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Business Profile
Economy: Brazil has the world’s tenth-largest economy. Agriculture remains the largest sector in terms of employment and Brazil is the world’s second-largest exporter of agricultural products, principally coffee, sugar, soya beans, orange juice, beef, poultry and cocoa. Sisal, tobacco, maize and cotton are also produced. Orange juice and coffee are key export earners. There is also a substantial industrial sector, concentrated in machinery, electrical goods, construction materials, rubber and chemicals, and vehicle production. The country also possesses large mineral reserves including iron ore – of which Brazil is the world’s largest exporter – bauxite, gold, titanium, manganese, copper and tin. Plans to develop Brazil’s potentially vast oil and gas resources will serve to reduce the country’s large current energy import bill but face opposition both at home and abroad on environmental grounds.
After difficulties throughout the 1980s, as the economy adjusted to new liberal economic policies, Brazil recorded a fairly strong economic performance during most of the 1990s. Industrial efficiency and financial management were improved while the Government bolstered its coffers through a programme of privatisation. However, little of this money was directed towards investment and Brazil is now suffering the consequences of years of underinvestment in infrastructure and public services. The fiscal austerity programme demanded by the IMF in exchange for financial support means that this situation is unlikely to change in the near future.
An important element of government economic strategy was implemented in 1994 with the introduction of a new currency, the Real, which replaced the Cruzeiro. However, after an initial period of stability, the Real came under increasingly heavy speculative attack from financial markets, especially after the financial crises in Asia and Mexico. The Government was forced to devalue the Real in 1999, but this failed to prevent the currency from its continuing downward spiral – the Real is now close to half its post-devaluation level. This has had serious consequences not only for Brazil but also its major trading partners such as Argentina. The economy contracted slightly during 2001 after several years of reasonable growth. Brazil’s principal trading partners are the USA, Japan and Germany, and its fellow members of the newly formed southern Latin American trading bloc, MERCOSUR. Brazil also has important trading links with a number of Arab countries, notably Saudi Arabia.
Business: Business suits are worn when meeting senior officials and local heads of business, for semi-formal social functions and in exclusive restaurants and clubs. Exchange of business cards is usual as is the expectation of dealing with someone of equal business status. Office hours: Mon-Fri 0900-1800.
Commercial Information: The following organisations can offer advice: International Chamber of Commerce, Rua Funchal 573, Four andar, Vila Olimpia, 04551-910 Sao Paulo (tel: (11) 3849 8055; fax: (11) 3849 8954; e-mail: camint@camint.com.br; website: www.camint.com.br); or Brazilian-American Chamber of Commerce (BACC), 509 Madison Avenue, Suite 304, New York, NY 10022, USA (tel: (212) 751 4691; fax: (212) 751 7692 or 751 8929; e-mail: info@brazilcham.com; website: www.brazilcham.com); or American Chamber of Commerce for Brazil, Rua da Paz, 1431 CEP 04713-001 São Paulo (tel: (11) 5180 3804; fax: (11) 5180 3777; website: www.amcham.com.br); or trade and commercial sections of Brazilian Embassies (some of which also incorporate a Brazilian Chamber of Commerce; for contact numbers, see Contact Addresses section).
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