Public Relations in Brazil

No country in Latin America looks better to invest than Brazil, now enjoying its best period of economic growth of all times. The most recent weekly analyst survey of the country´s Central Bank forecasts that the Brazilian economy is on track to grow more than 5% in 2010. Brazil was one of the first countries to recover of the 2008 internacional economic crisis. “After several decades of low growth and macroeconomic vulnerability, Brazil’s economy is now in its strongest macroeconomic position ever”, said recently the governor of the bank, Henrique Meirelles. All procedures for foreign investors establishing themselves in Brazil, and for the granting of work visas to foreigners are facilitaded by the Brazilian Ministry of Labour and Employment.

The Organization for Economic Cooperation and Development (OECD) chief, Angel Gurria, sent a strong warning to emerging countries during an interview with CNBC television, last Thursday: “There’s… a danger of asset bubbles in places like Brazil or places like India and we should be careful about that — that is a real threat”, he said. His words came as investors appeared to also start to realize the risk, pulling more than 500 million US dollars out of the Sao Paulo stock market in January. There are fears regarding China´s moves to tighten its economy and also of a speculative asset bubble, which are affecting equity prices and the National currency, the Real. There are also worries about European economies. Investors fear Europe’s woes may extend global slump.

Brazil Defense Minister  has denied that the government had already decided to puchase French fighters as one of the countries leading newspaper, Folha de São Paulo, published today. The paper says that, after several months of intense speculation,  Brazil finally decided to purchase 36  Franch Rafale fighters aircraft made by Dassault. The decision  was made, according to Folha, after the manufacturer reduced from US8.2 billion to US6.2 billion. Even with the reduction, the French fighter is much more expensive than its competitors: the proposed model Gripen NG, the Swedish Saab, was $ 4.5 billion, and the F-18 Super Hornet, the U.S. Boeing, U.S. $ 5.7 billion. The package sold by the French would include aircrafts, weapons, logistics and cost of technology transfer. Dassault has estimated that the maintenance of aircraft for 30 years will cost $ 4 billion.

The heads of state of Brazil, Rússia, India and China will meet again on April 16^th, in Brasília, the Brazilian capital. They first met in the Russian city of Yekaterinburg last year to discuss the international financial crisis. The agenda for the April summit is still being discussed. The meeting comes as Brazil, Latin America’s largest economy, tries to take a more prominent role on the world stage. It has become an important member of the G20 group of nations – now a key forum for global economic and financial discussions. The BRIC group summit will be preceded on April 15th by a meeting of heads of states from Brazil, India and South Africa, also in Brasilia.

The interest from the oil companies in Brazilian ethanol, both in production and distribution, is growing. Following British oil company BP PLC, which announced in 2008 investments of US$1 billion in a Brazilian biofuel project, Royal Dutch Shell PLC is striking a deal with Brazil´s sugar and biofuel giant Cosan to create a $21 billion a year ethanol joint venture.  Shell would contribute $1.63 billion in cash to the venture over two years. It would be the Anglo-Dutch major’s first significant foray into biofuels and the largest move by a Western energy company so far into ethanol production and distribution.

In a move that will increase its participation in the fertilizer sector, Vale SA is buying Bunge´s fertilizer unit for US3.8 billion. The Brazilian based company, world’s biggest iron-ore producer and second largest nickel miner, is seeking to diversify from iron ore and boost investments in fertilizers throughout Latin America as Brazil aims to reach self-sufficiency in crop nutrients after prices surged. It’ll be Vale´s biggest takeover since its US18.2 billion buy of Canada’s Inco in 2006.

Brazilian President Lula da Silva in the inauguration of the green power plant

Brazil has just inaugurated world’s first ethanol-fuelled power plant. The ethanol used in the plant comes from sugarcane, but other biofuels being researched for ecologically friendly attributes or all-weather use are using huge quantities of soy, sunflower and other oil seeds. The new power plant is in the state of Minas Gerais, uses a flex-fuel turbine and began its test operations Dec. 31.Petrobras, the state-managed oil company, said the ethanol project gave Brazil a clear lead in the global quest for alternative, ecologically friendly sources of power generation.

Brazil’s airlines are doing very well. The numbers speak for themselves. The country´s domestic air traffic has nearly doubled since 2003 and expert forecast it will grow by up to 12% this year. Last year, passenger traffic grew 15%. A good example of the vitality of the Brazilian air travel market is the start-up Azul Linhas Aereas Brasileiras, which carried 2.2 million passengers in its first year of operation (2009) and is likely to be profitable this year. Its owner, David Neeleman, better known for starting JetBlue Airways Corp. a decade ago in the US, says Azul flew with nearly 80% of its seats full last year.

Brazilian booming economy and government´s programmes are helping to expand its middle class. Since 2003, more than 32 million people in this country of 198 million have entered the middle class, and about 20 million have risen above poverty. Brazil’s $1.3 trillion economy is bigger than those of India and Russia, and its per-capita income is nearly twice that of China. Recent discoveries by Brazil’s state oil company are expected to make the country one of the world’s biggest crude producers.

Brazil´s well respected Instituto de Pesquisa Econômica Aplicada (IPEA) has just published a study which concludes that:  “If Brazil maintains the same trend toward decreasing poverty and inequality as it has in the past five years, by 2016 these social indicators will resemble those found in developed countries. Extreme poverty could be eradicated for all practical purposes, and income inequality could be furthered reduced below the Gini coefficient of 0.500.” For Brazilians the news couldn´t be better. For centuries Brazil promised prosperity amidst the constant plague of poverty and inequality. Today the tide has turned, and it appears that indeed the poor shall inherit Brazil.

Read more:

NYTimes

OECD

BBC

Brazzilmag.com