Por: Max Gorissen
I am very excited that Rio de Janeiro, best known for its Carnaval celebrations and its famed Copacabana and Ipanema beaches, last week bested bids from Chicago, Madrid and Tokyo to become the first city in South America to host the Olympics.
This is a very positive signal, not only for Brazil, but for other global emerging markets as a whole, and it is more evidence that Brazil has arrived as a strong power on the global economic scene.
Brazil fast economic recovery, the mentioned win by Rio de Janeiro to host the Summer Olympics in 2016, the Brazilian upgrade to a safe investment place in the world, according to Standard & Poor’s risk rating, reinforces the perception of the sound direction Brazil has taken, showing the international trust in the country and in its capacity of attracting new investments.
Together with another popular sports event to be hosted in Brazil, the World Soccer Cup in 2014, the country is starting preparations to welcome and act as home to thousands of athletes and spectators over the games’. This means nearly every sector that’s tracked by local and international investors stands to benefit in some way from Brazil’s massive undertaking, which could bring in as much as $51 billion (R$ 90 billion) in new investments, by some estimates, including indirect investments and its long-term impacts.
In my view, if you are an international company, you must take this one time opportunity and capture some of these World Cup and Olympics-related outlays and start or increase your local operation.
The impact of the Olympics will reach beyond the games’ run in August, as host regions generally enjoy the results of urban development and increased media exposure.
Executives and investors expect that businesses in Brazil improve with the inflow of new foreign investments, reduction of financing costs, speedup of mergers, acquisitions and initial public offerings and a larger quantity of private equity transactions.
In my humble opinion, Brazil became part of the “club” of the most respected countries.
Due to the solid economic politics in recent years, Brazil controls the inflation (around 4% a year), accumulates almost US$ 200 billion of foreign reserves and records a drop in public indebtedness, concerning its Gross Domestic Product, which fell from 50.46% in 2002 to 41.24% in March this year.
The economy has recorded positive rates of growth, as well as and uprising of productive investments.
Impressed? Give me a call and let’s talk about establishing or enhancing your company presence in Brazil.