Brazil, Breaking Latin America Economic Mold
Rogelio Douglas - October 2009
For decades just about every business and economist writer could not write anything about the Latin America region without including a reminder of the risks in its poli-economic historical volatility. However recent indications are that the region is poised for a lengthy period of stable economic growth.
While today many countries around the world struggle to recover from an unprecedented recession Brazil’s economy, together with a handful of other emerging markets, had a relatively moderate slow-down and is still on track for an impressive GDP growth in the 5% range this year.
A rash of events over the past few years has placed Brazil on a sound footing for solid economic growth over the next decade or more. Among these are:
- Exceptional results from 3 decades of government efforts have turned Brazil in the largest producer / consumer of plant-based bio-fuels, effectively complementing their economic diversification in terms of sectors as well as geographical trading partners.
- Recent discovery of 5-to-8 billion barrels of light crude oil has brought Brazil reserves above that of Mexico, second only to Venezuela in the continent, where full scale production is expected by 2013.
- Hosting major national and international events such as the national elections in 2010, world cup soccer in 2014 and the Olympics in 2016, all of which are expected to stimulate significant investments.
- Major infrastructure investments are forecasted such as Anatel estimates $125Bn in telecom over 10 years, including several $100Ms national and local broadband networks; $39Bn in several improvement and new rail projects; $1.5Bn in airport projects.
This long term positive outlook for the region is substantiated in part by a rash of recent investment announcements and M&A by multinationals such as BG Group, HP, Avaya, Microsoft, Xerox, Telefonica of Spain.
As the economic power-house of the continent Brazil’s bright economic future is bound to have a significant tail-coat pull of their trading partners in the region. No question the number one risk lies in the governments’ ability to produce sufficient educational and middle income employment opportunities for the general populace.
However, there are so many major variables moving in the same positive direction it’s not difficult to imagine the region consistently gaining a much stronger economic stature on the global market.
Source:
http://www.gbdusa.net
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