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US Economic Recovery Boosts Brazilian IT Exports

Brazilian IT companies expect to increase their exports this year due to the recovery of the US economy and local currency devaluation, which has made their products more competitive. In 2012, the Brazilian software and IT service exports totaled US$ 2.2 billion, 14.67% higher than in 2011, according to the survey published by the IDC and Brazilian Association of Software Companies (ABES). In 2013, analysts estimate that Brazilian exports increased between 12% and 14%.

“For this year, we should repeat the same performance as last year and export growth will exceed domestic market rates”, said Jorge Sukarie, Abes CEO. The IDC forecasts a growth of 9.2% for the Information and Communication Technologies (ICT) sector this year.

The main markets for Brazilian software exports are Mexico, with a 14.1% share, Colombia (7.7%), the United States (7%) and Argentina (6.3%). The US accounts for almost 39% of the IT market and it is one of the main destinations for Brazilian exports, especially in the services area. Read the whole story here.

Volkswagen to Invest $4.25 billion in Brazil

The WSJ reports German auto maker Volkswagen AG plans to invest 10 billion Brazilian reais ($4.25 billion) in its operations in Latin America’s largest nation in the 2014-2018 period to develop new vehicles and new technologies, the company said in a news release over the weekend.

Brazil is the fourth largest consumer market for Volkswagen behind China, Germany and U.S. The investment program for the period represents an increase in the previous investment plan for the period between 2012 and 2016, which totaled BRL8.7 billion.

“The investment program shows our confidence in Brazil and shows that we are advancing in the modernization of our products,” said Volkswagen do Brasil Chief Executive Thomas Schmall.

The massive investment planned by Volkswagen comes at a challenging time for the vehicle industry in Brazil.

Yearly vehicle sales fell for the first time in a decade in 2013, even as output in Brazil’s auto industry was temporarily boosted by government incentives aimed at strengthening local production and boosting exports.

Brazil vehicle sales declined last year to 3.77 million vehicles from a record of 3.8 million autos sold in 2012, according to auto-maker association Anfavea. Inflation’s erosion of consumer spending power, together with rising interest rates, a volatile currency and disappointing economic growth, crimped vehicle purchases.

Dilma Front-Runner for October Elections

Wall Street reports Brazil’s President Dilma Rousseff remains the clear front-runner to win re-election in October, according to a new poll, but many voters nonetheless say they want a clear change of direction.

A poll by the Ibope polling institute showed that Ms. Rousseff has reestablished a firm level of support that had been lost following mass street protests in the middle of last year, when millions Brazilians took street to demand an improvement in quality of life and better public services.

The Ibope poll showed that Ms. Rousseff does best in the most likely scenario, in which she would face Aecio Neves, of the Brazilian Social Democracy Party, or PSDB, and Eduardo Campos, of the Brazilian Socialist Party, or PSB, and governor of Pernambuco state.

In that event, 43% of respondents said they would vote for Ms. Rousseff, which would likely be enough to secure her a comfortable first-round win, according to the poll. Mr. Neves would secure 15% support, and Mr. Campos would come in third with just 7% support.

Despite the president’s comfortable position, pollsters say there is room for the picture to change. The first is a desire for change among many Brazilians and the other is that pollsters say the election campaign only really gets going once the campaigns take to the television with debates and advertising.

According to Ibope, 64% of respondents said yes when asked whether they wanted a major change of course by the next president.

read more here.

 

Digital Textbooks to be available in Brazil

Over the last decade, Brazil has “come online” in a big way. The percentage of people using the Web in Brazil leapt from 9 percent in 2002 to about 50 percent in 2012, according to the ITU. With 60 million Brazilians now using Facebook, thanks to increasing access to the Internet and the rise of social media, the country is undergoing a digital transformation — and with that comes a slew of exciting opportunities for startups.

However, usually when it comes to growth potential, Brazil’s eCommerce market gets most of the attention. Nonetheless, a flurry of noteworthy developments over the last six months have begun to make it clear that another big market (and opportunity) is quietly emerging in Brazil: Education technology.

While Google and Apple have made sizable strides in education in the U.S., and chip makers like Intel have begun to reveal EdTech aspirations, Amazon’s plans have been less clear. But with its announcement yesterday, we now have an idea, and it looks to start (at least in part) with Brazil. Though the textbook industry is a fragmented market in the U.S., Jeff Bezos and company see the thriving market in Latin America as a big opportunity for its textbook business.

According to BetaNews, Amazon has landed a major contract with the Brazil’s Ministry of Education, which will see it work with the country’s educational development fund to convert and distribute textbooks to schools across Brazil. The pair have already begun to digitize more than 200 textbooks and distribute them to hundreds of thousands of Brazilian educators through Whispercast.

Amazon claims that over 40 million digital textbooks have already been distributed through its service around the world, and, while it’s not yet clear what its targets are for Brazil, it no doubt intends to be a wide-scale roll-out. Read more here.

Consulate Holiday Closure

The Consulate General of Brazil will be closed on Friday, April 18th, 2014, for Good Friday. Please click here to see all the holidays observed by the office.

Property Investment on the Rise in Brazil

Brazil is the largest economy in Latin America, and is rapidly accelerating towards its predicted place in the top four economies of the world. It is also an extremely attractive market for property investors, for a number of different reasons.

Brazil has been attracting international property investors for a number of years now, and has grown from being “one to watch” to a hot, current investment opportunity. Tourist properties are among the most attractive options the company has to offer property investors. The country is already a popular tourist destination, and most investors and experts agree that its popularity with tourists will continue to grow in years to come. The country has high standards of living, more than 300 days of sunshine in the year, and over 2,000 miles of sunny beaches.

As a result, tourist properties are very much in demand. This demand looks set to not only continue in coming years, but to grow significantly. More and more people continue to flock to Brazil every year, and the government is actively committed to growing the country’s tourist industry. Brazil is expected to become one of the top tourist destinations in the world in the near future, and this will further increase demand on tourist properties, as well as the possibility of returns even higher than their current attractive levels.

Residential property in Brazil is also an attractive option for investors. Locally, the country has a huge housing deficit of between eight and ten million homes. Demand is particularly high in the country’s North Eastern region, which single-handedly accounts for an estimated third of this deficit. With the country’s population growth accelerating, this puts homes in consistently high demand. Due to the extent of the deficit and the rapid development of new builds to try and chip away the disparity between demand and supply, buying off-plan properties is an especially popular option in Brazil, and one that can prove especially profitable. Read the whole story here. 

Brazil Plans to Build Aircraft Carrier

Bloomberg reports that Brazil plans to build an aircraft carrier with a foreign partner as part of an effort to enhance its military readiness, Defense Minister Celso Amorim told reporters today.

“The idea is for it to be built in Brazil, probably based on an existing project,” Amorim told a group of foreign correspondents. Latin America’s largest country will require a new aircraft carrier within 15 years and will modernize its existing one in the meantime, Amorim said.

Brazil has stepped up spending on military equipment in recent years as it seeks to beef up its defense mostly of natural resources, from deep-sea oil to fresh water. “We are indeed a peaceful country, but no way will we be a defenseless country,” President Dilma Rousseff said last year.

In December the government chose Saab AB (SAABB) over Chicago-based Boeing Co (BA)and Paris-based Dassault Aviation SA (AM) to supply 36 jet fighters worth $4.5 billion. Until these are ready, Sweden may provide older model Gripens to the Brazilian Air Force, Amorim said.

Corporate Travel still Hot in Brazil

An article from supply management shows that Brazil is still a hot destination for corporate travel.

“Despite the relative volatility in Brazil, we have been encouraged by real GDP growth and a significant rise in Brazilian export volumes,” says Wellington Costa, president of GBTA Brazil. “As the global economy regains double-digit growth, we remain confident that Brazilian business travel spend will return to double digit growth this year. This is nothing but good news,” he adds.

The GBTA’s research also suggests that Brazil’s business travel market will surpass that of South Korea, France and Italy over the next few years.

Despite the social unrest and economic difficulties, businesses in the travel sector have not seen a drop in corporate travel spend. Client spending continues to be strong, and is increasing, according to Mario Hidalgo, alliance manager, LATAM at corporate travel provider Egencia. “Clients consistently spend above forecasted levels and previous years,” he says. “There are also no signs of significant measures for them to reduce their spend in the coming months.”

South America’s largest country is one of the most popular corporate travel destinations, with capital city Brasilia identified as the second most important destination for business’ growth, according to the Guild of Travel Management Companies. It bases 
its findings on business travellers’ views and analysis of travel management companies’ “round-trip” sales to growth economies.

Different figures, this time from Abracorp – Brazil’s Corporate Travel Agencies Association – show that the business travel sector grew by 13 per cent in the first six months of 2013. The association expects revenue of R$13 billion (£3.3 billion) this year, and companies within the sector are predicted revenues of approximately R$25 billion (£6.3 billion).

Travel providers are willing to invest in the country too. BCD Travel has forged a joint venture with Brazilian provider Avipam which will employ 300 people. Its aim is to create a strong presence in a market where its clients need to be, says Barbara Blue, BCD Travel president for Latin America.

Well connected

It is not just the large-scale events taking place in Brazil that have led to this positivity. “Brazil has been in the global spotlight for some years, with a very healthy growth in corporate travel,” says Hidalgo. “Global companies are expanding already in the Brazilian market, so I don’t believe the sporting events will change the current trend much. There might be some impact on specific business areas directly related to the events.”

One reason is its increased connectivity with the rest of the world. “Brazil to Asia, for instance, is a new corridor that will impact directly on the corporate travel business,” says Hogg Robinson’s Moane. “We also see many Brazilian companies expanding their businesses worldwide, from many different sectors – construction, food, oil and gas and technology among others.”

Hidalgo agrees: “Brazilian companies are becoming global; making acquisitions not only in Latin America, but all over the world.” On the other side of the coin, multinational companies are also consistently expanding their investments in Brazil. Read the whole store here.

Swiss Bank UBS to Restart Operations in Brazil

(Reuters) – UBS AG will restart investment banking operations in
Brazil as early as next week, sources said, almost five years after Switzerland’s biggest bank sold its highly profitable securities unit there following the global financial crisis.

Two sources, who are not authorized to speak publicly on the matter, said on Friday that UBS and Brazil’s central bank agreed on setting March 12 as the date to activate the investment-banking license.

Sought for comment, UBS said it would continue to focus on wealth management, client solutions and its sales and trading business, including equity research, in Brazil.

UBS is also trying to expand its financial advisory business in Brazil despite Chief Executive Officer Sergio Ermotti’s push to focus on wealth management globally and limit the use of lending to fetch deals. Read the whole story here.

 

U.S. Urges Brazil to assist with Peace in Venezuela

The United States’ long-standing travel and trade embargo against Cuba has left it with an image as a bully across Latin America, in the view of Cuban native Arturo Lopez-Levy, a former policy advisor for the Castro regime who now lives in Denver. Antonio Martinez II, a New York attorney who deals with international sanctions compliance, said the U.S. image was tarnished further by the Pentagon’s role in a 2002 coup attempt against late Venezuelan President Hugo Chavez.

“The fact is that the U.S. influence is not that great in Venezuela,” said Peter Hakim, president emeritus of Inter-American Dialogue, a Washington think tank on Western Hemisphere affairs. “The two countries most suited to shape Venezuela’s actions are Brazil and Cuba.”

Luiz Alberto Figueiredo, Brazilian minister of foreign affairs, has asked that the Venezuelan government and its opposition party begin a dialogue with one another. But Brazil has taken no direct action. Hakim said that’s just what the U.S. should urge.

Venezuela trusts Brazil, Hakim said, and it is in Brazil’s national interest to encourage stability in its neighbor.  Escalating protests and violence could lead to a mass migration of Venezuelans into Brazil, causing instability there and potentially damaging the economy.

Because Brazil has a strong relationship with Cuba, Hakim added, it might persuade Cuban leader Raul Castro to take on the role of peace maker.

Read the story here.