Brazil: Rising to the Challenge

18.11.2009 By: Transfer based on The Economist

Brazil’s arrival onto the world stage was symbolically marked last month by the award of the 2016 Olympics to Rio de Janeiro and the good news that it will host the football’s World Cup in 2014. Brazil has been shown its strength and flexibility during the recession: after a late downturn it came out quickly and is growing again at an annual rate of 5%. With big new deep-sea oilfields being explored and ready to be expanded, the country can secure its place on the world market. With these statistics the country proves to be truly part of those emerging titans called BRIC (Brazil, Russia, India and China) and should be taken serious, despite of its image of chronic political instability.

One should rather focus on Brazil’s attraction as a democracy without significant internal conflicts and with a governmental focus on reducing searing inequalities. Or take into account the positive side effects of the friendly relations it maintains with their neighbouring countries. Besides that, Brazil’s export offer can be called versatile and in general foreign investors are being treated with respect. In combination with a smart social policy and boosting consumption on the home markets, Brazil can take the role as an example, not only for the emerging markets, but for the world in general.

Experts call Brazil’s emergence which started almost twenty years ago, a steady one. After having put a force on making economic policies controllable and accessible, the door to foreign trade and investment was opened. Privatizing state industries like oil, mining, aircraft, steel and meat, gave companies like Petrobas, Vale, Embraer, Gerdau and JBS the possibility to grow and become the multinational they are today. But also smaller companies are prosperous these days with an ever growing lower-middle class.
If Brazil succeeds in managing its government expenses successfully and more efficiently and focuses more on education, infrastructure and fighting crime in the big cities, the country is expected to become the fifth economy of the world within the next two decades.