By Carlo Barbieri
In a world beset by financial strife and uncertainty about the future, Brazil has a lot to offer. Here are just a few bullet points:
- Brazil is among the largest countries in terms of territory, population and GDP ($2.475 billion for 2011 in US dollars.)
- Brazil has vast natural resources, including recently discovered large offshore oil fields, a diverse industrial base, a dynamic and sophisticated private sector and a well-structured public sector;
- Brazil is a vigorous democracy, with free multiparty elections and a stable political system;
- Brazil has good relations with all its neighbors and has invigorated its ties with all regions of the world.
Its economy is the largest among Latin American nations and the second largest in the western hemisphere. Brazil is one of the fastest-growing major economies in the world with an average annual GDP growth rate of over 5 percent.
But there is also cause for concern – particularly as the world deals with a continuing economic crisis. American millionaire real estate investor Sam Zell said Brazil still has opportunities for investment, especially in sectors linked to consumption.
“The question is whether this slowdown is over or not,” said Zell. “There are different opinions about it, but in general, foreign investors view Brazil and other emerging markets with caution. Today, emerging economies face many obstacles, a lot of resistance.” Yet, he said, the demand for housing is strong, and even the hotel market is “very promising.”
Actually, Brazil set its course for stability in the early 1990s when a presidential impeachment in 1992 following by a weak administration led by the former vice president allowed rampant inflation to continue. Through the 1990s and into the 21st century, the nation’s economy has grown, though lately, it hasn’t quite kept up with estimates. The FOCUS report says that growth of Brazil’s gross product was estimated to increase 4.5 percent in 2012, yet the figure is more like 1.9 percent. Still, this is good, considering the struggling international economical situation.
Brazil maintains financial diversity with membership in a mix of economic organizations such as Mercosul, Unasul, G8+5, G20,WTO, and the Cairns Group. Its trade partners number in the hundreds, and 60 percent of its exports are manufactured or semi-manufactured goods.
Brazil’s main trade partners in 2008 were: Mercosul and Latin America (25.9 percent of trade), EU (23.4 percent), Asia (18.9 percent), the United States (14.0 percent), and others (17.8 percent).
Important steps have been taken since the 1990s to bring about fiscal sustainability and to liberalize and open the economy. These have significantly boosted the country’s competitiveness fundamentals, providing a better environment for private-sector development.
The owner of a sophisticated technological sector, Brazil develops projects that range from submarines to aircraft and is involved in space research. The country possesses a satellite launching center and was the only nation in the Southern Hemisphere to integrate the team responsible for the construction of the International Space Station (ISS). It is also a pioneer in many fields, including ethanol production.
According to government statistics, Brazil was the first capitalist country to bring together the 10 largest car assembly companies inside its national territory. The annual Brasil Investment Summit takes place in São Paulo and is the largest gathering in Brazil of international investment experts covering opportunities in alternative vehicles, infrastructure, and advanced trading strategies. Brazil is also a pioneer in the fields of deep water oil research from where 73 percent of its reserves are extracted.
With still high levels of inequality, though it has diminished in the last years, the Brazilian economy has become one of the major economies of the world. According to Forbes 2011, Brazil has the 8th largest number of billionaires in the world, a number much larger than what is found in other Latin American countries, and even ahead of Japan. By the end of 2011, Brazil’s economy had become the world’s sixth-largest.