The largest South American power springs effortlessly and ambitiously back from its recession due to a strong economic foundation and reforms grounded in encouraging safe and secure investment.
Brazil is South America’s most influential country and one of the 10-largest economies in the world due to a prosperous and enormous potential for growth. According to the IMF its GDP was US$ 1.8 trillion in 2016, with an average GDP growth rate of 2.6% since 2000.
In office since August 2016 President Michele Temer has revolutionised policies and introduced reforms that reduce obstacles to foreign investment and reinforces Brazil’s industrial sector. The government has harnessed inflation, promoted businesses and created jobs. Welfare programs (such as the Bolsa Família) have successfully assisted millions of poverty stricken Brazilians, allowing its middle class to flourish.
The country continues to be among the top recipients of FDI (Foreign Direct Investment), attracting international businesses due to opportunities sustained by the domestic investor protection rules. In 2009 it became a net creditor of the IMF and has accumulated internal reserves of US$30 billion (March 2017). It is a founding member of Mercosur and borders with 10 countries.
The government encourages competition in the economy through modernization of its infrastructure with concessions, private financing (PPPs) and the participation of banks and investment funds. Indeed, investment in infrastructure has tripled in the past few years and a PPP package with 34 assets (port terminals, railroads, power plants, mining areas, water and sanitation services, to name a few) are to be auctioned by 2018. (In March 2017 four major airports were auctioned for US$1.18 billion.)
Brazil’s natural resources are vast: large iron and manganese reserves are important mining products and profitable exports. Deposits of nickel, tin, chromite, uranium, bauxite, beryllium, copper, lead, tungsten, zinc, gold, and other minerals are also exploited. Brazil is also a major producer and exporter of agricultural products. In a 2015 study Food and Agriculture Organisation (FAO) found it to be the second highest exporter of food, the result of scientific and technological development in modernising farming methods and agricultural machinery and equipment. As the third-largest manufacturing sector in the Americas, Brazil hosts many multinational manufacturers in aerospace, automotive, capital goods, chemicals, construction, electronics, engineering, information and communications technologies, life sciences, oil and gas.
Brazil is one of the major international energy players in the world. In 2006-2007 it became self sufficient in oil. It has one of largest petroleum reserves; in 2006 the ultra-deepwater oil (pre-salt oil) find of tens of billions of barrels of oil in fields far off the Rio de Janeiro coast was the biggest oil discovery made in the Western Hemisphere in the past 30 years. The country is also one of the main producers and exporters globally of ethanol biofuel.
According to the International Energy Agency (IEA) it is the eighth-largest producer of electricity in the world. The country is deeply committed to renewable energy (hydroelectric, wind, biomass and solar energy) which is responsible for over 76% of its matrix. Hydroelectric power is Brazil’s most important and significant source in the grid. The world’s biggest power plant in the world is the Itaipu Dam which produces 103 billion kWhs/year. Hydropower capacity is expected to increase by about 4,000 MW in 2017. It has two nuclear reactors (generating 3% of its electricity) and a third one under construction. The government plans to build 19 more nuclear plants by the year 2020.