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Report on
Country Analysis
Prepared For
Mahmuda Ali Moon
Faculty of IUBAT University
Prepared By
Group: Glory
Serial Name ID
28 Mohammad Sazzadul Islam 14102267
13 MD Nahid Hossain 14102140
35 Niloy Das 14102377
36 MD. Ashikur Rahman 14102383
49 Khandaker Raihan Hasan 14202200
56 Mst. Jannatul Ferdous 15102355
Course: International Business
Course Code: BUS-203
Section: A
Submission Date: 19th June, 2017
IUBAT - International University Of Business Agriculture and Technology
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Table of contents
Table of Contents
Executive summary ............................................................................................................................4
1. Cultural Factors:.............................................................................................................................5
1.1 Languages/ Major languages ......................................................................................................6
1.2 Religions/Major religions...........................................................................................................7
1.3 Ethnic makeup ..........................................................................................................................8
1.4 Role of family...........................................................................................................................9
1.5 Major differences in beliefs, values, customs and behaviors: ........................................................9
1.6 Unique business customs, etiquette and practices.......................................................................11
1.7 Unique aspects of written, oral and non-‐verbal communications ................................................14
1.8 The country’s culture using Hofstede’s model of cultural dimensions .........................................16
1.9 Major sports:...........................................................................................................................17
1.10 Recreation:............................................................................................................................18
1.11 Food:....................................................................................................................................18
2.0 Political and Legal Factors...........................................................................................................22
2.1 Political system and structure:..................................................................................................22
2.2 Stability of Government...........................................................................................................23
Source:.........................................................................................................................................24
2.3Future political risks:................................................................................................................24
2.4 Bribery and corruption risk/index:............................................................................................25
3.0 Economic Factors........................................................................................................................26
3.1 Demographics:........................................................................................................................26
3.2 Per capita income levels, wealth distribution: ............................................................................30
3.3 HDI indexes............................................................................................................................34
3.4 GNP:......................................................................................................................................35
3.5 Inflation rate:..........................................................................................................................36
3.6 Currency exchange rate:...........................................................................................................37
3.7 Unemployment rate .................................................................................................................38
3.8 Debt:......................................................................................................................................38
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3.9 Income distribution..................................................................................................................40
3.10 Poverty.................................................................................................................................41
3.11 Business environment:...........................................................................................................41
3.12 Major exports and trading partners..........................................................................................45
3.13 Education and literacy levels ..................................................................................................45
3.14 Availability of skilled labor, labor costs: .................................................................................46
3.15 Membership in regional economic and trading blocks: .............................................................48
Reference:....................................................................................................................................50
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Executive summary
Brazil is the largest country in South America and fifth largest in the world. Their official
language is Portuguese. It is most widely spoken language in Brazil. It is spoken by over 99
percent of the country’s population. There are also some other language that people spoken such
as Spanish, German, Italian, Japanese, English, and Amerindian languages. In Brazil, 88.9%
people of Brazil are Christians.
In this report we have analyzed the country in three dimensions such as cultural, political and
economic factors. In cultural part we have discussed about their cultural values, beliefs, gift
giving Etiquette, business etiquette, business Negotiation, communication ways, major sports,
foods and also the Hofstede’s model of cultural dimensions. As we know Hofstede’s model has
various dimensions like- power distance, individualism, masculinity, uncertainty avoidance, long
tern orientation and indulgence. The score of power distance is 69, in individualism dimension
score is 38, scores 49 in Masculinity dimension, in Uncertainty Avoidance dimension, Brazil’s
score is 79, In Long Term Orientation Brazil scores 44 and in indulgence score is 59.
In Political and legal factors part, we have determined the country’s political system, stability of
government, political risks and also corruption index. We have found that government stability
of Brazil is very low and it has high political risks. Corruption is one of the vital problems for the
country.
We have discussed about the country’s economic factors such as population growth rate,
distribution of population, GNI (Gross National Income) and GDP (Gross Domestic Product) per
capita, GDP growth rate, Human development index, inflation rate, unemployment rate, debt,
income distribution, major exports and trading partners, literacy levels and so on. The country’s
GDP and GNI per capita are above $10,000 which is quite good. And also literature rate is above
90 percent last few years. The government gives some incentives for foreign investment. The
country has 8 free economic zones for investing.
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1. Cultural Factors:
Summary of Cultural factors:
Cultural factors are one of the important factors which you have to consider when you want to
start a business in other country. Language is one of the important factors when anyone starts a
new business in another country. For doing a business in Brazil you have to know about their
language. The official language of Brazil is Portuguese. It is most widely spoken language in
Brazil. It is spoken by over 99 percent of the country’s population. There are also some other
language that people spoken such as Spanish, German, Italian, Japanese, English, and
Amerindian languages. Another thing is that 88.9% people of Brazil are Christians. For starting a
business in Brazil, you should know about their cultural values such as Men shake each other’s
hands and keep steady eye contact as a greeting, women usually kiss each other in their cheeks or
hug their friends and so on. And also you should know about their behaviors because it does can
be vary country to country. In Brazil, making brief eye contact with strangers is acceptable and
commonplace, punctuality is not generally strictly adhered to. Many guests to a party do not
arrive until an hour or two after the invitation suggests and the O. K. hand signal a rude gesture
in Brazil but in most countries all over the world it’s normal thing. When you want to do
business in Brazil, you have to know their gift giving Etiquette, business etiquette, business
Negotiation and so on. Brazilians prefer face-to-face meetings to written communication as it
allows them to know the person with whom they are doing business. Brazilians take time when
negotiating.
Hofstede’s model of cultural dimensions is most important factors for starting business in Brazil.
As we know Hofstede’s model has various dimensions like- power distance, individualism,
masculinity, uncertainty avoidance, long tern orientation and indulgence.The score of power
distance is 69 in Brazil it reflects that subordinates have more power distance with their boss or
elder. In individualism dimension, Brazil has a score of 38 which means that in this country
people from birth onwards are integrated into strong, cohesive groups especially represented by
the extended family. So, we can say that Brazil people not that much belief in individualism.
Brazil scores 49 in Masculinity dimension which are very intermediate score on this dimension.
In Uncertainty Avoidance dimension, Brazil’s score is 79. The score shows that Brazilian most
of the times try to avoid the uncertainty. In Long Term Orientation Brazil scores 44 which is
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intermediate in this dimension. Brazil's high score of 59 marks it as an Indulgent society. So,
people in societies classified by a high score in Indulgence generally exhibit a willingness to
realize their impulses and desires with regard to enjoying life and having fun. Food is also the
important part of the country’s culture. So, those factors should consider when anyone wants to
start business in Brazil.
1.1 Languages/ Major languages
Category Languages
Official Portuguese
Other Languages Spanish, German, Italian, Japanese,
English, and Amerindian languages.
The official language of Brazil is Portuguese. It is most widely spoken language in Brazil. It is
spoken by over 99 percent of the country’s population. There are also some other language that
people spoken such as Spanish, German, Italian, Japanese, English, and Amerindian languages.
The number of individual languages listed for Brazil is 237. Among them 216 are living and 21
are extinct. Of the living languages 201 are indigenous and 15 are non-indigenous. Furthermore,
6 are institutional, 31 are developing, 26 are vigorous, 56 are in trouble and 97 are dying.
The main indigenous languages are Apulia, Arara, Bororo, Canela, Carajá, Caribe, Guarani,
Kaingang, Nadëb, Nheengatu, Terena, Tucano and Xavante in Brazil.
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1.2 Religions/Major religions
Source:
http://www.globalreligiousfutures.org/countries/brazil#/?affiliations_religion_id=0&affiliations_
year=2010®ion_name=All%20Countries&restrictions_year=2014
The dominant religion of Brazil is Christianity. Here we can see that 88.9% people of Brazil are
Christians and 3% is Folk Religions. In Brazil very less percentage people are Buddhists, Hindu,
Jews and Muslims.And 8 percentage people are unaffiliated in Brazil.
1%
88.90%
3% 1% 1% 1% 1%
8%
0%
20%
40%
60%
80%
100%
Percentage
Religious Group
Brazil (2010)
Percentage
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1.3 Ethnic makeup
As we know Brazil has an approximate population of over 200 million people where 84% of the
population living in the urban areas. The population of the country is made up of several ethnic
groups.
Source: http://www.worldatlas.com/articles/largest-ethnic-groups-in-brazil.html
The largest ethnic groups in Brazil which is discussed below:-
Brancos (White Brazilians): Brancos is known as White Brazilians. The Brancosare is the
ethnic majority in the country about 47.73% of the country’s population. The majority of the
white Brazilians are found in states such as Santa Catarina, Rio Grande de Sul, Parana, and Sao
Paulo.
Pardo: Pardo or Brown Peopleare combined Brazilian natives, European and African ancestry or
triracial ancestry. We see that 43.13% of the Brazilian population is Pardo ethnic group. The
ethnic group had its history from the colonial period when the European settlers came to Brazil.
47.73%
43.13%
7.61%
1.09% 0.43%
Share of Population(2010)
Brancos(white Brazilians)
Pardo (Combined European,
Native, and African Ancestry)
Pretos (African-Brazilians)
Amarelos (Asian Brazilian)
Indigena (Indigenous Brazilian)
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Pretos (African-Brazilians): The Preto is one of the ethnic groups categorized by color.
Currently, 7.61% of the population is Pretos ethnic group with the majority living in Salvador,
and Bahia.
Amarelos (Asian Brazilian): Amarelos is another ethnic group which is categorized by color.
Currently, Amarelos ethnic group is 1.09% of the country’s population.
Indigena (Indigenous Brazilian): Indigena ethnic group is known as Indigenous Brazilian
which is only 0.43% of the country’s population.
1.4 Role of family
Family plays a major role in both social and business interactions. Family is the foundation of
the Brazilian social structure. The nuclear family has strong ties to the extended family in which
includes cousins, aunts, uncles, grandparents, godparents and close friends. Typically the
husband is considered to be the head of the household. The most important thing is that we can
find three generations living under the same roof. In their culture, Married children tend to live in
a house or apartment near the parents. Children are the integral part of the family unit and are
expected to contribute to the overall welfare of the entire family. Interpersonal relationships are
important. Grandparents usually live with their children and may participate in community
activities for the elderly. As we know Brazilians are quite collectivistic and interdependent.
Usually Family members give each other encouragement and freedom to pursue their personal
interests.
1.5 Major differences in beliefs, values, customs and behaviors:
Religious belief:
Brazil has the largest Catholic community in the world. Recent censuses have revealed that
around 90% of the Brazilian population beliefs to some religious ideal, making it more
religiously willing than any other South American country. In Brazil, only around 1% of its
population does not believe in a God, or a supreme being in some form or another.
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Cultural values:
Men shake each other’s hands and keep steady eye contact as a greeting.
Women usually kiss each other in their cheeks or hug their friends.
If a female wishes to shake hands with a male, it is expected that she will extend her hand
first.
When addressing an adult, it is common to call them “senhor” ("Mister") or “senhora”
("Miss") followed by their first name.
If invited to a house it’s polite to bring a small gift or flowers.
Customs and Behaviors:
Brazilians are quite direct in their manner of speaking as well as in what they say.
When communicating, locals will often touch one another lightly and stand close
together. This applies even when two women are talking, or when a man and woman are
in conversation.
Making brief eye contact with strangers is acceptable and commonplace.
Punctuality is not generally strictly adhered to. Many guests to a party do not arrive until
an hour or two after the invitation suggests.
A close friendship is indicated by rubbing the two index fingers together.
Thumbs up indicates approval, while thumbs down represents unhappiness and
disapproval.
Sticking your thumb between your middle and index finger is a symbol of wishing
someone good luck in Brazil.
The legal drinking and smoking age is 18 years.
If you are going to Brazil on business, have a batch of business cards printed in English
with Portuguese on the back. Then, present these cards to locals with the Portuguese side
facing up.
Three-piece suits carry an "executive" connotation, whereas two-piece suits are
associated with office workers. Conservative attire for women in business is very
important. Also make sure your nails are manicured
The colors of the Brazilian flag are yellow and green. Avoid wearing this combination in
any fashion
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Touching arms and elbows and backs very common
The O. K. hand signal a rude gesture in Brazil
To express appreciation, a Brazilian may appear to pinch his earlobe between thumb and
forefinger
To invoke good luck, place your thumb between your indexesand middle finders while
making a fist. This is also known as the "fig"
Flicking the fingertips underneath the chin indicates that you do not know the answer to a
question
Make appointments at least two weeks in advance. Never try to make impromptu calls at
business or government offices
If entertained in the home, it is polite to send flowers to the hostess the next day with a
thank-you note.
Purple flowers are extensively used at funerals, so be cautious when giving someone
purple flowers.
1.6 Unique business customs, etiquette and practices
Brazilian Diversity
Brazil is a mixture of races and ethnicities, resulting in rich diversity.
Many original Portuguese settlers married native women, which created a new race,
called 'matzos'.
'Mulattoes' are descendants of the Portuguese and African slaves.
Slavery was abolished in 1888, creating over time a further blurring of racial lines.
Unlike many other Latin American countries where there is a distinct Indian population,
Brazilians have intermarried to the point that it sometimes seems that almost everyone
has a combination of o European, African and indigenous ancestry.
Etiquette and Customs in Brazil:
Gift giving Etiquette
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If invited to a Brazilian's house, bring the hostess flowers or a small gift.
Orchids are considered a very nice gift, but avoid purple ones.
Avoid giving anything purple or black as these are mourning colors.
Handkerchiefs are also associated with funerals, so they do not make good gifts.
Gifts are opened when received.
Dining Etiquette
If you are invited to Brazilian’s house:
Arrive at least 30 minutes late if the invitation is for dinner.
Arrive up to an hour late for a party or large gathering.
Brazilians dress with a flair and judge others on their appearance. Casual dress is more
formal than in many other countries. Always dress elegantly and err on the side of over-
dressing rather than under- dressing.
If you did not bring a gift to the hostess, flowers the next day are always appreciated.
Business Etiquette and Protocol Relationships and Communication:
Doing Business etiquette Brazil
Brazilians need to know who they are doing business with before they can work
effectively.
Brazilians prefer face-to-face meetings to written communication as it allows them to
know the person with whom they are doing business.
The individual they deal with is more important than the company.
Since this is a group culture, it is important that you do not do anything to embarrass a
Brazilian.
Criticizing an individual causes that person to lose face with the others in the meeting.
The person making the criticism also loses face, as they have disobeyed the unwritten
rule.
Communication is often informal and does not rely on strict rules of protocol. Anyone
who feels they have something to say will generally add their opinion.
It is considered acceptable to interrupt someone who is speaking.
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Face-to-face, oral communication is preferred over written communication. At the same
time, when it comes to business agreements, Brazilians insist on drawing up detailed
legal contracts.
Business Negotiation
Brazilians are more comfortable doing business with people and companies they know.
Wait for your Brazilian colleagues to raise the business subject. Never rush the
relationship- building time.
Brazilians take time when negotiating
Do not rush them or appear impatient.
Expect a great deal of time to be spent reviewing details.
Often the people you negotiate with will not have decision-making authority.
It is advisable to hire a translator if your Portuguese is not fluent.
Use local lawyers and accountants for negotiations.
Brazilians resent an outside legal presence.
Brazilian business is hierarchical.
Decisions are made by the highest-ranking person.
Brazilians negotiate with people not companies.
Do not change your negotiating team or you may have to start over from the beginning.
Business Meeting Etiquette
Business appointments are required and can often be scheduled on short notice; however,
it is best to make them 2 to 3 weeks in advance.
Confirm the meeting in writing. It is not uncommon for appointments to be cancelled or
changed at the last minute.
In Sao Paulo and Brasilia it is important to arrive on time for meetings. In Rio de Janeiro
and other cities it is acceptable to arrive a few minutes late for a meeting.
Do not appear impatient if you are kept waiting. Brazilians see time as something outside
their control and the demands of relationships takes precedence over adhering to a strict
schedule.
Meetings are generally rather informal.
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Expect to be interrupted while you are speaking or making a presentation.
Avoid confrontations. Do not appear frustrated with your Brazilian colleagues.
Dress Etiquette
Brazilians pride themselves on dressing well.
Men should wear conservative, dark colored business suits. Three-piece suits typically
indicate that someone is an executive.
Women should wear suits or dresses that are elegant and feminine with good quality
accessories. Manicures are expected.
Business Cards
Business cards are exchanged during introductions with everyone at a meeting.
It is advisable, although not required, to have the other side of your business card
translated into Portuguese.
Present your business card with the Portuguese side facing the recipient
1.7 Unique aspects of written, oral and non-‐verbal communications
Written Brazilian Portuguese: Brazilian Portuguese is written using the standard roman
alphabet of 26 letters. Traditionally written Portuguese in Brazil has been based on the language
used in Portugal, with Portuguese writers being used as models. However, in recent years the
trend has been moving away from this, and for embracing the more Brazilian elements of the
language in the written as well as the spoken word.
Communication
Language: The official language of Brazil is Portuguese. It is notably different from the
Portuguese spoken in Portugal. Brazilians do not perceive themselves as Hispanics. They may
take offense if addressed in Spanish. However, if you speak Spanish fluently, you may want to
ask politely whether they would mind speaking it.
Many businesspeople speak at least some English. With some high-ranking managers, it may be
useful to engage an interpreter. To avoid offending the other side, ask beforehand whether an
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interpreter should be present at a meeting. When communicating in English, speak in short,
simple sentences and avoid using jargon and slang.
Behavior: Brazilians generally dislike loud and boisterous behavior. However, it is crucial that
you never lose your temper or appear impatient, as there is always a risk of hurting someone’s
pride. People may interrupt others or speak in parallel, but this is not recommended. Emotions
are usually shown very openly. Brazilians generally converse in extremely close proximity,
standing only one to two feet apart. Never back away, even if this is much closer than your
personal comfort zone allows. Doing so could be read as a sign that you are uncomfortable
around them.
Direct or Indirect: Depending on the situation, communication in Brazil can be direct or
indirect. People usually avoid open conflict. In addition, they may be reluctant to disagree openly
with someone they like, in which case it can become difficult to know their true opinion.
Gestures and body language: Gestures and body language can be very expressive. It is often
not a good idea to imitate them, though. Physical contact with others of the same gender is ok.
The American OK sign, with thumb and index finger forming a circle, is an obscene gesture in
Brazil. Non-verbal communication can be very extensive. If someone is flicking their fingertips
underneath the chin, they are signaling that they do not know the answer to a question. Eye
contact should be very frequent, almost to the point of staring. This conveys sincerity and helps
build trust.
Non verbal
Conversation: The number one difference between Brazilian and American culture is personal
space. Brazilians tend to stand very close to each other during conversation – one to two feet
apart is the norm. Brazil is also a high touch culture. It would not be unusual for a Brazilian man
to put his hand on the shoulder, arm, or hand of a Brazilian woman during conversation. It would
certainly take some time and adjustment as a business leader in Brazil. Americans value personal
space and we certainly are not a high touch culture. You must do your best to make yourself
appear comfortable during conversation, though, as Brazilians view people who keep a far
distance as rude and unfriendly.
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Signal: There are a few hand signals in America that don’t exactly correspond with Brazilian
hand signals. In Brazil, making the “O.K.” sign with your fingers is equivalent to flipping
someone the bird (middle finger) in America. There is also a gesture in Brazil that warns
someone that his wife is cheating. This gesture could obviously end poorly in some
circumstances. Your best bet with hand gestures and emblems as a business leader in Brazil is to
try to avoid them altogether. If you feel like you must do hand gestures, make sure to do your
research.
Eye contact: Eye contact in Brazil is fairly similar compared to eye contact in America.
Brazilians favor direct eye contact during conversation. Steady, consistent eye contact shows
sincerity and a lack of eye contact will result in a lack of trust.
1.8 The country’s culture using Hofstede’s model of cultural dimensions
Source: https://geert-hofstede.com/brazil.html
Power Distance: Here we can see that with a score of 69, Brazil reflects a society that believes
hierarchy should be respected and inequalities amongst people are acceptable. The different
distribution of power justifies the fact that power holders have more benefits than the less
powerful in society. In Brazil it is important to show respect to the elderly.
0
10
20
30
40
50
60
70
80 69
38
49
76
44
59
Score
Dimentions
Geert Hofstede
Score out of 100
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Individualism: Brazil has a score of 38 which means that in this country people from birth
onwards are integrated into strong, cohesive groups especially represented by the extended
family; including uncles, aunts, grandparents and cousins which continues protecting its
members in exchange for loyalty. So, we can say that Brazil people not that much belief in
individualism.
Masculinity: As we know, high score (Masculine) on this dimension indicates that the society
will be driven by competition, achievement and success, with success being defined by the best
in field. Other hand, low score (Feminine) on the dimension means that the dominant values in
society are caring for others and quality of life. Here we see that Brazil scores 49 which are very
intermediate score on this dimension.
Uncertainty Avoidance: In this dimension, Brazil’s score is 79. The score shows that Brazilian
most of the times try to avoid the uncertainty.
Long Term Orientation: As we know, this dimension describes how every society has to
maintain some links with its own past while dealing with the challenges of the present and
future, and societies priorities these two existential goals differently. At 44, Brazil scores as
intermediate in this dimension.
Indulgence: Here, Brazil's high score of 59 marks it as an Indulgent society. So, people in
societies classified by a high score in Indulgence generally exhibit a willingness to realize their
impulses and desires with regard to enjoying life and having fun. In this society, they possess a
positive attitude and have a tendency towards optimism. In addition, they place a higher degree
of importance on leisure time, act as they please and spend money as they wish.
1.9 Major sports:
1. Football or Soccer: Football is most popular and favorite sport among the Brazilian.
According to FIFA (Federation International of Football Association), there are 13.2 million
football players in Brazil, not considering those who practice it merely for fun. Brazil is known
as the country of some of the most talented players in the world, and is the only national team
which has won five FIFA World Cup titles.
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2. Volleyball: Volleyball is one of the popular sports in Brazil. The research document on the
practice of sports in Brazil which was released in 2006, there were 15.3 million practitioners in
the country, counting both pros and amateurs.
3. Swimming: It is not hard to understand why Swimming is popular in a country that has a
coast with more than 7,000 km. The number of swimmers in Brazil is very big most of them
learn how to swim when they are young.
4. Futsal and Beach Soccer: Both Futsal and Beach Soccer that are known as Futebol de Areia.
Both are very popular among young students.
5. Capoeira: Even though Capoeira is recognized as a sport, some affirm that it is more similar
to a dance or merely to a cultural expression. It was created as a derivation of dances and rituals
developed by African slaves during Brazil’s colonial period. Nowadays, people from various
ages and economical classes practice Capoeira. The document that researched the practice of
sports in Brazil which was released in 2006, there were 6 million practitioners in the country.
1.10 Recreation:
Music, dancing and festivals are central to Brazilian life. These are enjoyed especially during the
annual Carnival and on five days preceding Ash Wednesday. The most spectacular is the world-
renowned Carnival held in Rio de Janeiro, although festivals are held throughout the country at
this time. There are many colorful samba performances, live music, parades, drinking and
general merry-making, as the whole town turns out to party.
Most Brazilians can dance, and many expatriates take the opportunity to learn the samba, bossa
nova or lambada while living there. The main cities, especially Rio de Janeiro, Paulo and
Salvador offer excellent entertainment to suit all tastes. Their nightlife is famed throughout the
region with numerous nightclubs, discos and bars offering live music and other acts, but in many
this only gets under way after midnight. Rio has a number of fascinating museums, such as the
MuseuHistoricoNacionalandtheMuseu de Arte Moderna do Rio de Janeiro.
1.11 Food:
Brazil has a wonderful variety of traditional foods. Brazilian cuisine is a result of a combination
of key ingredients brought by different cultures that arrived into the country. In the 16th century,
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many other different nationalities introduced a variety of elements and dishes for example the
Italians (pizza, pasta), the Spanish (empanadillas - empadinhas), the Arabs (spiha, lamb, kibbeh),
the Chinese and Japanese (wontons – pastels).
In Brazil, Lunch is most of the time a substantial meal. Both lunch and dinner end with a small
but strong cup of coffee. Food is customarily prepared from scratch. Some traditional and
famous food of Brazil is in the following:
1. Coxinhas: Coxinhasis one of the traditional foods in Brazil. It is looks like little raindrops of
fried goodness usually filled with chicken and a very creamy cheese called "catupiry."
2. Brigadeiro: It is made with condensed milk instead of cream and covered in chocolate
sprinkles.
3. Pao de Queijo: This is also one of the most famous foods in Brazil. It is made by little rolls of
bread with cheese baked into it.
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4. Farofa: It is fried cassava flour. It can include egg, bacon, and other add-ons. It's usually
sprinkled over rice and beans.
5. FeijaoTropeiro: It is made by pinto beans sautéed with cassava flour, scallions, egg, and
bacon.
6. Acai: Acai is one of the popular foods in the country.
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7. Pasteis: It is also another popular and traditional food in Brazil. It is made by cheese, beef and
cod fish.
8. Feijoada: It is made by black bean stew with various types of beef and sausage.
9. Bolinho de Chuva: It is little balls of glorious fried dough sprinkled with sugar and
cinnamon.
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10. Moqueca de Camarão: It is a shrimp stew cooked in coconut milk and palm oil and also
add veggies such as peppers and tomatoes to complete.
2.0 Political and Legal Factors
2.1 Political system and structure: Brazil is a presidential and federative republic with
considerable decentralized federalism. The Federative Republic of Brazil consists of 26 states
and the Federal District of Brasilia. Brazilian citizens are obliged to vote and it is up to the
population to choose their Legislative and Executive representatives.
The government of Brazil is separated into three distinct branches such as the Executive,
Legislative and Judicial branches, each with a number of powers and duties as outlined in the
Brazilian Constitution of 1988.
Every two years, Brazilians vote to select who is going to represent them in the Executive and in
the Legislative power. Nowadays, there are two elections in Brazil, the national and the
municipality one. Each of them occurs every four years.
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The executive branch of Brazil’s government is headed up by a directly-elected president who
serves as both head of the government and head of state.
The legislative branch of Brazil’s government is divided between two houses or chambers: the
Senate and the Chamber of Deputies. Each state, regardless of size, population, or affluence,
elects three senators to represent that particular region. The number of Chamber Deputies each
state elects to that house of the National Congress is based on its population.
Brazil’s judicial branch of government consists of two types of courts: JusticaComum, or
“ordinary courts;” and JusticaEspecializada, specialized courts. The ordinary courts in Brazil
operate at both the state and federal level. Specialized courts in Brazil operate solely at the
federal level. These courts are divided into three categories, based on the subject matter in which
they have jurisdiction: Military courts, Electoral Courts, and Labor Courts.
The two highest courts in Brazil are the Supreme Federal Court and the Superior Court of
Justice. The Supreme Federal Court is known as the highest court in the land, charged with
enforcing and protecting the Brazilian Constitution. The Supreme Court of Justice is the highest
court in Brazil with regard to all non-constitutional issues.
2.2 Stability of Government
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Source: http://www.theglobaleconomy.com/Brazil/wb_political_stability/
Interpretation: According to the Political stability index if point is -2.5 weak that means the
country’s political stability is weak other hand if point is 2.5 that means country’s political
stability is strong. Here we can see that from 2011 to 2015 Brazil’s political stability point is
negative except 2014. In 2014 political stability point is positive but not that much strong. The
maximum lowest point is -0.38 in 2011.
2.3Future political risks:
Brazil has political risks in future. The year of 2016 was a year full of political crises. In 2015
and 2016, Brazil has experienced an unprecedented economic and political crisis with two
successive years of recession. The entire political class is mired in a corruption scandal of epic
proportions. For more than a decade, Petro bras, the national oil company, has been used by
politicians of all colors as a slush fund to finance election campaigns. In 2017, Brazil tries to
overcome the political crisis gradually. But more concern is that in future there can be more
political crisis.
-0.14
0.05
-0.28
-0.1
-0.38
-0.45
-0.4
-0.35
-0.3
-0.25
-0.2
-0.15
-0.1
-0.05
0
0.05
0.1
2015 2014 2013 2012 2011
points Political Stability
Political Stability (-2.5= Weak;
2.5= Strong)
26. Page 25 of 50
Country Risk Rating: According to the Global EDGE country risk rating, Brazil is in “C”
category which indicates that country has high risk in terms of political outlook. The C category
also indicates that very uncertain political and economic outlook and a business environment
with many troublesome weaknesses can have a significant impact on corporate payment behavior
and corporate default probability is high.
2.4 Bribery and corruption risk/index:
Corruption is one of the main challenges of Brazil. It is affecting the quality of services provided,
infrastructure and overall investment in the country. Recent grand corruption scheme allegedly
involving high-level politicians, executives from the Brazilian state-owned oil company and the
largest construction companies draws attention to the country’s systemic failures that give rise to
opportunities of mismanagement and corruption. According to the World Economic Forum
2016, corruption scandals have undermined the trust in both private and public institutions.
A1 A2 A3 A4 B C D E
Very Low Risk Low Risk Acceptable Risk High Risk Very High Risk
Brazil
27. Page 26 of 50
Source: https://www.transparency.org/news/feature/corruption_perceptions_index_2016
Interpretation: According to the Transparency International, in 2016 the score is 40 out of 100
and ranking is 79 out of 176. As we know, anything below 50 indicates governments are failing
to tackle corruption. Here we can see that in 2015 country’s score was 38 which is lowest
compare with last 5 years. Last 5 years their score is below 50 which indicate that the
government couldn’t control the corruption which is concern for people those are willing to do
business in Brazil.
3.0 Economic Factors
3.1 Demographics:
Population:
The current population of Brazil is 211,172,574 in June 17, 2017, based on the latest
United Nations estimates.
Brazil population is equivalent to 2.81% of the total world population.
79
76
69
72
69
40 38
43 42 43
0
10
20
30
40
50
60
70
80
90
2016 2015 2014 2013 2012
Score(outof100)&Rank(outof176)
Years
Corruption Index
Rank
Score
28. Page 27 of 50
Brazil ranks number 5 in the list of countries by population.
The population density in Brazil is 25 per Km2.
In Brazil, 84.3 % of the population is urban
The median age in Brazil is 31.7 years.
Population Growth Rate:
Source: http://data.worldbank.org/indicator/SP.POP.GROW?locations=BR
Interpretation: In 2013 population growth rate was 0.92 percent, 2014 0.89, in 2015 0.86, in
2016 0.83 and in 2017 0.8. By looking at this graph we can see that population growth rate is
decreasing. Which we can say is a plus point for the country. Because, if the population rate is
increased significantly, then the country might face various crisis to serve its nation.
0.8
0.83
0.86
0.89
0.92
0.74
0.76
0.78
0.8
0.82
0.84
0.86
0.88
0.9
0.92
0.94
2017 2016 2015 2014 2013
Percentage
Year
Population Growth Rate(%)
Growth Rate(%)
29. Page 28 of 50
Distribution of population:
Source: http://data.worldbank.org/indicator/SP.POP.65UP.TO.ZS?locations=BR
Interpretation: Here we can see that Brazilians youth population is much than any other aged
people. This is really a great point for this country. So we can see that in 2011 youth population
was 68.26%, in 2012 68.49%, in 2013 68.69%, in 2014 68.90%, and in 2015 69.13%. So we can
say that percent of youth population in 2015 has increased than before.
Urban vs. Rural Life in Brazil:
Urban:
Brazil 2 largest cities (Rio de Janeiro and Sao Paulo) boast some of the largest
populations in urban environments around the globe.
Both cities are in the top 25 largest cities in the world.
Brazil's large cities face overpopulation, poverty, and slums (also known as flavelas).
23.03% 23.53% 23.93% 24.40% 24.86%
69.13% 68.90% 68.69% 68.49% 68.26%
7.85% 7.58% 7.33% 7.10% 6.89%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
2015 2014 2013 2012 2011
Percentage
Year
Distribution of Population (Ages group)
Ages 65 and above (% of total)
Age 15-64 (% of total)
Age 0-14 (% of total
30. Page 29 of 50
Most employees in the urban areas work for banks, hotels, factories, office buildings, or
stores.
Rural:
The rural environment is extremely different; the land in Brazil is vast, so much of the
land is unpopulated.
Most rural inhabitants work on large plantations or ranches.
Poverty is a major issue in the rural areas, as in the urban counterparts.
Many workers can barely feed their families and abject impoverishment is rampant.
Cities vs. Village:
Village life is cheaper than the city life and also the village is lot cleaner than city.
In village, it seems have more time at hands than city because of traffic jam.
Village lacks cultural equipment. Most of the village doesn’t have movie theaters and
museum where most of the city has more than one theater.
Village has fewer facilities like education, health and so on than the city. Most of the city
has enough facility about education, health and other facilities.
31. Page 30 of 50
3.2 Per capita income levels, wealth distribution:
GNI Per capita: GNI means Gross National Income. As we know, Gross National Income
(GNI) measures the income generated both by total domestic production as well as international
production activates of national companies. We compute per capita GNI by taking the GNI of a
country and converting into a standard currency and then dividing this sum by population.
Source: http://data.worldbank.org/indicator/NY.GNP.PCAP.KD?locations=BR
Interpretation: From this graph we can observe that in 2011 GNI was $10,910, in 2012
$12,170, in 2013 12,610, in 2014 11,910, and in 2015 $9,990. So, we can say that, per person’s
income level have decreased which says that income level has decreased.
9,990
11,910
12,610
12,170
10,910
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2015 2014 2013 2012 2011
US$
Year
GNI per capita (US$)
GNI per capita (US$)
32. Page 31 of 50
GDP Per capita: GDP means Gross Domestic Product. We know, Per capita GDP is a measure
of the total output of a country that takes gross domestic product (GDP) and divides it by the
number of people in the country.
Source: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=BR
Interpretation: Here, we can see that, GDP in 2011 was 13,047.24, in 2012 12,179.69, in 2013
12,106.21, in 2014 11,917.79 and in 2015 8,677.77. So through this we can say that Brazils GDP
in 2011 was higher than other years. And in 2015 we can see that GDP have decreased in a large
number.
8,677.77
11,917.79
12,106.21
12,179.69
13,047.24
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
14,000.00
2015 2014 2013 2012 2011
US$
Year
GDP per capita (US$)
GDP per capita (US$)
33. Page 32 of 50
GDP Growth rate:
Source: http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=BR
Interpretation: we can say that in 2011 GDP growth rate was 3.974%, in 2012 it was 1.921%,
in 2013 it was 3.005%, in 2014 it was 0.54% and in 2015 it was -3.769. Through this graph we
can see that GDP growth rate has decreased in 2015 which is not a very good sign for the
country. Because it is the primary indicators used to gauge the health of a country's economy. It
represents the total dollar value of all goods and services produced over a specific time period.
So definitely a country wants this rate to be in high position.
-3.769
0.504
3.005
1.921
3.974
-5
-4
-3
-2
-1
0
1
2
3
4
5
2015 2014 2013 2012 2011
Percentage
Year
GDP growth rate (annual %)
GDP growth rate (annual %)
34. Page 33 of 50
PPP Per capita income levels:
Source: https://tradingeconomics.com/brazil/gdp-per-capita-ppp
Interpretation: Per capita GDP is a measure of the total output of a country that takes gross
domestic product (GDP) and divides it by the number of people in the country. We can see that
in 2011 Brazils GDP per capital was $14,836.38, in 2012 it was $15,256.61, in 2013 it was
15,823.61, in 2014 it was 16,045.23 and in 2015 it was $15,473.69. In 2011, 2012, 2013 GDP
per capital was less than 2014. But in 2015 it again decreased which a country does not expect
to be.
15,473.69
16,045.23
15,823.61
15,256.61
14,836.38
14,000.00
14,500.00
15,000.00
15,500.00
16,000.00
16,500.00
2015 2014 2013 2012 2011
US$
Year
GDP per capita, PPP ($)
GDP per capita, PPP ($)
35. Page 34 of 50
3.3 HDI indexes: The Human Development Index (HDI) is a summary measure of average
achievement in key dimensions of human development: a long and healthy life, being
knowledgeable and have a decent standard of living.
Source: http://hdr.undp.org/en/countries/profiles/BRA
Interpretation: The Human Development Index (HDI) is a composite statistic of life
expectancy, education, and per capita income indicators, which are used to rank countries into
four tiers of human development. A country scores higher HDI when the lifespan is higher, the
education level is higher, and the GDP per capita is higher. We can see that 2011 HD index was
0.73, in 2012 it was 0.734, in 2013 it was 0.747, in 2014 it was 0.754, and in 2015 it was 0.754.
Here in 2014 and 2015 the country has hold on to its position of Human Development Index.
0.754 0.754
0.747
0.734
0.73
0.715
0.72
0.725
0.73
0.735
0.74
0.745
0.75
0.755
0.76
2015 2014 2013 2012 2011
Score
Year
Human Development Index
HDI Score
36. Page 35 of 50
3.4 GNP: GNP means Gross National Product. Gross national product (GNP) is an estimate of
total value of all the final products and services produced in a given period by the means of
production owned by a country's residents.
Source: https://tradingeconomics.com/brazil/gross-national-product
Interpretation: we can assume that Gross national product (GNP) is an estimate of total value
of all the final products and services produced in a given period by the means of production
owned by a country's residents. So in 2012 it was 1.59 billion, in 2013 it was 1.49 billion, in
2014 it was 1.45, in 2015 it was 1.38 billion, and in 2016 it was 1.24 billion.
1.24
1.38
1.45 1.49
1.59
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2016 2015 2014 2013 2012
BRLinMillion
Year
GNP in BRL Million
GNP in BRL Million
37. Page 36 of 50
3.5 Inflation rate: As we know that Inflation is the rate at which the general level of prices for
goods and services is rising and consequently the purchasing power of currency is falling.
Inflation results when aggregate demand grows faster than aggregate supply.
Source: http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=BR
Interpretation: Inflation is the rate at which the general level of prices for goods and services is
rising and, consequently, the purchasing power of currency is falling. Central banks attempt to
limit inflation, and avoid deflation, in order to keep the economy running smoothly. In 2012 it
was 5.402%, in 2013 it was 6.202%, in 2014 it was 6.332%, in 2015 it was 9.028% and in 2016
it was 8.739%. So we can see that in 2016 inflation rate has decreased from 2015 which indicates
a good sign for the country.
8.739 9.028
6.332 6.202
5.402
0
1
2
3
4
5
6
7
8
9
10
2016 2015 2014 2013 2012
Inflationrate%
Year
Inflation rate (Annual %)
Inflation rate %
38. Page 37 of 50
3.6 Currency exchange rate: Currency exchange rate means the price of a nation’s
currency in terms of another currency.
Source: https://tradingeconomics.com/brazil/currency
Interpretation: In here we can see that in 2013 BRL per dollar was less than 2017. And we can
see that in 2013 exchange rate of BRL to USD was 2.156, in 2014 it was 2.353, in 2015 it was
3.327, in 2016 it was 3.489, and in 2017 it was 3.37.
3.37 3.489
3.327
2.353
2.156
0
0.5
1
1.5
2
2.5
3
3.5
4
2017 2016 2015 2014 2013
BRLtoUSD
Year
Exchage rate BRL to USD
Exchage rate to USD
39. Page 38 of 50
3.7 Unemployment rate: The unemployment rate is the number of unemployed workers who
are seeking employment for pay divided by the total civilian labor force.
Source: https://tradingeconomics.com/brazil/unemployment-rate
Interpretation: by this graph we can see that in 2016 unemployment rate was 5.746 this is much
less than 2012. And it says that unemployment rate has decreased. And also we can see that in
2012 unemployment rate was 7.352, in 2013 it was 7.132, in 2014 it was 6.182, in 2015 it was
5.711 and in 2016 it was 5.746. So we can say that in 2012 and 2013 Brazil was facing high
unemployment rate.
3.8 Debt:
7.352 7.132
6.182
5.711 5.746
0
2
4
6
8
2012 2013 2014 2015 2016
Rate%
Year
Unemployment rate
unemployment rate
69.49%
65.45%
56.28%
51.54% 53.67%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
2016 2015 2014 2013 2012
Percentage
Year
Debt to GDP %
Debt to GDP %
40. Page 39 of 50
Source: https://tradingeconomics.com/brazil/government-debt-to-gdp
Interpretation: In this chart we can see that in 2012 dept of GDP was 69.49%, in 2013 51.54%,
in 2014 56.28%, in 2015 65.45% and in 2016 69.49%. So, by this we can say that dept ration
was more in 2016 and less in 2013.
Government Debt:
Source: https://tradingeconomics.com/brazil/government-debt
Interpretation: We can see that in 2011 government debt was 2.383 trillion, in 2012 it was
2.882 trillion, in 2013 3.051 trillion, in 2014 3.378 trillion, and in 2015 4.049 trillion. In 2015
government debt was much higher than other years. And in 2011 government debt was less than
all other years.
4.049
3.378
3.051
2.882
2.383
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2015 2014 2013 2012 2011
BRLinTrillion
Year
Government debt
government debt
41. Page 40 of 50
3.9 Income distribution
Source: http://data.worldbank.org/indicator/SI.POV.GINI?locations=BR
Interpretation: As we know, the GINI index or GINI coefficient is a statistical measure of
distribution. The coefficient ranges from 0 or 0% to 1 or 100%. Here we can see that in 2011 it
was 53.09% which is decreased next 3 years. In 2014 it was 51.48% which is lowest compare
with other years. So, the country is in a moderate position.
50.5
51
51.5
52
52.5
53
53.5
2014 2013 2012 2011
51.48
52.87
52.67
53.09
Percentage
Year
GINI Index
GINI Index
42. Page 41 of 50
3.10 Poverty
Source: http://data.worldbank.org/topic/poverty?end=2014&locations=BR&start=2008
Interpretation: Here, we have shown that how much percentage of people is living under
poverty line in terms of $1.90 per day income. We can see that in 2010 5.80% of people were
living under poverty line. But important thing is that after that every year it was decreased. In
2014 it was 3.70% which is lowest compare with other years.
3.11 Business environment:
Government attitude to foreign investment and trends: Foreign investment is generally welcome
in Brazil. Brazil is the largest recipient of foreign direct investment (FDI) in Latin America and
the eighth largest recipient in the world. The country is currently the fourth largest investor in
emerging markets and the largest investor in Latin America. Generally Government of Brazil has
an open attitude towards foreign investment. In general terms, 100% foreign ownership is
possible. The country is suitable for investment because it has extensive raw materials, a large
pool of workers at all levels of education, a large domestic market and a diversified economy.
3.70%
4.90%
4.60%
5.50%
5.80%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
2014 2013 2012 2011 2010
Percentage
Year
POVERTY TREND at $1.90 a day
POVERTY TREND (BY
INTERNATIONAL
STANDARDS)
43. Page 42 of 50
The government encourages foreign investment in the form of tax exemption, aid, etc. The
country has 8 free economic zones where foreign investor can invest easily. But there are also
some restrictions on foreign ownership of financial institutions, communications companies,
entities in certain other strategic sectors and rural land.
Potential sectors for foreign investment: There are some sectors which are potential for
foreign investment such as Agriculture, mineral ores, iron and aluminum, textile, aeronautics,
pharmacy, automobile, iron and steel and chemical sectors. The Brazilian government launched
the Logistics Investment Program (PIL) to attract investment for infrastructure development.
Source: https://en.portal.santandertrade.com/establish-overseas/brazil/foreign-investment
Interpretation: Foreign direct investment (FDI) in 2013 was USD 64 billion but after that it
was decreasing last few years. In 2014, 2015 and 2016 respectively FDI is USD 62 billion,
56 billion and 50 billion. That means the FDI trend is downward in Brazil.
0
10
20
30
40
50
60
70
2016 2015 2014 2013
50
56
62 64
USD in Billion
Year
Foreign directinvestment(FDI)
Foreign direct investment(FDI)
44. Page 43 of 50
Ease of doing business:
Source: https://tradingeconomics.com/brazil/ease-of-doing-business
Interpretation: As we know, the Ease of Doing Business index is based on business Procedures,
time, cost and minimum capital to open a new business, Dealing with construction permits,
Getting electricity, Registering property, Getting credit, Protecting investors, Paying taxes,
Trading across, Enforcing contracts and Resolving insolvency.
According to the World Bank annual ratings, Brazil is ranked 123 among 190 economies in the
ease of doing business in 2016. Best ranking for the country was 111 out of 190 economics in
2014. We can see that every year 2012 to 2016, the country’s ranking is getting poor which is
concern for those want to start a business in Brazil.
Trade regulations:
123
121
111
116
118
104
106
108
110
112
114
116
118
120
122
124
2016 2015 2014 2013 2012
Rank
Year
Rank of Ease of Doing Business
Rank of Ease of Doing
Business
45. Page 44 of 50
Brazil has high tariffs, an uncertain customs system, high and unpredictable tax burdens, and a
complex legal system. The Brazilian Government introduced a series of rules aimed at avoiding
the undue transfer of profits through transactions conducted between multinational companies
and their parents or associates abroad. Brazil's main trade instrument is the tariff, whose structure
and level are largely determined by a program of convergence towards MERCOSUR's Common
External Tariff (CET). In this country, one of the assumptions underlying transfer pricing
calculations by Brazilian entities is that such calculations must be made in Brazilian reals. The
PRL method which is applicable to imports requires that a local entity reports a statutorily
predetermined gross profit generated by goods, services or rights imported from related parties
when resold to third parties. The Brazilian taxation system establishes that Import duty is
payable on the entry of foreign goods into the country which are destined for internal
consumption.
Economic Freedom index:
Source: https://knoema.com/atlas/Brazil/topics/World-Rankings/World-Rankings/Index-of-
economic-freedom
52.9
56.5 56.6 56.9 57.7
70.1 69.7 68.4 68.8 70.3
0
10
20
30
40
50
60
70
80
2017 2016 2015 2014 2013
Scoreoutof100
Year
Economic Freedom Index
overall score
property rights
government integrity
tax burden
government spending
business freedom
labor freedom
monetary freedom
trade freedom
investment freedom
financial freedom
46. Page 45 of 50
Interpretation: Here we see that the Brazil is ranked 140 out of 180 countries. The overall score
of Brazil was 57.7 in 2013 and 2017 is 52.9 which is decreased every year. In 2017, tax burden
has highest score that is 70.1. In other years, tax burden has highest score expect 2013. Most
importantly their investment freedom score is well below their overall score which is concern for
the investors.
3.12 Major exports and trading partners
Source: http://atlas.media.mit.edu/en/profile/country/bra/
Interpretation: From this graph we can say that Brazil exports mainly in China and United
States and exports less in Belgium. And the percentage was in China 19%, in US 12.60% and in
Belgium 1.70%, and it exports averagely in the other countries.
3.13 Education and literacy levels
19%
12.60%
7.20%
5.60%
2.60% 2.50% 2.20% 2.10% 1.80% 1.70%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Percentage
Country
Major exports and trading partners(2016)
Percentage
47. Page 46 of 50
Source: http://www.indexmundi.com/g/g.aspx?c=br&v=39
Interpretation: By this graph we can say that, the percentage of literature rate in 2010 was
90.379%, which means percentage of educated people was less. But in 2015 literature rate were
92.587. This means the percentage has increased, and it also indicates that Brazil is going to
improve its overall state.
3.14 Availability of skilled labor, labor costs:
90.379
91.411
91.338
91.484
92.587
89
89.5
90
90.5
91
91.5
92
92.5
93
2010 2011 2012 2013 2015
Percentage
Year
literature rate
literature rate
57.06%
57.33%
57.07%
55.99%
55.73%
54.50%
55.00%
55.50%
56.00%
56.50%
57.00%
57.50%
2011 2012 2013 2014 2015
Percentageoflaborforce
Year
labor force participation rate
labor force participation rate
48. Page 47 of 50
Source: https://tradingeconomics.com/brazil/labor-force-participation-rate
Interpretation: From this chart we can see that in 2012 percentage of labor force was more than
2011 and 2013. And in 2014-2015 labor force rate was comparatively less than 2011-2013. So,
we can see that the percentage of labor force have decreased by 1.6 percent from 2012 to 2015.
Labor Force:
Source: http://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=BR
Interpretation: We can say that the workforce or labor force (labor force in American English;
see spelling differences) is the economics. Labor pool in employment. It is generally used to
describe those working for a single company or industry, but can also apply to a geographic
region like a city, state, or country. So in 2014 the labor force has increased by 106.005 million
and in 2010 it was only 102 million.
Labor Cost:
106.005
104.162
103.211
101.917 102
99
100
101
102
103
104
105
106
107
2014 2013 2012 2011 2010
Inmillion
Year
Labor force, Total (in million)
Labor force, Total (in million)
49. Page 48 of 50
Source: https://tradingeconomics.com/brazil/labour-costs
Interpretation: In 2012 labor cost index was 153.17, in 2013 it was 152.11, in 2014 it was
158.89, in 2015 it was 130.48 and in 2016 it was 124.59.
3.15 Membership in regional economic and trading blocks:
Brazil is part of multiple trade blocks, especially concentrated in South America. Brazil is the
member of the ALADI economic blocks. ALADI stands for Asociacion Latinoaericana de
Integracion which is Spanish for Latin American Integration Association and is the earliest trade
block in Latin America, created in 1980. There are actually 13 members in ALADI: Argentina,
Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Nicaragua, Paraguay, Panama, Peru,
Uruguay, and Venezuela.
ALADI treats countries differently according to their development level and works towards the
creation of a Latin American common market, through means of different mechanisms such as
the Regional Tariff Preference, which gives international trade tariff benefits to its members.
Mercosur:
0
20
40
60
80
100
120
140
160
2016 2015 2014 2013 2012
124.59
130.48
158.89
152.11 153.17
Indexpoint
Year
Labor cost
Labor cost
50. Page 49 of 50
Mercosur stands for Mercado Comundel Sur which is Spanish for Southern Common Market. It
is the most successful economic trade block in which Brazil participates. It was originally
formed by Argentina, Brazil, Paraguay and Uruguay in March 1991 who is still full-time
members.
Its main objective is to promote the integration of its members by means of free circulation of
goods, services and inputs. It also seeks to amplify trade between its members as well as trade
with other countries located outside of it. It is the most active of the regional blocks of which
Brazil is a member has accomplished many important measures especially regarding interstate
mobility of its citizens. It is also possible for citizens of Mercosur members to travel freely
between Mercosur countries with only their National Identification Document.
Most important thing is that Mercosur also holds multiple trade agreements with other countries
and trade blocks. A Free Trade Zone was created between Mercosur and the Andean Community
of Nations in 2004. Foreign exchange between members of both trade blocks amounted to
around USD 25 billion in 2013.
51. Page 50 of 50
Reference:
Brazil:ForeignDirectInvestment,billiondollars(2017). Retrievedfrom -
http://www.theglobaleconomy.com/Brazil/fdi_dollars/
CORRUPTION PERCEPTIONSINDEX2016 (2016). Retrievedfrom-
https://www.transparency.org/news/feature/corruption_perceptions_index_2016
Brazil (2017). Retrievedfrom-http://data.worldbank.org/country/brazil
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