to deliver our pro-

ducts,” says Fred Galvão, who runs logistics

for Bemol. 

To encourage Amazonians to place their

first online orders, Bemol installed Wi-Fi

in the plaza of every town where it

launched cabocloe-commerce. It set its cat-

alogue to pop up on users’ smartphones

and grants free minutes to those who place

orders. Like Amazon, Bemol sends custom-

ers adverts based on the data they provide. 

MANAUS

How e-commerce works in the

rainforest

Brazil

Bundles in the

jungle

The Amazon of the Amazon