Brazil is the largest and most populous country in Latin America, and the fifth largest in the world in both area and population. The country possesses a developed agriculture as well as mining and manufacturing resources, Brazil also has a large service sector forces like the banking sector, attracting more and more American financial institutions. Brazil is the Mercosur's core economy, and one of the most promising emerging countries alongside with China, India and Russia. The country has a strong growth in services and commodities sectors and daily reinforces its international presence. Major export products include aircraft, coffee, vehicles, soybean, iron ore, orange juice, steel, ethanol, textiles, footwear, corned beef and electrical equipment. Tourism is also a large resource for its diversified locations. According to the International Monetary Fund and the World Bank, Brazil has the ninth largest economy in the world at Purchasing Power Parity and tenth largest at market exchange rates. The Federal Republic of Brazil is aiming at stabilizing its economy and operates large investments in new equipment and technology. From this point of view, it is crucial to consider Foreign Direct Investment as a major resource for the country's development and emergence.
[...] Then we will conclude with the challenges including social problems, barriers to trade and disadvantages in the trade system PEST Political Brazil's fluid political scene can make it difficult for investors to predict the direction of policy over the medium-term. Party loyalty is minimal, and it is the norm for politicians to change parties frequently over the course of a legislative term. Corruption is also endemic. Inevitably for such a vast and diverse country, regional and sectional interests often drown out consideration of the national interest. [...]
[...] Moreover, there are no restrictions or barriers on remittance of profits Challenges Given the size of its GDP and its natural resources, Brazil is underperforming in terms of FDI-attraction and could do much better. The Brazilian authorities have not structured their efforts to attract foreign investors. In other words, the strategy to attract them is insufficient, especially in comparison to what is made in Asia (e.g. in terms of education policy, Asia has been able to encourage high-tech investments, which is not the case in Brazil). [...]
[...] The program named Growth-Accelerating Program: 2007-2010 (Programa de Aceleração do Crescimento PAC) was launched by the Ministry of Finance and it is basically a set of government actions to: Stimulate private investment; Increase government investment in infra-structure; and Remove the main obstacles to economic growth (bureaucracy, inadequate norms and regulation) The PAC is organized in five blocks which are as follow: 1. Investment in infra-structure 2. Credit and long-term finance 3. Investment climate 4. Tax cuts and tax policy 5. [...]
[...] Investors can benefit from carbon credits obtained through initiatives in the areas of: Bio-fuels: ethanol and biodiesel (the Brazilian government has put strong effort on this sector and has it as a potential driver for FDI; Wind and solar energy; Brazil has privileged geographical conditions, with a guaranteed abundance of a wide range of natural resources. The country's agricultural research institutions are doing leading-edge work and reaching ever-higher yield levels. Another highlight is the progress made in mineral extraction, particularly in the oil sector. [...]
[...] Conclusion As a conclusion, there are many foreign direct investment opportunities in Brazil and the fact that it is a successful and large emerging country will gradually gather even more opportunities. It is a big world player, which still has to work on governmental action, law reinforcement, reduction of gap between wealth and poverty, and on aiming at a better educational system. Bibliography Ambassade de France au Brésil - Mission Economique, IDE et la présence française au Brésil en 2005 ainsi qu'au premier semestre September 28th 2006 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, World Investment Report 2006, United Nations, from Developing and Transition Economies: Implications for Development” New York and Geneva Mission économique de Brasilia, ‘'Mc Kinsey se penche sur les obstacles à la croissance du Brésil”, September 2006 www.braziltradenet.com, accessed on May 7th of 2007. [...]
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