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How to build business bonds with Brazil

Posted by Devin Cole  March 15, 2012 05:30 PM

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BRICS.jpgIn the coming days the media spotlight will shine brightly upon the March 29 BRICS summit in New Delhi, where business leaders from Brazil, Russia, India, China, and South Africa will meet to discuss issues in global trade. Given such international attention, it’s worthwhile to reflect on the progress made by these emerging countries, and look to the future for new ways Massachusetts can partner with these fast-growing economic powerhouses.

Take Brazil, for example. For much of the last forty years, the country was described as a nação de amanhã – “the nation of tomorrow.” It was known for coffee, soccer, and samba, and its exporting strengths were primarily in commodities like sugar and iron. I lived there in the late ’70s and early ’80s while working for Bank of America, and saw first-hand how political uncertainty and hyperinflation inhibited investment in the country’s resources, both natural and human.

Today is a completely different story, as the country has evolved to become an increasingly important player in the world. In the face of a global recession, Brazil’s GDP achieved its strongest growth in 25 years in 2010. After slowing last year, GDP is expected to rise another 3.5 percent in 2012, twice the rate of countries in Europe. In December it surpassed Britain as the sixth-biggest economy in the world; the IMF predicts that it will overtake France by 2015 to join the ranks of the top five alongside the United States, China, Japan and Germany.

Brazil has achieved this by staking out its place as a model of economic stability. A global leader in alternative energy, it is the world’s largest exporter of bio-ethanol fuel, which uses residual waste from sugarcane farms to help power cars. Its agricultural and mining industries have continued to thrive, exploiting an abundance of raw materials. Macroeconomic policies over the past two decades have eliminated high inflation and created an environment of increased investment. Social programs have helped lift tens of millions of Brazilians out of poverty to join the middle class. And unemployment is at record lows.

It's only been in the last few years, however, that Massachusetts has made greater efforts to tap into Brazilian markets. The state’s exports to Brazil surpassed $500 million last year, an increase of more than 30 percent from 2010. Last year Hopkinton-based EMC announced a $100 million investment in an R&D center in Rio de Janeiro. The workforce management software company Kronos, headquartered in Chelmsford, established new sales operations in São Paulo to further expand its client roster in the country.

In December, Governor Deval Patrick led a group of leaders from business, government, and academia on a trade mission to Brazil to establish partnerships to encourage investment and job growth. As a member of the delegation, I was struck by how much the country’s atmosphere has changed since I lived there. Its people hold an intensely positive outlook about their future and a true spirit of entrepreneurship and innovation. Brazil will host the 2014 World Cup and the 2016 Summer Olympics, and the excitement surrounding those games is already palpable. There is a real sense that its moment on the global stage has finally arrived.

Trade missions by themselves are just the beginning. We have to think and engage critically not just through the private sector, but also through higher education. This fall Brazil announced plans to send 75,000 students to the U.S. for critical technology and science skills. Massachusetts, with its plethora of academic institutions, is well-positioned to attract more than our fair share of students. In October the Institute of International Education selected Brandeis as one of 18 U.S. universities to participate in the 2012 International Academic Partnership Program, aimed at helping American schools implement and sustain partnerships with institutions in Brazil.

Within Brandeis International Business School itself, we have chosen to make Brazil one of the focus countries for our upcoming Global Trade Summit, which looks at current issues in trade and investment with emerging markets. We have increasingly recognized that, as our state continues to ensure sustainable growth through innovation, education, and infrastructure, strategic international relationships will prove integral to our success. Rather than view globalization as a deterrent to economic prosperity, we need to aggressively market our Commonwealth to give countries like Brazil strong reasons to purchase our goods, invest in our companies, and create alliances with our universities.

Dean of Brandeis International Business School and the Martin and Ahuva Gross Chair in Financial Markets and Institutions, Dr. Bruce R. Magid has a diverse background in academia, business and finance. At Bank of America he served as chief international economist and led the bank's corporate and trade finance activities in Latin America. He has also served on the board of the Massachusetts Office of International Trade and Investment.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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