BUAD 417-Country Analysis-Brazil
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Transcript of BUAD 417-Country Analysis-Brazil
Agenda 1. General information 2. Economic conditions 3. Political climate 4. Foreign investor considerations Our recommendation: ● DO NOT invest in Brazil
Political Climate (Basic Info) ● Presidential Federal Republic state ● Multi-party state
● President is both the head of the state and the government.
Political Climate (03-10) ● Lula Administration
● Improved social inclusion
○ declined poverty rate (37.5% to 20.9%) ○ declined extreme poverty rate (13.2% to 6.1%) ○ decreased income inequality with decreased Gini
coefficient (0.64 to 0.56)
Political Climate (11-present) ● 2011- Present (Rousseff Administration) ● Relatively stable politics ● Challenges faced:
○ 2013 Mass Demonstrations ○ 2014 World Cup ○ 2016 Olympics
Foreign Investor Considerations 1. Government and law supports foreign investments 2. Foreign Ownership allowed in Brazil (Possibly 100%)
○ fields with limitations: Aviation, telecommunication, media.
3. Dividend repatriation allowed 4. No expropriation actions or expropriation plans. 5. No tax limitations or benefits for foreign investors.
References Banco Central Do Brasil. (Dec, 2014). Inflation Report. Banco Central Do Brasil. Bernardes, O. (2013, January 01). Direct and Indirect Investment in Brazil: Remittance, Repatriation, and Reinvestment. Retrieved from Gomm&Smith: http://gommsmith.com/blog/123-direct-and-indirect-investment-in-brazil-remittance-repatriation-and-reinvestment.html Brazil Central Bank. (2014, January 01). General Information. Retrieved from Brazil Central Bank: http://www4.bcb.gov.br/pec/GCI/INGL/Brazil.asp Global Opportunity Index. (2013, December 31). global opportunity index-2013 Ranking. Retrieved from global opportunity index: http://www.globalopportunityindex.org/opportunity.taf?page=rankings JELMAYER, R. (2015, 2 27). Brazil’s Government Limits Spending Through April. Retrieved 2 28, 2015, from The Wall Street Jouranl: http://www.wsj.com/articles/brazils-government-limits-spending-through-april-1425036866?KEYWORDS=brazil Murray, M. (2015, 1 23). Brazil’s 2015 Economic Growth Will Be ‘Almost Flat,’ Says Finance Minister. Retrieved 2 28, 2015, from The Wall Street Journal: http://www.wsj.com/articles/brazils-2015-economic-growth-will-be-almost-flat-says-finance-minister-1422021342 Mello, J. (2014, May 29). Paying dividends from Brazil to abroad. Retrieved from The Brazil Business: http://thebrazilbusiness.com/article/paying-dividends-from-brazil-to-abroad Meyer, P. J. (2014, March 27). Brazil: Political and Economic Situation and U.S. Relations . Retrieved from Federation of American Scientists: http://fas.org/sgp/crs/row/RL33456.pdf TREVISANI, P., & JELMAYER, R. (2015, 1 29). Brazil Central Bank Signals Further Increase in Interest Rates. Retrieved 2 28, 2015, from The Wall Street Journal: http://www.wsj.com/articles/brazil-central-bank-signals-further-increase-in-interest-rates-1422549092 The Worldwide Governance Indicators . (2014, 01 01). The Worldwide Governance Indicators, 2014 Update. Retrieved from The Worldwide Governance Indicators: http://info.worldbank.org/governance/wgi/index.aspx#home U.S. Department of State. (2014, 6 01). Department of State: 2014 Investment Climate Statement. Retrieved from U.S. Department of State: http://www.state.gov/documents/organization/227130.pdf Wikinvest. (2009, December 30). The Brazilian government imposes certain restrictions on currency conversions. Retrieved from Wikinvest: http://www.wikinvest.com/stock/Cresud_S.A.C.I.F._y_A._(CRESY)/Brazilian_Government_Imposes_Certain_Restrictions_Currency_Conversions_Remittances