The election of a new Brazilian president, Jair Bolsonaro, in October, has not only signaled a sweeping political change in South America’s largest nation, it is expected to halt the country’s further slide into a morass that has taken a financial, partisan and ideological toll on many Brazilians in just the past few years.
Rather than drive the country to a new low, like Venezuela, he is seen as a tough, but an aggressive leader who will establish a new cycle of economic growth, with sustainable bases of monetary stability.
In other words, Brazil is open for business again, and nations like the United States are welcome to come on back.
A recent survey was conducted by one of the world’s most respected consulting firms asking 100 Brazilian companies with a value of more than $800 billion – or about 43% of Brazil’s GDP – for their expectations for the new year of 2019. Their responses offered some highly interesting data on both sides of the political divide.
These companies expect the government to take or lead the following actions:
- 93% hope the new leader will initiate major tax reform;
- 90% want pension reform;
- 80% are promoting political reform;
- 62% anticipate he will strengthen the fight against corruption;
- 61% favor the government promoting fiscal adjustment of public accounts;
- 80% are looking for job creation incentives;
- 58% encourage the president to keep inflation below 5%;
- 53% want Brazil to increase its participation in foreign trade;
- 52% favor a broadening and enhancement of public-private partnership programs;
- 51% urge an increase in the supply of credit to private companies;
- 51% want to streamline the processes to improve the opening and closing of companies;
- 48% suggest creating more incentives for research and preparation for companies;
- 84% feel education is a priority;
- 77% want the government to take actions to improve public safety;
- 65% want the government to take actions that improve health;
On the other hand, these firms urge the government to be smaller and decrease its participation in the following areas:
- 73% in the area of banking services;
- 71% in the steel industry;
- 69% in communications;
- 60% in electrical energy;
- 59% in mineral exploration;
- 58% in oil and gas.
Most importantly, 94% believe that the government will give a total or partial priority to the expectations of the business sector.
In consequence:
- 97% of companies will make some kind of investment;
- 60% will launch new products;
- 59% will adopt new technologies;
- 49% will maintain training and employee training initiatives;
- 30% will buy new machines;
- 70% will capture new resources;
- 47% will increase the number of employees;
- 46% will implant more qualified employees as a result of robotization.
With regard to business expectations:
- 69% feel that sales will increase;
- 43% say investments in equipment will increase;
- 53% suggest that investments in training and qualification will increase;
- 49% feel the investment in research and development will increase.
Actually, based on these ideas and expectations, American-based companies, or U.S. firms with a branch in Brazil, have a prodigious opportunity to expand and create new prospects in their businesses.