The Brazilian model of sustainable development – based on robust growth with income distribution and social inclusion, job creation, as well as environmental protection – has transformed the country into an economic powerhouse and a global reference.
Relying on abundant natural resources, a diversified industrial base, a thriving service sector and the world´s most competitive agribusiness, Brazil has experienced an average annual growth of 4.2% in 2007-2011. The country´s international reserves expanded 21.9% in 2011, totaling a record sum of US$ 352.01 billion.
The combination of a growing domestic demand, innovative social policies, strict control of inflation, fiscal policy soundness, massive investments in infrastructure projects and the generation of jobs saved Brazil from the worst effects of the current global economic crisis. Endowed with natural resources, a diverse industrial base, a flourishing services sector and arguably the most competitive agribusiness in the world, Brazil grew an annual average of 4.2 percent in the 2007-2011 period.
The improvements in Brazil´s macroeconomic foundations, the record level of international reserves, the inflow of foreign exchange, the improvements in social indicators, the decline of the country´s risk, the control of public accounts, the increase in the availability of credit lines and the internationalization of Brazilian companies and major public investments in infrastructure are some of the factors that help lift the Brazilian economy and rank it upwards in the international scene.
Thanks to its sound economy, modern cities and good infrastructure, Brazil has become an attractive destination for international investments. Furthermore, the country´s entrepreneurial community increasingly seeks to expand their business abroad.
In 2011, Brazil´s foreign trade registered a record trade flow of US$ 482.3 billion, a 25.7% increase on the results achieved in 2010, when it reached US$ 383.7 billion. The country´s exports and imports also reached record levels in that period, totaling US$ 256 billion and US$ 226.2 billion, respectively. In 2010, Brazil´s exports grew 26.8% and imports, 24.5%. Such expressive figures indicate the soundness of Brazil´s continuous insertion in the international market.
The world´s fifth economy by 2014
Over the past decade, 40 million Brazilians have climbed the social ladder. For the first time in Brazil´s history, more than half of its population has joined the middle class, a phenomenon which adds to the robustness of the domestic market. According to the Brazilian Institute of Geography and Statistics (IBGE), the current unemployment rate oscillates around 5%, a record low.
According to World Bank forecasts, Brazil should become the fifth largest economy by 2014.
ECONOMY AND SOCIAL INCLUSION
The new cycle of economic development results in an expanded mass consumer market and increased social equality, an environment of institutional stability and increased social cohesion.
Nearly 40 million Brazilians experienced significant improvements in their life conditions. Today, more than half of the population belongs to the middle class. No country with the same territorial dimensions as Brazil has promoted social mobility in such levels.
Economic development has been accompanied by significant gains in the social area, with a strong reduction of poverty and inequality. In the last decade, the per capita income of the poorest grew at a rate of more than 7 percent per year, while the income of the 10 percent richest increased by 1.5 percent per year. The decline in extreme poverty rates was three times faster than necessary to achieve the first Millennium Development Goal.
The reduction of poverty and inequality, and the expansion of the middle class are anchored in the implementation of public policies for protection and social promotion, allied to the opportunities that sustained economic growth has brought to Brazilians. The country invests in a wide and multidimensional social agenda, built in partnership among the three levels of government: federal, state, and municipal.
Brazil´s virtuous cycle of sustained growth is based on massive investments in urban and social infrastructure.
In early 2007, the Brazilian Federal Government launched the Growth Acceleration Program (PAC), which organized and defined investments in logistics, energy, and social and urban infrastructure projects for the next four years. Almost US$ 400 billion were envisaged for the first four years of the program implementation. PAC not only resulted in direct improvements for the Brazilian population, but also helped the country to raise employment and income levels, keeping the pace of economic activity even after the 2008 crisis.
A second phase of PAC was announced in 2010. Besides contributing to the maintenance of the growth cycle, PAC 2 aims to enhance the competitiveness of the economy. The new phase includes the completion of civil works in progress and almost US$ 500 billion dollars in new investments between 2011 and 2014.
Brazil counts on a wide transportation infrastructure network, comprising airports, ports, railroads, waterways and highways. The Brazilian Government, jointly with members from the public and private sectors, developed the National Plan for Transportation Logistics (PNLT) with the aim of balancing the Brazilian transportation matrix (based primarily on roads) and granting more competitiveness to the country´s logistic performance. The plan consists of a tool for strategic organization, featuring an integrated understanding of territory and development, aiming at increasing the use of railroads and waterways, which are more economically efficient and demand less energy consumption.
The change in the Brazilian transportation matrix shall secure a 38% increase in energy efficiency by 2025, and also a 41% reduction in fuel consumption, 32% reduction in CO2 emissions and a leap in cargo transportation, jumping from 851 to 1,510 tonnes carried per kilometer (TKU).
Brazil´s port system is subject to constant public investment inflows. The sector received investments of R$ 1.5 billion in 2007-2010.
Brazil has 50 public ports.
42 terminals for private use.
3 port complexes which operate under concession for the private sector.
Ports currently move 700 million tonnes of merchandise which account to 90% of Brazilian exports.
31 international airports
38 national airports
2,500 airports with capacity for small aircrafts
Additionally, Brazil counts on four industrial airports:
Galeão Airport, in Rio de Janeiro (RJ).
Tancredo Neves Airport, in Belo Horizonte (MG).
São José dos Campos Airport (SP).
Petrolina Airport (PE).
Companies located in these areas are in a zone of fiscal neutrality, under a special customs clearance regimen and exempt from paying taxes when importing components or exporting goods. Exceptions may apply to the imports of finished goods to de sold in the domestic market.
With 30 thousand kilometers in length, the railroad system in Brazil is the largest in Latin America and the 11th worldwide in terms of cargo transportation, accounting for 162.2 billion tonnes carried per kilometer (TKU).
With 1.7 million kilometers of roads, the Brazilian highway system crosses all Brazilian states and is currently the third largest in the world, according to estimates from the Ministry of Transportation. Development and modernization projects are supported by continuous Federal Government investments and Public-Private partnerships (PPPs).
FDI - BRAZIL COUNTS ON A SAFE INVESTMENT ENVIRONMENT
Brazil has been attracting increasing volumes of investment in economic sectors that are crucial to the sustained expansion of the economy, such as transport, energy, sanitation and housing infrastructure. Besides expanding productive capacity, this process stimulates job creation and increases domestic consumption.
A favorable business environment coupled with a positive outlook on the domestic market and the export sector has contributed to increase productive investment.
On the international scene, a report of the United Nations Conference on Trade and Development (UNCTAD) shows Brazil among the five top destinations for Foreign Direct Investment (FDI) in the coming years. In 2011, the net flow of FDI in Brazil reached a record volume of US$ 66.7 billion dollars, an increase of 37.8 percent compared with the previous year and of 157 percent compared with 2009. According to estimates from Brazil’s Central Bank, FDI inflows are expected to reach US$ 50 billion dollars in 2012, demonstrating a continuously high market confidence in the Brazilian economy.
Brazil wil also host the next two sporting mega-events – the 2014 World Cup and the 2016 Olympic and Paralympic Games –,opening a wide range of services and major infrastructure projects.
The Brazilian industry, which is under constant modernization, ranges from motor vehicles, steel and petrochemicals to computers, aircrafts and durable consumer goods. Both Brazilian companies and multinationals based in Brazil have been heavily investing in innovation, new equipment and technology. A leader in deep-water oil drilling, in the manufacturing of mid-sized aircrafts, in agricultural technology for tropical weather and in the use of ethanol on a commercial and sustainable scale, Brazil also counts on a diversified and sophisticated services industry.
Brazil congregates potential, creativity and innovation, also relying on the dynamism of its industry and on socially and environmentally sustained development.
Plano Brasil Maior encourages innovation
Plano Brasil Maior is the government´s industrial, technological and foreign trade policy which aims at promoting innovation and the productive strengthening of Brazil´s industrial parks, securing sustained productivity gains.
Monetary stability, recovery of investment and growth, job creation, real wage appreciation and the drastic poverty reduction have paved the way for the country to advance towards an enhanced development stage.
The Plan comprises relevant measures for credit growth and improves the regulatory framework for innovation, increasing the scope of fiscal incentives and facilitating credit lines in order to add value and competitiveness to Brazil´s productive chains.
Relying on a large and vigorous market, the country mobilizes its productive forces in order to innovate, compete and grow. The purchasing power strengthened by inclusive policies, the untapped potential of energy resources, the young labor force and the entrepreneurial creativity are institutional assets which, combined with unique natural and social resources, add to the development of a Bigger Brazil.