Brazil: An Emerging Economy with Strategic Competitiveness
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With stagnant economies across the world, Brazil’s economy is growing at 7%–3 times faster than America. Brazil is a huge country being slightly larger than the continental US with vast expanses of airable farmland, an abundance of natural resources, and 14% of the world’s fresh water. With the world’s greenest economy, 80% of Brazil’s electricity comes from hydropower and it has the most sophisticated biofuel industry in the world. Brazil is already the world’s largest producer of iron ore and leading exporter of beef, chicken, orange juice, sugar, coffee, and tobacco. China has replaced the US as Brazil’s leading trade partner. Brazilian’s contend that their size can match China’s dragon-like appetite and they need Brazil to fulfill the Chinese needs. Batista, with Chinese investment, with interests in mining, transportation, oil, and gas is building a huge super port complex north of Rio that will accommodate the world’s largest tankers and speed delivery of iron ore and other resources to Asia. Commodities are not all that’s driving the Brazilian boom—Brazil has a substantial manufacturing base and a large auto industry. The world’s third largest aircraft manufacturer also resides in Brazil. Batista says that the one thing Brazil needs more of is skilled labor—more engineers to which he now must import from America. He indicates that Brazil is walking into a phase of almost full employment with the creation of 1.5 million jobs in one year.
Brazil has seen periods of prosperity before–only to have the bubbles burst. Brazil spent billions in the 50s and 60s moving its capital to Savannah where it built the futuristic city Brazilia. Brazil then borrowed billions more to develop the county’s interior. Corruption then led to a financial collapse–2000 % inflation and the largest financial rescue package in the history of the international monetary fund. Lula, as President of Brazil, a metal worker with a 4th grade education, receives much credit for turning the country around. Lula, in an interview, indicates that Brazil was a capitalist country without capital. He asserts that Brazil needed a metal worker with socialist views to bring more money for banks, more sales for car companies, and more money to the workers. When asked how? Lula says the success of an elected official is in the art of doing what is obvious—what everyone knows needs to be done but some insist on doing differently. Lula recognized the separation between the rich and poor of Brazil. He gave the poor families a monthly stipend of $115 dollars just for sending their kids to school and taking them to the doctors. Such an infusion of cash helped lift 21 million out of poverty and into the lower middle class which created an untapped market of first time buyers for refrigerators and cars. Lula also encouraged growth and development by businesses but created tight banking regulations to maintain conservative fiscal policies.
Historically, Brazil had ignored the festering slums overlooking Rio which was a staging area for street crimes, drug gangs, but now gets the attention of military police. Brazil has massive problems with infrastructure—traffic and roads. Ninety percent of the roads remain unpaved and little public transportation exists in the cities. Delays in building and renovation exist for the upcoming 2014 World Cup. Lula, in the interview, indicates that Brazil will organize the most extraordinary World Cup ever. He says that as he leaves office he told his people that they are not second class citizens–we can get things done, and we can believe in ourselves. People have started to believe—meaning that he expects his momentum to continue for the country.
- How is Brazil a strategic competitor? Explain
- What is Brazil’s strategy? Explain.
- Is Brazil a hypercompetitor? Explain
- What impact does Brazil have on the global economy? Explain
- What resources, capabilities, and core competencies does Brazil have? Explain
- What are the stakeholders associated with Brazil’s thriving economy? Explain their significance.
the video link:https://www.youtube.com/watch?v=To4DYsvQrX8.