Brazil Inc

Brazil Inc

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Lessons from Brazil: Why Is It Bouncing Back While Other Markets Stumble?

From Knowledge@Wharton

"Of historic importance." That is how Dilma Rousseff, Brazil's chief of staff, described the country's victorious bid in early October to stage the 2016 Olympics in Rio de Janeiro. Rousseff — a likely candidate in next year's presidential elections — declared that "Brazil was no longer a country of the future," referring to a popular saying Brazilians use to describe their homeland after decades of missed opportunities despite vast economic potential. Rather, she said, Brazil is now a country "of the present" — a view shared by many as revelers packed Rio's beaches to celebrate the victory.

Brazil's business community is happy, too. Márcio Garcia, an economics professor at the Catholic University of Rio de Janeiro (PUC-Rio), says that not since the hyperinflation of the 1980s was tamed briefly by the 1986 Cruzado plan (which froze wages and prices, among other measures) can he recall such an upbeat mood in Corporate Brazil.

The mood largely reflects a turnaround in global sentiment toward the country, which has been both rapid and welcome. But as the country bounces back from the global economic crisis — it was the first country in Latin America to stage a recovery, in the second quarter of this year — what can other markets, still struggling with sagging economies and lingering recession, learn from its remarkable recovery?

Indeed, Brazil has witnessed ups and downs in its global reputation before. During the 2002 presidential campaign, debt spreads skyrocketed and the currency devalued as investors fretted whether Luis Inácio Lula da Silva, one of the frontrunners, would honor the country's debt obligations. There was relief when it became clear after he won that he would consolidate the generally sound policy orientation of the previous administration, sparking a rally that paved the way for a growth spurt not seen since the 1960s.

That growth trajectory, however, was interrupted by the escalation of the global credit crisis a year ago. >>> Go to Full Story >>>

 

Rio Wins the 2016 Olympics: Now For the Hard Part

By ANDREW DOWNIE | Time

Rio de Janeiro is rightfully and proudly celebrating a historic victory: being named the host city for the 2016 Summer Olympics, the first South American city to host one of humankind's truly global extravaganzas.

If all goes right, it will be a most memorable celebration. Athletes will participate either in or close to world famous icons such as the Maracana soccer stadium, the spiritual home of the "beautiful game," and bodacious Copacabana beach. Some events, like rowing or triathlon, will take place in the shadow of Sugarloaf mountain and the outstretched arms of Christ the Redeemer. Ah, but note that conditional: if all goes right. There is much preparation and building to do. And if it all doesn't go right, the Olympic celebration is likely to lead to much recrimination.

Cariocas, as the residents of Rio call themselves, are still reeling from the cost of the last big athletic event held in their city. The budget for the Pan American Games of 2007 was $177 million. It probably cost several times that at the end (some reports estimate it at close to $2 billion). For the biggest athletic event of all, the Rio Olympic organizing committee has set its budget at $2.82 billion, with another $11.1 billion going to related expenses such as transport, power and security. (Another $170 million has been set aside for the Paralympic Games which usually follow right after the Olympics.)

There are eight existing venues that need to be renovated in time for the Games, including the João Havelange Stadium where the track and field events will take place. Three of the venues are new, built for the Pan Am Games; however, they do not meet the IOC's size or technical standards. The velodrome for track cycling, the aquatics center for diving and water polo and the João Havelange Stadium all need extensive work. The existing sites for archery, sailing, rowing, equestrian, shooting, kayak and rowing, as well as the route of the marathon also need work. All told $200 million has been set aside for upgrades.

Meanwhile, another 11 permanent venues costing an estimated $674 million are to be constructed for basketball, judo, taekwondo, wrestling, handball, modern pentathlon, fencing, tennis, swimming and synchronized swimming, canoe and kayak slaloms, and BMX cycling. Then, at least $78 million will be spent on seven temporary structures for beach volleyball, triathlon, marathon swimming, race walking, road cycling, weightlifting, hockey, mountain biking and modern pentathlon. Rio has promised to spend $427 million on an athlete's village that replicates "the outdoor lifestyle of Rio's beachside neighborhoods" (and no doubt swings to the sounds of samba and bossa nova). And, for an even greater taste of Brazil, a dedicated shuttle bus will take athletes to a beach set aside exclusively for participants. >>> Go to Full Story >>>

 

LATIN AMERICA: Driving Toward Sustainable Business Advantage

TRANSEARCH International

Like many other regions impacted by the global economic crisis, investors and business executives across Latin America have been forced to recalculate expectations of return on investment and corporate earnings.

Download the complete white paper here: Latin America Executive Outlook

 

Economic Survey of Latin America and the Caribbean

Economic Commission for Latin America and the Caribbean

The publication of the sixty-first edition of the Economic Survey of Latin America and the Caribbean, corresponding to 2008-2009, comes at a critical point in the economic development of the Latin American and Caribbean region.

Download the complete publication here: Economic Survey of Latin America and the Caribbean