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~ Viva Brazil ~

his year, Brazil has opted to turn right after 13 among emerging nations when discounted reinvested earn-
years under a leftist government and two years ings, according to the International Finance Institute (Instituto
Tunder a centrist one with questionable legitimacy. Internacional de Finanças - IIF). The indicator created by the
The new President had promised to open up the Brazil- IIF itself seeks, according to the institute, to measure FDI flows
ian economy to investment and make the nation more more precisely. This is because reinvested earnings may point to
“business-friendly”. “repatriation restrictions” on such income.

This Brazilian presidential election is a potential game-changer for “Brazil stands out as the main destination (FDI, discounted profits
the way politics and business is conducted in South America’s largest reinvested), although other countries rich in natural resources in Latin
economy. The new President, Jair Bolsonaro, has pledged to stamp out America—including Colombia and Chile—are also important desti-
corruption, which has crippled the country for over a decade. nations,” says the IIF in a report released in May 2019. Here, it can be
seen that Brazil is the number one emerging market with the largest
Forbes also published a report in January 2019 saying that “Brazil flow of foreign investment). The indicator is compared to the Gross
is the Best Stock Market in the World Right Now”. This has Domestic Product (GDP). On average between 2015 and 2018, flows
brought optimism to locals and foreign investors alike. of this type in Brazil were approximately 3.5% of GDP.
What will be the effect on foreign investments?
According to Bernardo Paiva, Ambev’s General Manager, this is On the other hand, China is cited as an example of a country that im-
the right moment to invest in Brazil. Regardless of the waiting poses restrictions on the repatriation of resources, and so is among the
period, the growth cycle has resumed, says Paiva. countries with the lowest flow of “real” FDI, by the IIF definition.

Actually, the Foreign Direct Investment (FDI) in Brazil is grow- And how about e-commerce in Brazil?
ing significantly. In 2018, the number of resources totalled US$ Brazilian e-commerce is a market in undeniable expansion: even
88.31 billion, 25.7% more than in 2017. And there is a trend of with the economy looking for a way to recover, the sector grew
growth that has been observed since 2015. 12% in 2018, and its growth forecast is 15% for this year, accord-
ing to Ebit/Nielsen.
The largest portion of these resources (US$ 20.81 billion) was
destined for economic activities in the service sector. The segment However, the path is still far from reaching mature markets such
received R$ 3.02 billion. This amount is 5.7% more than the as the United States and Asia, where e-commerce strength already
average annual gross inflow of direct investment for the segment points to a balance between online and in-store purchases: 12% of
registered in the period from 2010 to 2017. US retail is e-commerce, while 20% of the Chinese market oper-
ates in this mode. Here in Brazil, however, only 3% of commerce
The Brazilian stock market has already seen positive growth, with is on the internet. This, nevertheless, shows an enormous digital
a strong valuation of national companies such as Americanas, economy growth opportunity!••
BW2 Digital, CCR Rodovias Petrobras, Submarino, Usiminas
and Vale, for example.
Gerson Rolim is Partner and Director of Vecto Mobile Intellimetri and
Observatore, and Director of ABINC and camara-e.net. He is a pioneer of the
While we are still unsure of the specific effect that the new Brazilian Internet, connecting the first public networks. Rolim has 23 years
government will have on FDI in the region, there is confidence of experience in ICT and is a post-grad in Computer Network and a grad in
amongst both locals and the foreign business community. Computer Science. He also has experience in the technical, commercial and
management sectors.
Mr Jair Bolsonaro, in his first official act, has fulfilled some of his
promises, including eliminating certain government institutions Between 2008 and 2013, Rolim represented Brazil in the direction and
and appointing a new team to take over some existing public serv- institutional representation of Digital Mercosul’s Project, a partnership
ant roles. His team was selected in accordance with their profes- involving the European Union and Mercosul Block (Argentina, Brazil,
sional experience and knowledge. Paraguay and Uruguay). In this project, Gerson represented the Brazilian
government in discussions with Brussels in order to foster joint policies and
strategies in the field of e-commerce and the Information Society, aiming
In response to this new scenario, the Brazilian stock market has
towards the reduction of the digital divide and the reduction of asymmetries
already seen positive growth. Additionally, the national currency
related to ICTs in the region.
(BRL Real) continues to strengthen. Brazil is expecting billions
of dollars of new investments to be made in the country, and the
Finally, Rolim is an influencer and pioneer of the Brazilian internet, having
citizens are optimistic in regard to the promises of tax and social
connected the first public and private networks, and he participated in the
security reforms in addition to flexible labour rules.
development of the first e-commerce projects in Brazil, in the mid-’90s. He
was a founding partner of the first MVNO with a total focus on Internet of
Certainly, for potential investors, now is the right time to consider
Things (IoT) in Latin America, Vecto Mobile.
Brazil as a profitable investment destination. Brazil is already the

country that receives the most foreign direct investment (FDI)

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