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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.

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?) Brazil-The Developing Economy(hype or reality?) Presentation Transcript

    • BRAZIL
      The Growing Economy
      (Hype
      OR
      Reality ???)
    • 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
      • 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.
      • 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.
      • Military Expenditures (in US $): % of GDP
      1.3%
      • MACRO-ECONOMIC DATA
      • Unequal Distribution of Income
      • 60% of the total income is held by only 10% of the people.
      (Source-Worldbank)
    • Soccer…the Samba…and …the Carnivals…
    • The Up-side of Brazil
      • Unique access to Natural Resources
      • Largest economy in Latin America, 8th largest in the world in terms of Nominal GDP (World Bank & IMF-2009)
      • 5th largest country in the world.
      • It shares common boundaries with every South American country except Chile and Ecuador.
      • It has the largest farmable area in the world (22% of the territory), 33% of the planet’s forests, and 15% of the world’s potable water.
      • It is the world’s largest producer of coffee, oranges, and sugar-cane; 2nd largest of manioc, beans, soy, beef and chicken;3rd largest of refined sugar and corn; and ranks in the top ten in the production of grains, cocoa, eggs, pork, cotton and rice.
      • 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.
      • The Young and Strong Economy
      • Brazil is currently the third largest democracy in the world.
      • The democratic form of government in the Country is only 25 years old, which makes it 38 years younger than India’s democratic regime and 200 years younger than that of the United States.
      • Today, it has an exemplary democratic process supported by one of the most advanced voting systems in the world (expedient and fraud free) and an increasingly transparent regulatory environment.
      • Last year Brazil’s main stock exchange (BM&F BOVESPA) rose 71% in US dollar terms, even faster than India’s.
      • Last In…First Out- When the world sunk into a financial quicksand in 2008, Brazil was one of the last economies to succumb and among the first to rise out of the recessive sandpit.
      • Brazil will play host to the world’s two biggest sporting events in the coming years – the 2014 soccer World Cup and 2016 Summer Olympics – should also give a major boost to the economy.
      • Strong Growth, Stability & Market Friendly Policies Attract FDI
      • FDI has increased 437% from approx. US$ 4.4B in 1995 to an average of around US$23.6B in last 5 years.
      • Last year Brazil attracted FDI (foreign direct investment in factories and business operations) of $37 billion, or twice as much as India. It was the world’s third biggest raiser of investment capital via equity issues after the US and China.
      • According to the World Investment Prospects Survey 2009-2011, Brazil was ranked the fourth most attractive destination country for FDI, after China, the US and India.
      • 197 of Fortune 500 companies have investments in Brazil, meaning that they maintain plants or offices and employ workers in Brazil.
      • Incentives & Tax Benefits- Export incentives are available to producers and manufacturers for promoting Brazilian exports. Tax suspension and exemption of import tariffs, excise tax, and value-added tax on sales and services is provided for imported goods that will be used in the manufacture of products for export.
      • Income Growth to Add New Customers
      • Large Domestic Market- Over 50% of the population is economically active , making Brazil 7th largest consumer market. (Institute of Applied Economic Research-Dec09)
      • Between 2001-2007 Brazil’s poorest 10% enjoyed a 49% jump in real income.
      • GDP per capita is expected to be double by 2018.
      • 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.
      • Other Advantages
      • Economic Living Cost- Cost of living is about 20-25% less than in any European country.
      • High Level of Education- Literacy rate in Brazil 2003-2008 is 91% (data.un.org)
      • Busy Airports- There are about 2,500 airports in Brazil., the second largest number in the world.
      • São Paulo, is the largest and busiest airport, handling the vast majority of popular and commercial traffic of the country.
      • E-commerce- E-commerce in Brazil has been growing at over 30% per year since 2000, reaching close to US$ 5 billion in 2009.
      • Tourism- Brazil is a very popular tourist destination among people in world over. It attracts about 6 million foreign tourists every year. Thus the tourism sector promises great investment opportunities.
      • Businessmen involved in heavy industries investment would particularly be benefitted to a large extent as Brazil is a country that develops submarines and aircraft, and promotes research in aerospace.
    • 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.
    • Thank You !!!