Emerging Markets: Brazil

Emerging Markets: Brazil

Brazil has always captivated individuals with its magnificent beaches, colorful surroundings, and vacationing hotspots. However, the largest nation in South America is growing to become more than a picturesque vacation spot for businessmen and entrepreneurs; it is becoming one of the most prominent emerging markets globally.

Brazil has all the inherent qualities required to become a top-tier economy and business market. It is vast in size, being one of the largest nations in the world. This provides the economy great benefits, as more land can lead to: more arable land for agriculture, room to expand for construction and development projects and urban sprawl. Further, there is a significant native population. This provides easy access to an expanding workforce, promoting greater economic growth. All the prerequisites for continued growth are easily obtained for the growth of an emerging market.

Growth

This growth has already demonstrated great strides in recent years. The emergence of the Brazilian energy sector has led to massive economic gains, similar to the effects seen in the Russian economy. Studies suggest that Brazil will become one of the five largest business markets in the world within the next decade.

Brazil’s access to fresh water may be the next boom to its economy. The nation possesses the largest reserve of fresh water in the world. No matter your personal opinions on climate change, there is no doubt that fresh water is becoming scarcer globally, leading to greater demand. The access to this valued natural resource will be a key asset in future investment opportunities.

Political Change

Political change is also seen as a sign of greater opportunity within the country. For decades, Brazil has been stunted by high tax rates, as well as by complicated and restricting government interference and licensing policies. These restrictions resulted in many Brazilians to go unlicensed, operating business activities in black and grey markets. Recent reforms, however, have emerged to remedy this limitation. A simplification of the tax code and licensing processes are in progress to promote the growth of legitimate business operations. Legitimatisation will display the true potential within the Latin American nation, making foreign investment more viable.

Sporting boost for Infrastructure

Infrastructure, like taxing and licensing policies, was once one of the blemishes on the Brazilian market. No economy will function at its highest capacity if poor infrastructure, such as bad roads, insufficient sea ports, or lack of technology, exists. These deficiencies create inefficiencies at the various stages of production. For all of the natural gifts such as great tracts of land and a significant population, Brazil could not take full advantage due to poor transportation systems. Many roads are unpaved, and some markets are only accessible by water or on foot.

However, recent sporting successes have arisen that will assist in promoting infrastructure advances. The nation has recently won the rights to host both the 2014 FIFA World Cup and the 2016 Olympics. To secure these sporting contests on Brazilian soil, the campaigns promised the development and operation of more efficient transportation and systems. Brazil has spent much of its new wealth improving infrastructure hoping that it will facilitate further business growth. The most important of such projects is the “Growth Acceleration Plan” (known by its Portuguese acronym PAC), orchestrated by Dilma Rousseff prior to her ascendency to the presidential office. Not only will these advances enable a better experience for the sporting competitions in the short term, but these developments will increase the capacity for the long term economy.

Conclusion

Brazil has come a long way since its days when it was the nation that held the reputation as the home to the Western Hemisphere’s lowest GDP per capita. Prudent political leadership and savvy economic initiatives have culminated in rapid growth, declining poverty, and an increased role in the area of international politics. Brazil is not only an emerging market; it is becoming a market all prudent corporations need to become active in and provides a fantastic opportunity for Senior Executives to become a part of the blossoming business community.

 

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About the author

Jamie McDermott

Involved in Business Development and Technologies at Career Intelligence. Based in the Fleet Street, London office since the start of 2014.

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