Wednesday, August 25, 2010

Brazil, Country of the Future?

Interesting what the internet archives for you. Here is a BBC Article from April 2000 - so much has happened in the past 10 years... and yet there is so much to do.

"Generations of Brazilians have long been taught that they lived in 'the country of the future'.
With its vast territory, natural resources and economic potential, its people were led to believe that Brazil had a guaranteed place as one of the world's leading countries." (
Continue reading here.

Thursday, August 12, 2010

Brazil, to be or not to be.

What I like about the Pearson Publishers, is that they actually manage to have clear, critical and sometimes even contradicting opinions if you look at their two flagship publications, the FT and The Economist.

If we look at a recent The Economist article first, called "Four Reasons to Believe in Brazil", from July, the outlook is outright positive. The highlights are commodities and the global commodity hunger, the second oil (actually also a commodity, but the focus here is on self-subsistency and strategic importance in an increasingly energy-hungry world), demography (i.e. a major amount of people joining the work force and slower birth rates kicking in meaning infrastructure is set for the kids there and more people there to pay for it), and urbanisation, where wages usually are higher and access to education, infrastructure, etc. are much better.

Mr. Wolf from the FT takes on a much more pessimistic view in his June article "Why Brazil must try harder". Commodities also plays a significant role here, but with a highlight that while exports in Brazil have increased, the share of manufactured goods still remains low. This is similar to what I recently heard from a presentation of the Trade Ministry at the São Paulo Chamber of Business. The share of commodities in exports has actually increased. All of this still leaves Brazil at a lower development level, as industry development is not significantly challenged if all you have to do is dig out the stuff and ship it to China.

Most interesting, however, is Mr. Wolf's comparison of Brazil to two other BRICs, China and India. Brazil has lower ratios of trade, savings, exchange-rate ratios and population, and lower growth, meaning that while Brazil may have gained in the world, it has fallen behind China and India in world power over the past decades.

I believe it is exagerated to say, that this means that Brazil will not be of any significance in the future, but Mr. Wolf does have a point - especially if we consider the massive infrastructure needs the country has and the low level of savings, there is something Brazil must do, to catch up.