BRAZIL’S COMING OF AGE
Posted by Nadiva Olivier on January 2, 2008
2008 starts in a very good shape for Brazil. Los Angeles Times (Dec 31st, 2007) changed their mind about Brazil being the “country of the future”, with its article “Brazilian economy is finally coming of age”, by Chris Kraul. “Brazil Leads Way in the Americas” is another article on the same subject, dated Jan 2nd, 2008, where Antonio Regalado (The Wall Street Journal) makes evaluations and comparisons on Brazil and other Latin America countries.
Some points they outline must be listed for a more clear vision on the subject:
– Brazil Economic growth will come in at 5.3 percent for 2007, lower than the hemisphere’s 5.7 percent, but quite a feat for a country that over the previous 10 years averaged only 2.5 percent annual expansion.
– Geoffrey Dennis, an analyst at Citigroup Global Markets, says investors are putting money into Mexico as they take profits in Brazil, but in 2008, “he sees shares again advancing strongly in Brazil and Peru, and he has a neutral rating on Mexico.”
– Petrobras announced it had discovered what may be the world’s largest oil find in 25 years in Brazil’s offshore Tupi field. Tupi could propel Brazil into the ranks of significant oil exporters.
The good scenario is not exactly a coming of age, however. This country did not have a rite of passage that could justify that. It lacks a lot of decisions and actions concerning infrastructure, education and so on. Business community has to deal daily with the perspective of lack of energy, lack of logistic support and other old problems like workers’ policies, law profile on education, etc.
If there is not a rite of passage, so how could we come to this point? To be in the great world investors flows is one of the factors to be considered. Others factors were already commented in last post – good people, that deals gracefull to the lack of a lot of important things and succeed, huge stock of resources and a strong demand for a lot of things. Brazilians are not that big as China or India consumers (both over 1 billion people) but most of Brazilians are “real consumers”. They are hungry for any innovation they can afford. And banks, oh! They are so happy offering credit down here and profiting a lot with the highest interest rates in the world.
Conclusion: a country to be evaluated with enthusiasm in 2008.