Region Expert Brazil

Brazil Region Expert Project: 

Brazil Region Expert Project By Justin Spillers

Brazilian Overview : 

Brazilian Overview Largest country in South America Shares a border with every country except Chile and Ecuador South America’s leading economic power and region leader

Brazilian Overview (cont.): 

Brazilian Overview (cont.) Capital City: Brasilia Official Language: Portuguese Government: Republic Currency: Real Exchange Rate: 1 U.S. Dollar = 0.5587 Real Major Cities: Sao Paulo, Rio de Janeiro, Belo Horizonte, and Porto Alegre

Geographic Landscape The Positives : 

Geographic Landscape The Positives Approximately 8.5 million square miles in size. Mostly tropical climate, but temperate in the south.

Geographic Landscape The Positives: 

Geographic Landscape The Positives Terrain is mostly flat to rolling lowlands in the north, some mountainous regions, and narrow coastline. Large source of natural resources such as iron ore and oil.

Geographic Landscape (cont.): 

Geographic Landscape (cont.) Deforestation in the Amazon Basin is destroying habitats and endangering specific plants and animals. Air and Water pollution are threatening the environment around major cities. Oil spills and land degradation as a result of mining are a recurring problem.

Population: 

Population Population: 203,429,773 53% Caucasian 38.5% Mulatto 6.2% Black 1.3% Unspecified

Population Religious Structure: 

Population Religious Structure 73.6% Roman Catholic 15.4% Protestant 1.3% Spiritualist 0.3% Bantu/Vodoo 2% Other 7.4% None

Cultural Dynamics Hofstede Cultural Dimensions: 

Cultural Dynamics Hofstede Cultural Dimensions Uncertainty Avoidance: 76 Indicates a low societal tolerance for uncertainty and an aversion to change. This is compensated for by strict rules, laws, policies, and regulations.

Cultural Dynamics Hofstede Cultural Dimensions: 

Cultural Dynamics Hofstede Cultural Dimensions Individualism Ranking: 38 Higher than the Latin American average of 21. I nclination towards collectivism. Emphasizes long-term commitment to relationships. Loyalty is a major focus.

Cultural Dynamics Hofstede Cultural Dimensions: 

Cultural Dynamics Hofstede Cultural Dimensions Power Distance Index: 63 Shows an acceptance and expectance of power being distributed unequally.

Cultural Dynamics Hofstede Cultural Dimensions: 

Cultural Dynamics Hofstede Cultural Dimensions Masculinity Rank: 41 Shows a similar cultural attitude between men and women. Moderately assertive and competitive society.

Cultural Dynamics (cont.): 

Cultural Dynamics (cont.) Exploding Middle Class An estimated 35 million people joined the middle class between 2003 to 2009 . 20 million more are expected to join by 2014.

Cultural Dynamics (cont.): 

Cultural Dynamics (cont.) An estimated 87% of the population lives in an urban area. Urbanization is occurring at a rate of 1.1% per year.

Cultural Dynamics (cont.): 

Cultural Dynamics (cont.) Poverty remains a large concern. An estimated 15% of the population lives in poverty. A poor educational system is in need of improvements to help combat this problem.

Political Climate: 

Political Climate Government: Republic Current President: Dilma Rousseff President Rouseff elected in January of 2011 and is Brazil’s first female president.

Political Climate (cont.): 

Political Climate (cont.) Strong emphasis on sustained economic growth. Commitment to increasing trade in a global environment. Currently working to restructure the tax system to make it more conducive to growth. Solid macroeconomic policies.

Political Climate (cont.): 

Political Climate (cont.) Brazil’s public sector is considered its weakest point according to the World Economic Forum’s latest Global Competitiveness Report. In need of a renewed focus on infrastructure. (roads, railways, ports, etc…) In need of renewed focus on education.

Economic Climate: 

Economic Climate GDP: $2.172 trillion Estimated GDP Growth Rate: 7.5% Unemployment Rate: 6.7% Inflation: 6.5%

Economic Climate (cont.): 

Economic Climate (cont.) GDP Composition Breakdown Agriculture: 5.8 % (i.e. coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus, and beef) Industry: 26.8 % (i.e. textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircrafts, motor vehicles and parts, and machinery equipment) Service: 67.4%

Economic Climate (cont.): 

Economic Climate (cont.) Fitch Credit Rating: Triple B Moody’s Credit Rating: Baa3 Standard and Poor's recently lifted Brazil’s rating to positive from stable.

Business Climate Ease of Doing Business: 

Business Climate Ease of Doing Business Ranks 58 th in the world in Global Competitiveness, a report put out by the World Economic Forum. Ranks 120 th out of 183 countries in the “Doing Business” report issued by the World Bank.

Business Climate Ease of Doing Business: 

Business Climate Ease of Doing Business World Bank’s “Doing Business” report data: Starting a business requires 13 procedures. Average length of time is 119 days. Cost: 5.4% of income per capita

Business Climate Ease of Doing Business: 

Business Climate Ease of Doing Business Ease of Trading Across Borders Rank: 121 st out of 183 countries. They have made no efforts at reforming their import/export policies since 2010.

Business Climate Infrastructure: 

Business Climate Infrastructure Infrastructure is in need of improvement. (This is currently a priority in light of the World Cup in 2014 and the Olympics in 2016.) Roadways and railways are worn and in need of serious repairs. Waterways are frequented by pirates, which in turn increases the risk for importing and exporting goods. Telephone systems are strong. Cell phone networks are improving as large increases in consumer demand create a necessity for improvement.

Business Climate Steps Toward Improvement: 

Business Climate Steps Toward Improvement The average time it takes to prepare taxes for a mid-size business is 2,600 hours per year. Government officials are working to improve the current tax system to make it easier for businesses to understand. Government is working to move business-tax payment online.

Brazil-United States Relationship: 

Brazil-United States Relationship The United States and Brazil have maintained a positive economic, political, and social relationship for the last century. Relationship focuses on shared values and principles.

Brazil-United States Relationship: 

Brazil-United States Relationship Relationships between the two countries are forecasted to continue growing stronger through political partnerships to increase trade. Government organizations and private organizations such as the Brazil-U.S. Business Council continue to focus their efforts on promoting free flow of trade and investment between the two countries.

Future Business Forecast: 

Future Business Forecast Brazil’s future economic and business outlook has analysts split. Some believe Brazil will continue to grow its economy and increase its middle class. Others belie that Brazil’s economy is overheating and threatens to stall at the hands of a slow-to-react government.

Future Business Forecast Inflation: 

Future Business Forecast Inflation The largest problem currently facing Brazil is inflation. Inflation is at 6.5% and rising. The government has made feeble attempts at raising interest rates to slow down the increase. Tighter fiscal policies are needed to prevent short term economic troubles.

Future Business Forecast China: 

Future Business Forecast China China has recently taken a major interest in the Brazilian markets. China has surpassed the United States as Brazil’s largest and fastest growing trading partner. 2011 Exports to China: 15.3% of total exports. 2011 Exports to the United States: 9.6% of total exports.

Future Business Forecast Oil: 

Future Business Forecast Oil Brazil sits on the worlds most promising oil field yet to be tapped. Petrobras Oil has reached an agreement with Brazil for the sole rights to the newfound oil field. Oil field lies 190 miles off Brazil’s coast in the Atlantic Ocean.

Future Business Forecast Oil: 

Future Business Forecast Oil Petrobras has estimated oil production of 5 million barrels per day by 2020 . These forecasts could potentially catapult Brazil’s economy forward at an even faster rate. The outcome depends largely on the Brazilian government’s ability to create policies that allow for the reinvestment into infrastructure, education, and policies to streamline regulations.

Summary: 

Summary Brazil offers a fast growing economy and a promising investment for global companies wishing to expand their resources. The economy looks to continue its growth into the foreseeable future.

Summary: 

Summary Brazil’s government needs to refocus its attention on infrastructure, business friendly policy making, streamlining the tax code, and investing in education. China’s interest in Brazil should be closely watched to prevent the loss of the United State’s stake in the Brazilian import/export market. Specifically in the area of oil.

References: 

References Brazil-U.S. Business Council. http:///www.brazilcouncil.org . Retrieved November 29, 2011 South America::Brazil. The World Factbook. http:///cia.gov/library/publications/the-world-factbook . Retrieved November 10, 2011 Doing Business 2012. Economy Profile: Brazil . Retrieved November 27, 2011 Dom, Patti. Growing Middle Class Fuels Brazil’s Economy . www.cnbc.com/id/42785493 . Retrieved November 10, 2011

References: 

References The Economist. In Brazil’s Economy: The Devil in the Deep-Sea Oil. http:///www.economist.com/node/21536599/print . Retrieved November 10, 2011 The Economist. In Latin America’s Biggest Economy is More Fragile than it Appears . http:///www.economist.com/node/18774806/print . Retrieved November 10, 2011 The Economist. In Baby Steps . http:///economist.com/node/21529045/print . Retrieved November 11, 2011

References: 

References Moran, R. T., Harris, P. R., & Moran, S. V. (2007). Managing Cultural Differences (seventh ed.). Amsterdam: Elsevier Inc. Geert Hofstede Cultural Dimensions (n.d.). In ITIM International . Retrieved November 29, 2011 World Economic Forum. The Global Competitiveness Report 2010-2011. Retrieved November 10, 2011