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Brazil investment climate

Brazil investment climate, politcal stability, social/cultural environment background review for board of directors for possible company investment

Imagine that you are an executive with a multinational corporation that wants to open a manufacturing facility in an underdeveloped country. You have been assigned the responsibility of preparing a report on the suitability of a particular country (Brazil) for investment. Your company is concerned with the investment climate in this country, but is equally interested in the political stability, social and cultural environment since it will be making a substantial financial commitment. Your corporation views this as not only an opportunity to make a profit, but also as a humanitarian effort to help improve the standard of living in a lesser developed country.

For this project I have sleceted Brazil as the country to be written about in depth ,

Prepare a detailed report for your Board of Directors that includes the following information:

General information:

•Population of the country (see 1 below for more information)
•Important ethnic or racial groups and divisions
•Per capita gross domestic product (see 2 below for more information)
•UN Human Development Index rankings (see 2 below for more information)
•Freedom House scores for political rights and civil liberties (see 3 below for more information)
•The economic position of your country compared to other countries (wealthy, poor, middle income)
Classification and structure of government

•Liberal democracy, illiberal democracy, authoritarian regime?
•Influential philosophers or thinkers who have influenced the political history and development of the system of government
•Presidential or parliamentary system? Something else?
•Who is the head of government?
•Electoral system: how are legislators selected? How is the executive elected or chosen? How is the bureaucracy staffed?
•What is the highest level of the judiciary? Does judicial review exist?
•Is your country a federal or unitary system? How are policies administered in your country?
•Is there a written constitution? How old is it? Is it considered to be effective? Does it have the support of the people?
•How much control does government exercise of the economy?
Competition, stability and civil society

•Number and strength of political parties
•Major conflicts between parties (liberal, conservative, left-right, ethnicity, etc.)
•Voting behavior - if your country is a democracy, what is the turnout for elections? Is voting compulsory? (See 4 below for more information)
•What are the results of the most recent election? When is the next national election?
•Are there any recent political changes?
•Major social movements?
Economic environment

•Suitability of the country for foreign investment
•Government policy toward foreign investment
•Challenges and potential obstacles
•Advantages to foreign investment in this country
Other questions

•Most important political, economic, environmental and human rights issues facing your country
•Is your country in conflict with its neighbors or other countries?
•What are its relations with major global powers - the US, Europe, China, etc.?
Provide a bibliography of the resources you used to prepare your report. A bibliography is the same as a list of references, listed in alphabetical order by last name of author, applying guidelines for APA Style.

1.Data can be accessed through the World Bank website: http://www.worldbank.org/
2.Data can be found on the website of the UN Human Development Report: http://hdr.undp.org/en/statistics/
3.Data on political freedom available at: Freedom House. There is an interactive map on the home page; you can find information about your country using this map.
4.Data on turnout available on the website of the Institute for Democracy and Electoral Assistance: http://www.idea.int/index.cfm. On the Publication and resources tab, click Databases and networks. Then select the Voter turnout link, and click Voter Turnout. Using the interactive map, input your country name to determine the voter turnout for your country.

Discuss and cite at least ten credible sources other than required course readings.

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Solution Preview

General information:

- Population of the country (see 1 below for more information)

The population of Brazil is just under 200 million people. http://www.worldbank.org/en/country/brazil However, with a strong economy with many business opportunities and the upcoming World Cup (soccer) and the Olympics events the 200 million mark will likely be reached in the next five years. Brazil's population is a mixture of European, Amerindian, African and Asian ancestry. The Amerindians are the oldest population in Brazil. Europeans began arriving in the early 1500's bringing with them significant numbers of slaves from Africa. Some anthropologists posit that Asians actually arrived prior to the Europeans. However, large scale Asian immigration only occurred in the 19th and 20th centuries.

See attachment

As can been seen in the maps above, the majority of Brazil's population lives within 300 miles of the coast.

- Important ethnic or racial groups and divisions

Prior to the 16th century the population of present day Brazil was formed by native Amerindians from the Tupi-Guarani and Ge language groups. In the 16th and 17th centuries Portuguese colonists and adventurers as well as slaves primarily from West Africa were added to the ethnic mix. Concepts of racial intermarriage and relations was viewed differently in Brazil in comparison to the standard adhered to by English colonists. Intermarriage and sexual relations was practiced openly and without prejudice from the very earliest days in Brazil. Intermarriage between Amerindians, African slaves and Portuguese colonists was common, sexual relations between the above groups was rampant.

After Brazil achieved independence in 1822 and with the discovery of gold in the current state of Minas Gerais, non-Portuguese Europeans began immigrating to Brazil. Germans and Italians immigrated by the hundreds of thousands and settled predominantly in the southern part of Brazil where there are still large pockets of German and Italian immigrants. Japanese immigrants also came to Brazil in the 19th and 20th centuries in large numbers and became a strong force in the agricultural arena.

Because of the acceptance of intermarriage between ethnic groups there is wide divergence of ethnicity in Brazil today. The white/black division that commonly causes racial problems in the United States is rarely seen in Brazil because there are innumerable shades of "brown" rather than simply white and black. This is not to say that racism does not exist. However it is more common to find prejudice displayed as a result of socio-economic factors rather than primarily on ethnicity or skin color.

The one ethnic group that still suffers some discrimination is the Amerindian segment of the population. The Brazilian government has treated the "Indian question" in much the same manner as the American government has. The Indians have been in turn manipulated, coerced, bribed, exploited, been forcibly moved to reservations and been placed in a position of dependence on the government.

Divisions in Brazil then tend to be based on wealth as opposed to race or ethnicity. The interesting way this is exhibited is that any social group in Brazil will have white members, black members and numerous shades of brown. Descendants of Europeans, Africans and Indians mix together freely. Within that social group however there will be levels of economic prestige. In a business setting it is important to note that there are significant wealthy groups in every ethnic group in Brazil. To minimize the importance of a particular ethnic group as a result of assuming they are socio-economically unimportant will be detrimental to the company's financial success.


- Per capita gross domestic product (see 2 below for more information)

The per capita gross domestic product of Brazil is roughly $12,000. (2012) This amount is growing on a yearly level as Brazil grows as an economic power. Brazil is one of the BRIC countries who are challenging the top world economic powers. BRIC countries are Brazil, Russia, India and China.

- UN Human Development Index rankings (see 2 below for more information)

Brazil ranks 85th in the world, according to the United Nations Human Development Index. Their ranking has improved on a yearly basis since the rankings have been kept. Currently it is better than the world average. Areas in which Brazil excels include technology, gender and ethnic equality, and national economy. Areas in which Brazil struggles and improvement is needed include poverty, education and the environment.

- Freedom House scores for political rights and civil liberties (see 3 below for more information)

Brazil enjoys a rating of 2 for both political rights and civil liberties. Brazil allows free elections for all citizens over the age of eighteen. Voting is compulsory and failing to vote results in a monetary fine. Property is available to be purchased by citizens and foreigners and foreigners can also own property and run a business in Brazil. Brazil allows freedom of expression as does freedom of the press and freedom of religion. Little, if any, persecution exists based on political expression or perspectives.

In spite of enjoying these rights there are several issues that hinder Brazil from enjoying a higher ranking and providing a better life for its citizens. Corruption is perhaps the biggest problem that Brazil faces. There is corruption on nearly every level of society. Corruption in politics led to the removal from office of five federal representatives in 2011. Corruption is rampant in politics, business, sports and the ...

Solution Summary

This post describes the investment climate in Brazil. The opportunity and risks or foreign financial investments in Brazil are comprehensively discussed. Over 3,500 words of original text along with links to sources.