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01/15/2009
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documents in English
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9 pages
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Global trade relations: Opportunities and challenges for direct investment in Brazil

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). [...]


[...] While the Northeast region has the worst economic indicators nationwide due to low comprehensiveness and quality of public services, seasonal drought in rural areas, and widespread corruption, many cities in the South and Southeast enjoy First World socioeconomic standards Technological Brazil has today a well developed organization of science and technology. Basic research is largely carried out in public universities and research centers and institutes, and some in private institutions, particularly in non-profit non-governmental organizations. Thanks to governmental regulations and incentives, however, since the 1990s is has been growing in the private universities and companies, as well. [...]

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