Today Denmark Brazil provide knowledge on the service sector in Brazil. Hopefully by the end of this article you will be more savvy on the Service Sector in Brazil. Additionally in the very end of this article I have found and posted the ammount of services Denmark imports to Brazil. You will also see that Denmark lags behind Sweden and Norway in the ammount of services exported to Brazil.
The Service Sector in Brazil. A Brief Outlook for the Danish community
The majority of imports and exports in Brazil in 2012 was mainly represented by the trade in goods. In fact the trade in goods has a significant representation in the Brazilian trade balance, nonetheless the participation of services has increased notably, over the past few years.
Source: The Brazilian Ministry of Trade and Development-2012
As shown in the sheet, the imports of services has been 6,5% superior than the imports of services in 2011. According to Brazilian Development and Trade Ministry between from 2008 untill 2012 the ammount of services in the Brazilian trade balance has increased in 75,1%
The Brazilian Services Account
The Brazilian services account presents a historical deficit. According to the Ministry of Trade and Development this factor can be attributed mainly to three sub-accounts:
- International Travel
- Rental of Equipments
More people are traveling nowadays. As the Brazilian middle class has expanded, more people are traveling abroad.This means that more people buy their things overseas, as well.
The negative performance of Brazil´s transport is justified by the government under the argument that Brazil is a huge agricultural and mineral exporter.
Rental of Equipments
The government justifies the growing deficit in the equipments account due all the infrastructure investments that are being implemented in the country. The main project is known as PAC, which stands for the Growth Acceleration Plan and it seeks to improve the Brazilian Infrastructure in several segments.
The Performance of Brazilian Trade Services in the International Scenario.
Brazilian imports over the past few year have increased above the world average and according to the Brazilian Ministry of Trade and Development, Brazil has reached the 17th position in the ranking of major importers of the world.
The first position as major service importer comes USA ( 405,9 USD Billion) followed by Germany (285 USD Billion), then China ( importing 281 USD Billion) and occupying the 4th position the UK ( importing 176 Billion).
Brazilian service imports were in the order of 78 USD Billion.Below you see a graph with the value of service imports untill 2012.
The main Brazilian Commercial Partners.
In order to explain who are the main Brazilian commercial partners, I´ll first divide it into imports by economic blocs.
Accounting for roughly 47,6% of the imports of services comes EU in first place. The USA was responsible for 31,4% , The Mercosur countries ( Brazil,Argentina,Venezuela,Uruguay,Paraguay and Bolivia) were responsible for 3,7% of the service imports, Latin America ( except Mercosur) for 1,5% and Other Countries 15,6%.
Below you can see the breakdown per economic block containing the destinantion of payments of the Brazilian Imported Services.
Below you can see a figure with the destination of payments of imported services per country. Note that Denmark lags behind Sweden and Norway. Danish imports of services in Brazil is still very low compared other Scandinavian countries.Sweden, even having a “small participation” exports services to Brazil twice as more than Dk, and Norway nearly seven times more, not only in quantity but also in value
Let´s now have a look at what the Brazilian main commercial partners are selling to Brazil. Perhaps these data can shed some light on Danish decision makers.
The first sheet contains the imports from the USA with it´s respective values in Millions of USD and how much each segment represented in the total share of the country
Imports from The Netherlands
Imports from The UK
Imports from Norway
Now, if you have a look at what these countries are selling to Brazil, they are all selling what DK could also sell to Brazil, right?. For instance,Lets have a look at Norway. Norway is selling aerospace services, water transportation products,infrastructure projects, architecture and engineering services and analysis. As far as I´m concerned Danish companies are pretty good and competent in those fields.
I believe the main reason why Danish business man aren´t investing or importing more to Brazil yet, is due the lack of knowledge about Brazil.Let me be more clear about it. When I mean lack of knowledge, I mean lack of information on the Brazilian Market, the Brazilian culture and its business environment.
I´m not trying to sell Brazil as a wonder land. In fact Brazil is an extremely burocratic country, things take time to happen and understanding the Brazilian culture and people is key to thrive.
Recently Brazil was awarded by the World Bank as one of the hardest countries to do business. The main reasons are the ammount of time spent in having to pay taxes, the enomous ammount of time to set up a business, all the bureocracy,etc.
I hope this article was interesting for you.
Let me know if I missed out on something.