When we think of South America one of the first things that jumps into your mind is the largest country, Brazil. Known for its diverse culture and of course the Amazon rainforest, Brazil is truly a spectacular county in terms of social contrasts and size. But with all this beauty and size, Brazil is still considered to be a developing nation. This Latin American powerhouse is home to one of world’s best emerging economies. Many foreign companies have moved into the Brazilian market due to the commodities boom and with thirteenth largest city in the country the growth prospect for companies are endless. With a growth rate of 1.1% back in 2018, Brazil was now in the top 10 in terms of a global economy. But with this achievement, the struggles for Brazil continues to affect their growth.
But with this growth rate Brazil’s economy remains underdeveloped. Brazil is now focused on some of their stronger businesses while channeling some of that energy to other business sectors. Brazil over the years focused on their agriculture production and the exporting of commodities. Brazil is ranked as the twenty-first largest export economy in the world. This trend if continued will have a positive effect on the Brazil’s continued development.
However, for this powerhouse of Latin America to continue grow and become more stable, government must invest in their technology infrastructure. To combat this issue, many start-up companies and larger tech companies, such as Microsoft have committed to change the outline of Brazil’s technology base. These companies have integrated system to improve in the areas of managing resources and the improvement of emergency service coverages. As such, these tech companies have realized that Big data, security surveillance and risk have been an underutilized component of Brazils technology infrastructure. Companies are now focused on adding additional resources to the capital markets to continue to expand in these areas of interest.
The growth of the technology sector has proved positive for the labor force. On average, the unemployment rate of 12% has been slowly diminishing over the years. One of the major causes for the drop in unemployment is due to the strong labor unions. Labor unions have been one of the main driving forces in the labor market. However, foreign companies remain hesitant to work Brazil’s union workers due to their complex labor laws. Thus, these complex laws have the tech growth that was once sought after by Brazil.
With these sectors of the economy still emerging, Brazil is still searching for other industries to increase their growth. Earlier we spoke about the abundance of natural resources and the affect that commodities have on their economy. Brazil is the world’s leading producer of soybean, coffee, cocoa, and sugar. Additionally, Brazil is one of the few countries that is responsible for their own oil production. Manufacturing is another area of interest and is the second largest contributor to Brazil’s growing economy. Brazil’s diversified nature has allowed them to excel in production such good as aircraft, chemicals for food products and clothing. Finally, we come to the services industry which is responsible for the largest employment sector in Brazil. Professional services such as financial services, hospitality, retail, and professional services.
So where does this leave Brazil? If Brazil can continue to grow these industries, it would not be unlikely for Brazil to emerge into one of the top five powerhouse countries. But is this an achievable goal? Brazil still suffers from a large disparity between the rich and the poor. As such, Brazil must incorporate innovative social programs to close the income disparity that the Brazilian population is facing. Brazil must also continue to grow their middle class by promoting education and strengthen their technology sector. These changes if implemented correctly could catapult the Brazilian economy and contribute to the Brazil being the premier powerhouse country in South America.
References:
Cattlin, Becca. 25, April 2019. Emerging market economics: Brazil. Retrieved from
https://www.ig.com/uk/trading-strategies/emerging-market-economies–brazil-181010
Deloitte. Business Structure in Brazil. Retrieved from https://www2.deloitte.com/br/en/pages/doing-business-brazil/articles/business-structure-brazil.html
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). In Managing cultural differences (9th ed., pp. 140-169). Routledge.
Sottovia, M. 19, March 2018. Retrieved from: https://www.tmf-group.com/en/news-insights/articles/top-challenges/doing-business-in-brazil/
Transportuguese. Brazilian Economy. Retrieved from http://www.transportuguese.com/en/brazilian-economy.html
Hello,
I agree that Brazil is becoming a powerhouse, and still has lots of room to grow. I work for a company that has some facilities in Brazil, and some of my best friends and coworkers have come to the U.S. from Brazil. It is very interesting getting to know their backgrounds and learning more about the country and politics. I think that my Brazilian friends are easier for me to relate to than any of my other coworkers that have transferred to the U.S. It seems like we have very similar core values and life goals. They also have a good sense of humor and like to have some fun at work.
The biggest hurdle that I have when working with projects in Brazil is the inconsistency of taxes on importing industrial equipment. No matter what I budget, it is always higher than calculated by the freight company. Then once paid, the product still takes a long time to clear customs. Seems that importing things takes some time, but after we get through the port, everything is smooth.
It will be very interesting to see how Brazil evolves as the world continues to get smaller. There is a huge amount of potential there.
Great post…
Douglas