...Brazil’s future Has Brazil blown it? Four years ago the Brazil economy was rocketing which barely stumbled after the Lehman collapse in 2008 and in 2010 grew by 7.5%, its strongest performance in a quarter-century. The progress has however reduced and hundreds of thousands took to the streets in June in the biggest protests for a generation, complaining of high living costs, poor public services and the greed and corruption of politicians. Brazil has done far too little to reform its government in the boom years. Brazil’s public sector imposes a particularly heavy burden on its private sector. Companies face the world’s most burdensome tax code, payroll taxes add 58% to salaries and the government has got its spending priorities upside down. Considering the pension, the average Brazilian can look forward to a pension of 70% of final pay at 54. Despite being a young country, Brazil spends as big a share of national income on pensions. It spends just 1.5% of GDP on infrastructure, compared with a global average of 3.8%, even though its stock of infrastructure is valued at just 16% of GDP, compared with 71% in other big economies. Dilma Rousseff, the President of Brazil, has scared investors away from infrastructure projects and undermined Brazil’s hard-won reputation for macroeconomic rectitude by publicly chivvying the Central Bank chief into slashing interest rates. The good part of economy is because of the efficient and entrepreneurial farmers, the world’s third-biggest...
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...expert advice to attain business success in that market. CONTENTS- 1. Introduction. 2. View of Brazil’s economy. 3. Brazil as a BRICS Economy. 4. Market for smart phones in Brazil. 5. Using the porter’s five forces to analyse the market for smart phones in Brazil. 6. Competitors existing in the market. 7. How to enter the market. 8. Constraints to success for the company (using PESTLE model). 9. How to achieve a sustainable competitive advantage. 1. INTRODUCTION The Cost (this involves the legal cost, corruption, lack of infrastructure), Benefits (size of the economy or economy growth),Risk (political-social unrest, economic mis-management) analysis has been used to analyse the favourable emerging market in Latin America which is Brazil. The main reasons for choosing this market will discussed in details. 2. OVERVIEW OF BRAZIL’S ECONOMY The chosen market is BRAZIL which is an emerging market and also the largest of the Latin American nations and the second largest in the western hemisphere with an average annual GDP growth rate of over 5%. In one of my findings, Brazil is expected to become one of the five largest economies in the world in future. As at 2011 according to Forbes, “Brazil was ranked the 8th largest number of billionaires in the world”. Brazil is the sixth largest economy by nominal GDP in the world and also ranked 10th ease of doing business rank, with a population of...
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...According to Al Jazeera English’s video, Brazil’s booming economy July 9, 2008, Brazil is reported as a sleeping giant and a powerhouse. Brazil was also recognized as having one of the fastest growing economies in Latin America based on its strengths of steady gains of investments in the country’s stock market. In 2008, Brazil’s stock market grew 10% within a matter of months. Furthermore, Brazil experienced a vigorous economic growth by far outpacing competitors in expanding their agricultural, mining and manufacturing products. They also enjoy a stable political system and an enormous amount of people available to work in their different areas of growth. According to Al Jazeera English’s video, “Highs and lows of Brazil’s economic boom” of September 30, 2007, Brazil struggled with some of the same weaknesses of other countries. Although a powerhouse within the world’s economic market, there is still a lot of work to be done within Brazil. Many of Brazil’s poverty stricken or low-income families and communities do not get to enjoy the country’s growth. Some of these families and communities live below the poverty line and simply don’t have the money to invest in the stock market. Additionally, there are even Brazilian families that do live above the poverty line but don’t earn sufficient wages to participate in the stock market because the average income in Brazil does not keep the pace that is required to meet the country’s everyday standards of living. ...
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...evaluate all the parameters. Why Brazil and India? Brazil and India are one of the fastest growing economies in the world. They are now on the heat map for the investors. Also they are now making its mark in the world politically as well as financially. They are a part of BRIC which is one of the most powerful associations. Hence we selected Brazil and India for comparative study. Objective of Study The objective of our study is to look at various factors which an Investor looks at before investing in a country. Here we have analysed specific sectors and the problems in these countries. Structural Issues in Brazil: Since the mid 1990s, Brazil has enjoyed improved economic and financial stability largely owing to a strengthening of its macroeconomic framework. In order to quickly catch up with other countries, sustainable growth is required. To obtain this Brazil has to identify and deal with the structural problems it faces. Structural Issues Basic Logistic Infrastructure Competitive advantages in the modern world do not only depend on the supply of assets accumulated in the past via public and private investments. They also depend on the efficiency with which the new investments contribute to the rise of the average productivity of the economy. The necessity of their continuity, the performance of regulating agencies in the areas of oil, electric energy, telecommunications, carriers, water, and ports is of greater importance in Brazil. The Human...
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...Brazil versus China: A comparative study of their relative attractiveness as destinations for multinational firm´s Table of Contents Pg. 1.0 EXECUTIVE SUMMARY 4 2.0 INTRODUCTION 4 2.1 History of Economy in Brazil 5 2.2 History of Economy in China 6 3.0 COUNTRY RISK 7 3.1China Country Risk 7 3.2 Brazil Country Risk 8 3.2.1. Current Political Issues in Brazil 3.3 Risk factors analysis comparison and Key reasons to consider 9 3.4. Current Issues in China 10 3.4.1. Fiscal policy 10 3.4.2. Monetary policy 10 3.4.3. External sector 10 3.4.4. General Political Environment 11 3.4.5. Investment Environment 11 3.4.6. Political Violence 12 3.4.7. China Political Outlook 12 3.5. Current Issues in Brazil 12 3.5.1. Real Sector 12 3.5.2. Monetary 13 3.5.3. External Sector 13 3.5.4. Fiscal 13 3.5.5. Outlook 13 3.5.6. General Political Environment 14 3.5.7. Investment Environment 14 3.5.8. Political Violence 14 3.5.9. Brazil Political Outlook 15 3.6 China Corporate Governance Law 15 3.7 Brazil Corporate Governance Law 16 4.0 FOREIGN EXCHANGE RISK 17 4.1 Brazil Foreign Exchange Risk 17 4.2China Foreign Exchange Risk 18 5.0 EXPANDED OPPORTUNITY...
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...Current Currency Crisis in Brazil Brazil has had a successful and pleasing economic consistency streak for the past twenty-five years, and now its economy is facing arguably the worst recession in 25 years. The current currency crisis in Brazil is believed to come from an embezzlement scheme of an oil company that The President of Brazil, Dilma Rousseff, endorsed. The whole issue was centered on corruption and illegal deals that the government of Brazil used to acquire an oil company in South America, Petroleo Brasileiro. The estimated value of the embezzlement scheme was about $2.1 billion. The amount involved in the deals was too much for the economy of Brazil. The deal and corruption involving the $2.1 billion caused a plunged inflation that is rising. The inflation could be a serious one since the amount of money that was embezzled affected the balance of the economy in the following ways: First Brazil raised the tax on financial firms. The government implemented a tax policy that saw financial firms paying more tax that before. The tax, known as the CSLL rose from 15% to 20%. The strategy was to boost the deteriorating economy through boosting the country's annual earnings while it cuts its budget debts and recover from increasing inflation (Jelmayer, 2015). According to Biller (2015), the currency in Brazil has fallen about 60% since the election of Dilma Rousseff as The President. The economy of Brazil remained stagnant from 2011 to 2014, and the Central Bank expects...
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...Executive Summary Brazil is Latin Americas largest economy and since the 1990’s has shown steady economic reforms. These reforms were necessary as Brazil suffered years of hyperinflation as high as 1000% and deficit spending. The government decided to pursue economic policies that changed the Brazilian economy into a dynamic market based system. Some of the key policy changes made were the privatization, of state owned enterprises, deregulation that allowed for greater domestic and foreign competition, perusing regional and multinational free trade agreements and the removal of red tape associated with foreign investment. The mainstay of all these reforms was the Plano Real (Real Plan). This real plan involved the scrapping of the old currency, the cruzeiro and replacing it with a brand new currency the real. The plan was to drive out inflation by adhering to strict monetary policies. The government decided to peg the real to the United States (U.S.) dollar and not allow it to depreciate more than 7.5 % against the US dollar per year. The government also increased the interest rates repeatedly to maintain the value of the real against the dollar. The economic reforms in Brazil were fairly successful, the country saw the inflation rate drop to 2% by 1998 and the economy grew by 3 to 4% annually as well as foreign investment soaring to $ 22 billion in 1998, but not all was well. Brazil was facing a huge trade deficit due to an overvalued real. There were also huge budget deficits...
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...oing Business in Brazil * Market Overview * Market Challenges * Market Opportunities * Market Entry Strategy Market Overview The Federative Republic of Brazil is Latin America's biggest economy and is the fifth largest country in the world in terms of land mass and population with about 192 million people. Brazil’s economy, the 6th largest in the world, grew 2.7% in 2011. Growth slowed due to reduced demand for Brazilian exports in Europe and Asia, despite solid domestic demand and a growing middle class. During the past decade, the country has maintained macroeconomic policies that controlled inflation and promoted economic growth. Inflation was at 6.5% in 2011, and urban unemployment reached a historic low of 6.0%. Interest rates, though high compared to the rest of the world, remained historically low at the Central Bank benchmark rate of 8.0% as of July 2012. In 2011, the U.S. was Brazil’s largest source of imports followed by China, Argentina, Germany, and South Korea. U.S. merchandise exports to Brazil in 2011 were US$42.9 billion, and U.S. imports from Brazil were US$31.3 billion. Market Challenges Brazil has a large and diversified economy that offers U.S. companies many opportunities to export their goods and services, and U.S. exports are increasing rapidly. Doing business in Brazil requires intimate knowledge of the local environment, including both the explicit as well as implicit costs of doing business (referred to as the “Custo Brasil”)...
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...you are Joan Beal. Prepare a list of all the options, and give the advantages and disadvantages of each. It appears The McGrew Company has been utilizing the indirect exporting phase as its primary business model in Brazil. Rather than simply exporting its products to Brazilian distributers and selling it for a markup, McGrew could exercise different options. OPTIONS * Direct Exporting Direct exporting would allow for The McGrew Company to handle its own sales and marketing within the country of Brazil. This would enable manufacturing to continue to in its current location while also cutting mark-up costs from the local distributors. Employees within the current manufacturing location may handle the documentation such as billing, shipping, and other activities while a team in Brazil will work in a local parent-type company. This local Brazilian company will perform as a distributor however it will be owned and operated by the manufacture directly. By working this option you allow for the opportunity to cut cost without moving your manufacturing capital to a foreign country. * Turnkey Project This opportunity is facilitated by a contractor who will basically build a business from the ground up within the country of choice, in this case, Brazil. The name Turnkey project is taken literally in that the materials, equipment, land, building and personnel are put into place and the company begins operations before it is turned over to the main company. The McGrew business...
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...1. Introduction The purpose of this paper is to analyse the impact of an increase in world’s interest rates in the Brazilan economy. Furthermore the macro exposure of Grendene, a Brazilian shoe manufacturer will be analysed. Grendene’s vulnerability and market exposure will also be accessed. Moreover the level of protection of the company will be approached. 2. Macro effects of an increase in world interest rate on the Brazilian economy Brazil is one of the fastest growing countires in the world and is part of the so called BRIC economies (Brazil, Russia, India and China). Currently the Brasilian Central Bank basis rate SELIC (Brazilian Central Bank’s rate for overnight lending) is at 8,50% p.a. (COPOM - Committee of Monetary Policy). Even if this rate is low compared to historical rates (Figure 1) it continues to be one of the highest interest rates in the world, atracting a high flow of international investments. Due to the large capital inflows, the Brazilian Real has appreciated in the last years diminishing the competitiveness of Brazilian products in the world market. Since 2009, Brazil has experienced high capital inflows mainly due to abundant global liquidity and high interest rates compared to developed countries (OECD, 2011). [pic] Figure 1: Historical interest rates in Brazil (Source: Banco Central do Brasil) In a general point of view, an increase in interest rates will cause a decrease in aggregate demand...
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...Introduction Brazil is the economic leader in South America. It is located in eastern South America bordering the Atlantic Ocean. Almost 85% of South American countries border Brazil. Most of the country is located below the equator and it has a total area of 8,511,965 square kilometers (Brazil Facts) making it the fifth largest country in the world behind the U.S. Brazil has a distinctive topography, in the north and west you can find the Amazon Basin with tropical-like weathers. Brazil is also facing deforestation losing about 52,000 square miles of amazon each year. In the south east of the country you will find its highlands and plateaus. Brazil also has a distinctive climate. The climate is generally classified into five subtypes: equatorial, tropical, semiarid, highland tropical and subtropical but 90% of the country is mostly considered tropical. (Climates of Brazil) Social Economic and Cultural Factors As for being the fifth largest country in the world land wise, Brazil is also the fifth largest country when it comes to population. According to the CIA Brazil’s population in 2012 was over two hundred million. 26.2% of the population in 2011 is between 0-14 years of age, 67% of the population in 2011 is between 15-64 years of age, and 6.7% of the population in 2011 is 65+ years of age.(CIA Fact book) Because Brazil was colonized by the Portuguese the primary language in this country is surprisingly Portuguese! Other slightly common languages you might also hear are...
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...BRIC: Currency Depreciation in Russia and Brazil ◎D0131160 Irina Chen ◎D0131187 Gloria Chang ◎D0173297 Sunny Chiu ◎D0173270 Doris Chen ◎D0173670 Athena Du Contents Abstract ..................................................................................... 2 Brazil ......................................................................................... 3 Why Brazil become the BRIC ................................................... 3 What was behind Brazil’s Depreciation? ................................. 8 Russia ...................................................................................... 13 Why Russia become the BRIC?.............................................. 13 What was behind the Ruble depreciation? ........................... 19 Comparison and Similarities between Russia and Brazil ....... 24 In the Future ........................................................................... 25 The Future of Brazil ............................................................... 25 The future of Russia .............................................................. 25 Conclusion ............................................................................... 26 Contributor ............................................................................. 27 Reference ................................................................................ 27 1 Abstract The BRIC is the acronym of four nations, including Brazil, Russia, India and China. The conception of...
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...GLOBAL AND BUSINESS PRACTICES- BUSA 3000 DR. ILKE KARDES APRIL 23, 2015 1. Country Background Brazil is a country located in eastern South America, with a territorial size of 8,514,877 sq. km (square kilometers) and shares its borders with 10 other South American nations. These nations are; Argentina, Bolivia, Colombia, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay, and Venezuela. Brazil has a national GDP of 2.246 trillion USD (2013), a GNI of 2.956 trillion USD (2013), a population of 200.4 million people (2013), which makes the country’s GDP Per Capita 11,208.08 USD and its GNI Per Capita 14,750 PPP USD (2013). Brazil’s national currency is the Brazilian Real (R$), trades 2.97 R$ to 1USD, and exchanged openly on the Forex market. Brazil is a country rich with natural resources. These natural resources include, Timber, sugar, coffee beans, quartz, diamonds, chromium, iron ore, phosphates, petroleum, mica, graphite, titanium, copper, gold, oil, bauxite, zinc, tin, and mercury. Brazil is also a member of several economic organizations, including Unasul, WTO, Mercosul, G-20 and the Cairns Group. Brazil has hundreds of trading partners, with 60 percent of its total exports made up of manufactured and semi manufactured goods. Mercosul, an economic and political agreement that includes Argentina, Paraguay, Uraguay and Brazil, encourages free trade and easy transit of goods, people and currency. In 2008, Mercosul signed a free...
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...the South American continent and strongly influences the attraction of foreign investment. It is the fifth largest country on the planet, with a population of 180 million inhabitants, responsible for a very promising, predominantly urban, market. The country has the possibility to overcome the situation of exclusion from the digital world for a large portion of its population (approximately 28 million Brazilians have internet access, the highest rate in Latin America), due to an increase in telephone services, particularly in the case of prepaid mobile telephones. In addition, the development of a specific model of digital television makes the Brazilian market a gigantic laboratory for the use of applied technology. Furthermore, Brazil has the largest and most diversified system of science, technology and innovation in Latin America, a result of the accrual of accomplishments in the last 50 years, which include the capacity for oil prospection in deep waters and the ability to build aircrafts. Furthermore, the country invests in space and nuclear programs, as well as in new areas currently at the border of knowledge, such as nanoscience, nanotechnology and biotechnology. Infrastructure and partnerships Within the area of infrastructure, due to the urgency in the social agenda, the demand for modernization is shared between the State and capital from the private sector, in initiatives known as Public-Private Partnerships (PPP). In the Transport sector, the country...
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...(Almost half of them are spoken in Brazil). They have recognized more than 33 families of large or medium size, and a high number of isolated languages and even languages deficient that could not be classified properly. Gastronomy: the South American cuisine has many influences . The more features are Amerindian , African , Spanish and Italian . In turn , habits and food products vary greatly depending on the physical environment of the regions , so that we can distinguish different areas. Roast consumption is widespread throughout the continent , especially non-native animals pigs goats, and cattle . Are popular outdoor barbecues , also known as roast or steak . Music: South American nations have an infinite variety of musical...
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