Brazil-The Developing Economy(hype or reality?)

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Reality about Brazil economy and comparision with other developing countries like India and China.

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Brazil-The Developing Economy(hype or reality?)

  1. 1. Agenda  History of Brazil  The downside of Brazil and comparison with other developing countries • Poor national security • Crime Rate • Expenditure on Military • Macro-Economic Data • Projected GDP  The Upside of Brazil • Unique access to Natural Resources • Young & Strong Economy • Strong Growth, Stability and Market friendly policies attract FDI • Income Growth to Add new Customers • Strong Banking facility • Tax Benefits • Other Advantages
  2. 2. History of Brazil • The land now called Brazil was claimed by Portugal in April 1500, on the arrival of the Portuguese fleet commanded by Pedro Alvares Cabrel. • The independence from Portugal was achieved in 1822. • The country has been a Republic country since 1889.
  3. 3. Poor National Security •Crime: The presence of a significant criminal element within and on the fringe of Brazil’s borders poses an ongoing threat to public safety there. •Street crime is prevalent throughout Brazil’s major urban centers. •Rio de Janeiro and Sao Paulo have particularly high crime rates. •The tri-border region between Argentina, Brazil and Paraguay has long been a hotbed of criminal activity.
  4. 4. Brazil India China Total Crime Rate 44 30.7 19 0 5 10 15 20 25 30 35 40 45 50 %Change Total Crime Rate
  5. 5. Military Expenditures (in US $): % of GDP Country Percentage of GDP US $ Brazil $9.94 Billion India 2.5% $19.04 Billion China 4.3% $81.48 Billion UK 2.4% $42.83 Billion US 4.06% $500 Billion 1.3 %
  6. 6. MACRO-ECONOMIC DATA Real GDP Growth Rate (%) 2009 Nominal GDP Growth Rate (%) 2009 Nominal GDP Per Capita Growth Rate (%) 2009 Fiscal Deficit/Surplus as percent of GDP (%) 2009 Inflation Rate (from GDP Price Deflator) (%) Interest Rate (%) Unemployment Rate (%) BRAZIL -1.2 3.1 2 -0.9 4.4 19.6 16.5 INDIA 4.3 7.8 6.2 4.1 3.3 4 10.4 CHINA 6.3 9.4 8.7 8.6 2.8 2.2 7.4 -5 0 5 10 15 20 25 %change
  7. 7. REAL GDP 2010 REAL GDP 2011 BRAZIL 7.5 4.1 INDIA 9.7 8.4 CHINA 10.5 9.6 0 2 4 6 8 10 12 SOURCE-IMF PROJECTED GDP-2010 & 2011
  8. 8. Unequal Distribution of Income  60% of the total income is held by only 10% of the people. (Source-Worldbank)
  9. 9.  It is one of the few countries in the world that is self-sufficient in oil and is the world’s leader in alternative energy sources. It is responsible for 33% of the world’s ethanol production.  Brazil enjoys an advantageous climate that is primarily free from major natural disasters, and enjoys a temperate climate that extends the growing season beyond that of many other countries.  With this abundance of natural resources, Brazilians are manufacturing everything from aircrafts to hair pins.
  10. 10. Strong Banking System  Brazil also has one of the most well developed online banking systems in the world.  Brazil’s banks are required to keep 30% of all deposits with the central bank, plus capital reserves of at least 11% of total assets, when most financials outside the country maintain capital ratios of 16% or more.
  11. 11. Corporate tax Individual tax Capital gains Brazil 15 27.5 15 India 42 30 20 China 33 45 20 0 5 10 15 20 25 30 35 40 45 50 TAX% TAXATION
  12. 12. With these advantages, the investors would be in a win-win situation. The geographic conditions, the government initiative - all these factors make Brazil a heaven for investors to invest in.

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