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Why Would You Want to Invest Offshore in Brazil?
Not that long ago Brazil was touted as one of the BRICs nations. Along with Russia, India, and China and it seemed destined to join the ranks of the most developed and prosperous economies within just a decade or two. Brazil was considered a model for developing nations as employment soared, poverty was reduced, and safety net social programs helped stabilize their society. Then prices for oil and other commodities collapsed. Much of this had to do with China importing less as well. Nevertheless, Brazil was not equipped to moderate its social programs. And, on top of that, investigators uncovered corruption at the highest levels of the socialist government. And, Brazil entered an economic decline rivaling that of the Great Depression. So, why would you want to invest offshore in Brazil today?
Why would you want to invest offshore in Brazil today? A new conservative government along a partial recovery of oil market are good reasons.
70 Years of Crude Oil Prices
Source: Macro Trends
This graph of 70 years of oil prices shows the fall from $111 oil in June of 2014 to oil selling for less than $40 by the end of the year. As income from oil and other commodity exports fell, Brazil’s economy went into decline from which it is just now starting to recover. The reason to consider investment in Brazil today has to with the new conservative government. It will be friendlier to and more closely allied with the USA, and more open for foreign investment.
US Relations with Brazil
Senator Marco Rubio wrote a piece published on the CNN website. Rubio says the US should go big on Brazil.
On New Year’s Day, President Jair Bolsonaro was inaugurated in Brazil, ushering in a new era in Brazilian politics that marks a dramatic departure from the leftist, anti-American governments of Luiz Inácio Lula da Silva and Dilma Rousseff. The new Bolsonaro government has already indicated it seeks an even closer security and economic relationship with the United States.
The senator notes that closer cooperation in areas from space exploration to protection of intellectual property rights are already in the works. Foreign direct investment is likely to increase in Brazil as investors see a government friendlier to foreign investment.