Supermarkets with empty shelves, gas stations with no fuel, hospitals scrambling to feed patients, schools closed and an eerie silence in streets devoid of traffic.

This is not Caracas, but São Paulo, Rio de Janeiro and many other cities around Brazil, where striking truckers have brought the country of 200 million people to a halt.

“A politically weakened government that has not been able to respond complicates the situation,” said Roberto Padovani, an economist at Banco Votorantim. “The strike itself, with goods not being delivered, will have an impact on the economy, but the worst impact will come from loss of investor confidence during this tense time.”

José Augusto de Castro, president of the Brazilian exporters’ association AEB, said it was not possible to gauge losses right now. “Everything is stopped. Goods are not arriving at ports. We don’t know if cargo ships will just turn around and leave, as it may be cheaper to lose the fee than to wait around,” he said.

“For commodities producers, there will be some losses, but we lead the world in many products and importers will have to come back. The main problem is for manufacturing, where importers have other choices. This sector was already suffering with export values lower than where they were in 2007,” Castro said.

Pulp and paper producer Suzano and packaging maker Irani are just some of the companies that suspended operations citing the strike.

For Ana Carla Abrão, a partner at the consulting firm Oliver Wyman, the crisis was a long time coming. “Brazil’s reliance on roads makes no sense for a country this large,” Abrão said. “There is a component of policy and priorities, but also of the investment framework.”

Abrão calculated that infrastructure investments need to double in the next 20 years, “but it is clear the public sector cannot afford it. We need private sector investment, and for that we need a few changes to happen.”

For example, large infrastructure concession contracts, as they are structured now, provide more incentives for the construction phase than the operating phase, she said. “This is why we see a problem like Viracopos airport, with a built-in capacity larger than Frankfurt airport but operates at just 10% of passenger traffic.”

Brazil sits in 55th place in the World Bank’s Logistics Performance Index (LPI), according to a recent report from Oliver Wyman, lower than Mexico, Chile, India and South Africa, to cite a few

The current situation “impacts productivity and generates additional costs for multiple sectors,” Abrão said. “To revert this scenario, infrastructure investment needs to grow considerably above the current 2.2% of GDP. Maintenance alone requires 3.2% of GDP for the next 20 years.”

For Abrão, the opportunity for investors is enormous. “We need to double investments, so 2% of Brazil’s GDP, that is the size of the opportunity, but we need more instruments to allow for capital to be channeled towards infrastructure,” she said.

“Changing the interest rate used by BNDES and bringing it in line with market rates is important to reduce crowding out” and opens space for the “creation of new financial products that can channel funds into infrastructure,” Oliver Wyman said in the report.

For Abrão, “BNDES is in an identity crisis after the change.” Colombia’s model, where the development bank Financiera de Desarollo Nacional, or FDN, supports the development of capital markets, is part of the discussion on how to reinvent Brazil’s development bank, she said.

In the meantime, a cut in fuel taxes created a sinkhole in the government budget, and a 10% cut on diesel prices led Petrobras’ shares to fall 22% in the past week — and the state-owned energy company’s workers are threatening a strike of their own this week to protest the market pricing policy and asset sales.

The only thing to do right now, according to Castro, is to pray. In Mandarin. “Pray that China keeps buying our iron ore and our soy. Otherwise, we have nothing left.” LF