What to expect for 2014 for Brazil according The Economist

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Introduction

The Economist, the renowned English magazine wrote an article about how unpredictable the year of 2014 will be for Brazil. So, what to expect for the year 2014 for Brazil?


brazil futuro

Elections

The Economist, mentions in their edition that in 2014 Brazil will have to face an “unpredictable election,” mainly due to the wave of demonstrations that hit the country during the month of June in 2013.

Dilma Roussef’s (Brazils president) popularity also fell during the demonstrations, but she has recovered her strength since then. The Economist also pointed out that 2/3 of the voters wish that the next president work on changes, that were proposed during the demonstrations.Further, the magazine adds that the candidates competing against Dilma have an excellent chance to attack the government. The arguments for it are:

  • Since Dilma took over in 2011, the unemployment rate remains low, but the creation of jobs and the high wages are now growing at slower pace than before,
  • The inflation rate remains high.
  • Tthe public finance is deteriorating and there is no way to fix it during an election year.

World Cup

the future

The World Cup can represent a threat for Dilma’s mandate.

The demonstrations, coincided with the Confederations Cup, with activists and protesters reporting the high and abusive cost of the construction of stadiums.  Furthermore the Brazilian infrastructure in the hosting cities remains poor, and have not gained any benifit, as promised by the government, when Brazil won the World Cup bid.

In spite of all reservations, The Economist believes that Dilma will be a tough opponent, hard to beat during the next elections which will happen in October 2014.


What are the pros of Dilma’s government

  • As of the measures taken by the president to “secure” her position, for another 4 year term, the “Bolsa Família” and the “Mais Médicos” programs are strong and important programs approved by a large percentage of the Brazilian population.
  • Bolsa Família is a social welfare program, that seeks to vanish poverty by doing cash transfers to Brazilian families living under very poor conditions.The other program called “Mais Médicos”, which literally means “More Doctors”, is a program that started in June of 2013.
    This program was created to fill the gap existent in Brazil with the lack of doctors in poor areas. The program “imported” doctors from other countries. Cuba, in particular, was the country that Brazil received more doctors from.
  • Over the past years, as already mentioned, the government was able to take 27 million families out of a poverty condition. Credit has expanded, and more people were able to achieve things they wouldn’t be able to do 10 years ago. To see and understand in depth how the middle class has changed over time in Brazil please read the article Uncovering the new Brazilian Middle Class

My Conclusion

Personally I wouldn´t give too much attention or credit to what the mainstream media says. They are generally pessimistic and therefore need to publish and sell their content. The Economist, surely has a credibility, but I still question who is writting all these articles, and if this person who is sitting behind his desk and write these articles has ever lived Brazil or knows any business matters there.

Just as a reminder, The Economist, in 2010, played with the picture of the Christ, as if it was taking off like a airplane, giving the “great economic moment sensation” Brazil was living at that very moment. Last year, however, they played with the Christ, flying as if it was masterless. It is important to remember that the whole World is facing a different economic moment, and eventhough Brazil hasn’t shown spectacular numbers, it is doing better than most of the countries.

I believe that whenever you look at the economy of a country, you should always look for detailed and in depth information. Brazil for instance, must be considered several countries within one country. Simply because there are 27 states with nearly 200 million people, with very different habits and cultures inhabiting the same country. Also, there is a rising and very “hungry” middle class willing to consume. In case you still doubt of what I’m talking about, please watch my interview with Mr. Rolf Andersen, a Danish CEO living in Brazil for a few years: http://www.youtube.com/watch?v=tvTUpB4s9F4

Brazil indeed needs better infrastructure, a “healthy” healthcare system, better airports, etc. There are tons of opportunities and possibilities for Danish companies to tap into the Brazilian market with knowhow, technology, etc. and make a difference. Is it easy? No, it is not – but it is definitely possible.

 

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Carlos Monteiro is a Brazilian citizen, graduated in Business Administration by the Catholic University of São Paulo. He lives in Odense, Denmark with his Danish Wife, Cathrine, and their half Danish /Brazilian daughter Ines Marie. You are very welcome to be in contact him at any time.

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