HISTORY, CULTURE ,SOCIETY AND ECONOMY OVERVIEW
BRAZIL :
HISTORY
Colonisation and slavery : 1500 : Arrival of Pedro Alvares Cabral :
Brazil is claimed by Portugal. 1815 : Brazil is elevated from colony to
sovereign kingdom united with Portugal. 1822 : independence from Portugal :
Brazilian Empire.Military republic : 1889 : overthrow of monarch Pedro II :
Republican government = military dictatorship
HISTORYRepression : 1930 : defeated presidential candidate
Getúlio Vargas leads a first coup d'état and accesses to presidency.
1937 : 2nd coup d'état : Brazil became a full dictatorship : 20,000 people imprisoned, internment camps for political prisoners, censorship of the press.
1954 : suicide of Vargas. 2 presidents between 1956 and 1962. 1964 : João Goulart leads a coup d’état :
military regime. 1968 : Fifth Institutional Act : full
dictatorship.
HISTORY
Re-democratization process : 1974 : General Ernesto Geisel president :
end of the military indiscipline, torture, censorship of the press and dictatorship.
2 presidents between 1985 and 1994. Fernando Henrique Cardoso elected as
president in 1994 and again in 1998 : Plano Real (Royal Plan) grants stability to the Brazilian economy.
Political stability : Luís Inácio « Lula » da Silva is elected in
2002 and re-elected in 2006.
INTRODUCTION
Federal Republic of Brazil Capitale : Brasília Language : portuguese Currency : Real (BRL) Total area : 8 547 877 km2 (5th) 5 regions and several states Climates : Tropical arid to humid
equatorial 65% water
CLIMATES
SOCIAL FIGURES IN 2010
192 298 177 inhabitants Yearly growth rate : 1.160% Fecundity index : 2.19children/woman
Child death rate : 21.86‰ Life expectancy : 72.26 y Death 6.35‰
EDUCATIONAL AND WORK FIGURES Alphabetization rate (age 15 and over) In 2008 : total population: 88.6%
male: 88.4% female: 88.8%
2010 : Brazil unemployment rate stands at 7.40% of the labor force
Sources : http://www.populationdata.nethttp://www.tradingeconomics.com
CULTURE
Derived from portuguese culture because of Colonial history.
Strongly influenced by African, indigenous and non-Portuguese European (Italian, German) cultures.
RELIGION : no official religion. over 80% of Catholics
about 9% of Protestants The "Candomblé" (5%) : slaves from Nigeria and Benin. animist deities + Catholic figures.
Some Jewish, Muslim, Buddhist.
KEY POINTS OF THE ECONOMY
Key points of the Brasilian Economy Agriculture Energy High technology
KEY POINTS OF THE ECONOMY : AGRICULTURE
Brazil is the largest exporter of iron, coffee, soya, orange juice, bovine meat and sugar.
KEY POINTS OF THE ECONOMY : ENERGY
Biofuel: ethanol 1st world producer Great potential for future Great market demand
KEY POINTS OF THE ECONOMY : ENERGY
Biofuel: ethanol A strong production increase Doing business with USA and EU Competition with traditional
farming
KEY POINTS OF THE ECONOMY : ENERGY Biofuel Oil
14th World producer 8billion barrels reserve
discovered
Sub-Salt: Scenario for 2010-2020 /1Capex Production Gross Revenues
US$ billion million / barrels US$ billion
2010 700 - - 2011 1,683 - - 2012 1,981 3.9 0.3 2013 2,476 34.1 2.6 2014 3,805 34.1 2.6 2015 5,623 38.0 2.9 2016 6,390 60.9 4.6 2017 9,900 123.9 9.3 2018 10,197 145.4 10.9 2019 14,362 170.8 12.8 2020 14,793 232.9 17.5
Total: 72 844 63
1/ Assumes oil prices at USD 75/barrel in coming years, and a 4-year interval between the start of investment in each of the fields. Figures at current prices.
KEY POINTS OF THE ECONOMY : ENERGY Biofuel Oil Hydropower:
Only 27% of Hydro power capability is used
The Itaipu Dam, a project from Paraguay and Brazil
KEY POINTS OF THE ECONOMY : ENERGY Biofuel Oil Hydropower: Nuclear power:
2 nuclear power plants Enriched Uranium
production 2012 : 60% of Brazilian
need 2015 : 100% of Brazilian
need
KEY POINTS OF THE ECONOMY : HIGH TECHNOLOGY
Automotive industry Ford factory for South America
Market
Aeronautic industry Embraer leader on regional jets
Evolution of the Brazilian economy since 1994 Creation of the Real currency Struggle against the inflation plague Privatization of the economy
FINANCIAL AND BUDGETARY OVERVIEW
0.00%
50.00%
100.00%
150.00%
200.00%
250.00%
300.00%
1995
.03
1995
.11
1996
.07
1997
.03
1997
.11
1998
.07
1999
.03
1999
.11
2000
.07
2001
.03
2001
.11
2002
.07
2003
.03
2003
.11
2004
.07
2005
.03
2005
.11
2006
.07
2007
.03
2007
.11
2008
.07
2009
.03
Steel8% Petrochemicals
4%
Mining8%
Power31%
Telecom31%
Oil & Gas7%
Sanitation1%
Transports2%
Others1%
Minority participation
1%
Financial6%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan-
98
Jul-9
8
Jan-
99
Jul-9
9
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
0
20
40
60
80
100
120
140
160
180
200
BRL/USD Real Exchange Rate Index (RHS)
A slow shift from the interior market to globalization A high consumption within the national market a
federal state The reduction of the national debt now 40% of the GDP Investment difficulties due to a lack of easily accessible credit
FINANCIAL AND BUDGETARY OVERVIEW
15
20
25
30
35
40
45
50
Dec-9
0
Dec-9
1
Dec-9
2
Dec-9
3
Dec-9
4
Dec-9
5
Dec-9
6
Dec-9
7
Dec-9
8
Dec-9
9
Dec-0
0
Dec-0
1
Dec-0
2
Dec-0
3
Dec-0
4
Dec-0
5
Dec-0
6
Dec-0
7
Dec-0
8
Aug09: 45.2%
Excesses of the federal system Lack of control of the national government
concerning financial transfers A low Gini index global rank of 116th
The ICMS tax 1. Creates a kind of tariff barrier between the states
2. « Fiscal war » between the states to boost investment
3. Financial dependancy relations 4. Brazilian exports less attractive than
local markets
FINANCIAL AND BUDGETARY OVERVIEW
FINANCIAL AND BUDGETARY OVERVIEW
Positive evolutions A country less affected by the crisis Increase in consumption market Brazil has now become a net
creditor
A & B16%
C52%
D14%
E18%
A & B13%
C44%
D14%
E29%
Class Participation as a % of total population
2004
Class Participation as a % of total population
2008
90
95
100
105
110
115
120
125
130
135
140
145
2003 2004 2005 2006 2007 2008 2009 2010 2011
Ago 09: +0,4%
Jul 09: 0%
Economic Research Itaú UnibancoPage - 23 -
Gini Index
0.54
0.55
0.56
0.57
0.58
0.59
0.60
0.61
0.62
19
92
19
93
19
95
19
96
19
97
19
98
19
99
20
01
20
02
20
03
20
04
20
05
20
06
20
07
Source: CPS/FGV and PNAD/ IBGE
Middle Class (% of population)
25
30
35
40
45
50
1992
1993
1995
1996
1997
1998
1999
2001
2002
2003
2004
2005
2006
2007
Miserable (% of population)
15
20
25
30
35
40
1992
1993
1995
1996
1997
1998
1999
2001
2002
2003
2004
2005
2006
2007
Years of Schooling (average of total population)
4.0
4.2
4.4
4.6
4.8
5.0
5.2
5.4
5.6
5.8
6.0
1992
1993
1995
1996
1997
1998
1999
2001
2002
2003
2004
2005
2006
2007
LONG TERM SOCIAL IMPROVMENTS
SHORT TERM OPPORTUNITIES
2012 World Cup• Infra-structure investments
• Airport improvements
• Urban transports including subways and railroads
• Hotels
2014 Olympics Games40,0
21,5
15,8 14,4
9,4 6,5
1,8
Beijing2008
Atenas 2004
London 2012
Rio 2016Barcelona 1992
Sydney 2000
Atlanta 1996
Civil Construction 10,5%
Housing Services6,3%
Services5,7%
Oil & Gas5,1%IT
5,0%
Logistics4,8%
Other62,6%
LONG-TERM OPPORTUNITIES
GDP growth (5%) better than EU (2%) and US (2.2%) from 2010 to 2020
Controlled inflation : 3.5% forecasted in 2020
Strong consumer market
Interest rate should fall from 7% to 3.5% by 2020
QUESTIONS???