MNCs Presence in Brazil

Through investment, job creation, and charitable works, MNC have helped spur on economic growth in Brazil. Multinational corporations are not only positively impacting Brazil through philanthropic and economic efforts, but are stimulating growth of domestic businesses as well. Domestic businesses are becoming increasingly aware that they can gain access to foreign markets, credit, and technology to survive. MNC have access to these necessary components of growth, and they can and will provide these to domestic businesses looking to grow. Furthermore, MNC promote human rights by increasing the incentives for Brazilians to become educated and for the government to better fund schooling. MNC are providing the incentive for seriously investing in education. Multinational corporations are often the primary avenue for educated Brazilians to achieve a higher pay scale.

Information Technology

Brazil has many issues to resolve before it can become a fully developed country. There are many pressing social issues that need to be worked on before the public will embrace major technological advancement. One of these issues is widespread poverty. Brazil is known for its stretching slums called favelas. These favelas are where millions of Brazilians live with little running water and electricity. This issue in itself creates a major internal battle in the country to provide economic funding for people living below the poverty line. Brazil has been a technology producer for many years now. Before the country opened its doors to privatization the country tried to create an infant industry to product technology equipment. After privatization became possible in the early 1990s, the doors opened to Foreign Direct Investment. Once money started to flow from overseas, Brazil became a producer of technology equipment for countries in more developed world. There is a large telecommunications cluster in Rio de Janeiro. The major companies that are present in the cluster include: National Grid, Sprint, France Telecom, Nippon, Telefonica, MCI WorldCom, Embratel, Bell South, Canadian Telecom, Qualcomm, South Korea Telecom, Williams International, and Portugal Telecom.

Raw Materials

Brazil exports commodities such as beef, iron ore, ethanol, soybeans, wheat and alfalfa, all of which are trading near record levels. In fact, according to MSN Money's Jon Markman, Brazil is the world's biggest exporter of raw materials. The global demand for Brazil's exports is fueling strong economic growth. Brazilian President, Luiz Inácio Lula da Silva, signed a decree on February 8th 2007, outlining a development policy for the biotechnology industry in Brazil, which should make the country a world leader in biofuel. In a more defiant and indignant mood he vowed that Brazil "will never again be a supplier of raw material to the global market." He went on to add that one his country's main priorities is to establish an alliance between biotechnology and energy derived from agriculture. The Brazilian government believes that the country's biodiversity places Brazil in an advantageous position compared to other nations. Brazil's national program intends to make the country a global leader in biotechnology in 10 to 15 years. The plan was devised through debates between the private and public sectors, and will receive support from five ministries, all of which are somehow related to the area: Health, Development, Science and Technology, Agriculture and Environment. The goal is to encourage biotechnological applications in five different fields: health, food security, animal health, industrial products and environmental quality. Saudi Arabia looks for raw materials in Brazil http://www.brazzilmag.com/content/view/5436/53/

Opportunities and Challenges

Which are the most interesting business opportunities for foreign companies in Brazil right now? Domestic demand is very strong, for example for cars, housing, or consumer durables. Two factors are driving domestic demand: On the one hand, more employment and increased minimum wages have led to the appearance of a new group of consumers: low income households spreading all over the country. On the other hand, low inflation and lower interest rates have boosted consumer finance. Where do you see the biggest challenges for companies doing business in Brazil? Without any doubt in the strengthening of the Brazilian Real, not only against the US dollar but also the Euro. A strong currency exposes a country to international competition, makes imports cheaper, exports more expensive, it magnifies sectoral inefficiencies. The first to feel the pressure were textiles and shoe businesses. But it also offers the opportunity for new players to bring state-of-the-art technology, to modernize plants with high-tech equipment, to re-shape value chains

Trade Agreements in Force: Multilateral Agreements WTO Agreement 15 April 1994 Customs Unions Andean Community Caribbean Community (CARICOM) Central American Common Market (CACM) MERCOSUR Free Trade Agreements: Partner countries: Date of signature Andean countries (Colombia, Ecuador, Venezuela)-MERCOSUR 18 October 2004 Bolivia - MERCOSUR 17 December 1996 Bolivia - Mexico 10 September 1994 Canada - Chile 05 December 1996 Canada - Costa Rica 23 April 2001 Canada-Israel 31 July 1996 Canada-Mexico-United States (NAFTA) 17 December 1992 CARICOM-Costa Rica 09 March 2004 CARICOM-Dominican Republic 22 August 1998 CARIFORUM-European Union 15 October 2008 Central America - Chile 18 October 1999 Central America-Dominican Republic 16 April 1998 Central America-Dominican Republic-United States (DR-CAFTA) 05 August 2004 Central America-Panama 06 March 2002 Chile-China 18 November 2005 Chile-EFTA 26 June 2003 Chile-EU 18 November 2002 Chile-Japan 27 March 2007 Chile-Korea 15 February 2003 Chile-MERCOSUR 25 June 1996 Chile-Mexico 17 April 1998 Chile-New Zealand, Singapore and Brunei Darussalam (P4) 18 July 2005 Chile-Panama 27 June 2006 Chile-United States 06 June 2003 Colombia-Mexico-Venezuela (Group of Three) 13 June 1994 Costa Rica-Mexico 05 April 1994 El Salvador-Taiwan 07 May 2007 Guatemala-Taiwan 22 September 2005 Honduras-Taiwan 07 May 2007 MERCOSUR-Peru 30 November 2005 Mexico-EFTA 27 November 2000 Mexico-EU 23 March 2000 Mexico-Israel 10 April 2000 Mexico-Japan 17 September 2004 Mexico-Nicaragua 18 December 1997 Mexico-Northern Triangle (El Salvador-Guatemala-Honduras) 29 June 2000 Mexico-Uruguay 15 November 2003 Panama-Singapore 01 March 2006 Panama-Taiwan 21 August 2003 Peru-United States 12 April 2006 United States-Australia 18 May 2004 United States-Bahrain 14 September 2004 United States-Israel 22 April 1985 United States-Jordan 24 October 2000 United States-Morocco 15 June 2004 United States-Singapore 06 May 2003 http://www.sice.oas.org/agreements_e.asp

Brazil's Economy

Brazil is the largest country in South America with the largest population and its economy is on the rise. It has an abundance of natural resources to make it the leader and the most powerful country in South America. Brazile provides agriculture, mining, manufacturing and service sectors, giving Brazil a very strong position in the global economy as well. What brought Brazil to its current economic position: Brazil's real wages fell during 2001 to 2003, making the economy grow only 2.2% (avg) per year. The country experienced a number of economic crises, both global and internal. Due to Brazil's strong economy and economic policies and programs, their economy was able to recover. Their currency also depreciated drastically from 2003 to 2006, which led to trade surplus. This led Brazil to increase their exports. Brazil's domestic debt was also on the rise from 1994 to 2003, but in 2006 country gained control by introducing economic programs that controlled taxes and increased public investment. Brazil's economy has continued to grow and develop since 2004 leading to the rise of employment and real wages. It's current GDP is $1.6 trillion wuth a real growth rate of 3.7%. Their unemployment rate is 9.6%. The major industries of Brazil are: textiles, shoes, aircraft, steel, chemicals, motor vehicles, etc. Agriculutral products are: coffee, rice, wheat, sugarcane etc. http://www.mapsofworld.com/south-america/economy/brazil.html

Brazil's Relationship with the U.S.

Brazil and the U.S. have had a close relationship for about 200 years. They both currently cooperate on trade issues, HIV/AIDS efforts, regional concerns, and the international peacekeeping operation in Haiti. The U.S. and Brazil are the top producers of ethanol in the world. President Luiz Inácio Lula da Silva, referred to as Lula, and President Bush recently signed an agreement to promote and increase the worldwide trade in ethanol. They have worked to build efforts toward controlling the production of narcotics and their distribution across Latin America. The two countries were also in cooperation on creating the Free Trade Area of the Americas (FTAA). Brazil's economy is one of the fastest growing in the world, but due to the global recession, its exports are falling. Brazil has been helping the U.S by supporting our trade agreements with its Latin American neighbors. With the economy slowing, however, it is weakening Brazil's ability to convince Latin America to continue friendly trading policies with the U.S. Right now, we are experiencing free trade with Latin American countries which reduces tarrifs, giving us lower prices for fruits, vegetable, coffee, and other items we import from them. Many countries believe the U.S. is at fault for the current recession, and could therefore withdraw from existing agreements and no longer trade freely with the U.S. This will raise our import prices and therefore, raise the final price to consumers. http://useconomy.about.com/b/2009/02/03/brazils-economy-weakens-not-good-for-us-trade-in-latin-america.htm

Ideologies and Political system, current rulers, legal and regulatory environment

Political System:

Government: Brazil’s government is a Federal Republic, which is a Federation of States that hold a Republic form of government. It is made up of 26 states. Their government is headed up by an Executive Branch, Judicial Branch, and Executive Branch. The Executive Branch consists of the President who also acts as Chief of State and serves no more than two four-year terms. The President appoints his or her own cabinet. The Judicial Branch includes the Supreme Federal Tribunal who is made up of 11 lifetime members appointed by the President. The Legislative Branch has a Senate with 81 popularly elected members who serve no more than two eight-year terms.

Current Rulers:

President--Luiz Inacio Lula da Silva (acts as President and Chief of State) Vice President--Jose Alencar Gomes da Silva Minister-Chief Casa Civil (Chief of Staff)--Dilma Rousseff Minister of Defense--Nelson Jobim Minister of Development, Industry, and Trade--Miguel Jorge Filho Minister of Finance--Guido Mantega Minister of Foreign Affairs--Celso Amorim Minister of the Environment--Carlos Minc Minister of Agriculture, Livestock and Food Supply--Rei

nhold Stephanes

Political Parties: There are 20 political parties represented by Congress in Brazil. The most popular being

• Workers' Party (PT-center-left)
• Democrats (DEM-center-right)
• Brazilian Democratic Movement Party (PMDB-center)
• Brazilian Social Democratic Party (PSDB-center-left)
• Progressive Party (PP-right)
• Brazilian Labor Party (PTB-center-right)
• Party of the Republic (PR-center-right)
• Brazilian Socialist Party (PSB-left)
• Popular Socialist Party (PPS-left)
• Democratic Labor Party (PDT-left)
• Communist Party of Brazil (PCdoB-left)

Suffrage Laws: Voting is mandatory for all literate citizens ages 18-70. Voting is optional for illiterate citizens and for citizens ages 16-17 and over 70.

Judicial Power: Judicial Power is held by the Federal Supreme Court, Superior Court of Justice, and by regional courts for electoral, labour, military, and other matters. All judges in all courts are appointed for lifetime terms. The Federal Supreme Court holds jurisdiction for all of Brazil.

Ideologies of Brazil: Today Brazil is the leading economic power of South America.The emerging economy of Brazil has made it a country to watch for as a major world economic power for the future. Along with Russia, India, and China it is one of the BRIC countries which labels it as one of the fastest growing economies of the world. Although the economy has been on the rise the political future of Brazil is not as certain. The current President won by majority but political party loyalty is weak in Brazil.

Sources:

https://www.cia.gov/library/publications/the-world-factbook/geos/br.html#Govt

http://www.state.gov/r/pa/ei/bgn/35640.htm

http://www.brasilemb.org/

Brazilian Police Violence

http://www.youtube.com/watch?v=tv68tKohY2E

Corruption in Brazil

Sept 2007 "Mensalao" Affair

Mensalao = Big Monthly Allowance Scandal

The biggest corruption scandal in Brazil's recent history

Photo obtained from www.upi.com

• This scandal involved an illegal vote-buying scheme to buy support for voting in line with the Worker's Party (PT) in support of President Luiz Lula. A reported $13,000 per month was paid to lawmakers.

The President's Chief of Staff, Jose Dirceu was indicted with corruption charges. It has been reported that the President was not personally involved, however, the scandal has definitely held up the President's efforts to push through important legislation and key reforms.

Source - BBC News Article from Sept. 2007 http://news.bbc.co.uk/2/hi/americas/4676435.stm

Human Rights Issues

Slave Labor

• An estimated 40,000 Brazilians are working under slave labor conditions with no real wages at work camps or on large farms -- recruit below the poverty line by making false promises of job recruiters and opportunities to make money for food.

"Poverty fuels slave labor."

• Last year, a special government task force free more than 4,500 workers in 133 raids on large farms and businesses. Government officials are aggressively trying to eradicate slave labor within the country.

• The slaves living in these work camps live in wooden shacks with no electricity, no toilets or plumbing, no shoes or the proper tools for work. The "slaves" are drinking unsanitary water. They live within dangerous jungle conditions and are so far removed from their homes, that without proper transportation, they are basically trapped.

Police Violence

• hrw.org - Human Rights Watch published an April 2008 Universal Periodic Review of Brazil. These were some of the findings:

• Police tend to pursue abusive practices instead of following sound policing policies. Brazil experiences 50,000 murders per year. Much of this is due to violence among gangs and impoverished areas within the country. The police contribute to this death toll as well -- in many cases, "resistance followed by death." Furthermore, there are various reports of Brazilian police and prisons using torture for coercing confessions.

• There are countless reports on inhumane prison conditions due to violence and overcrowding. There are hundreds of deaths per year within the prison system. Last year, capacity was reportedly exceeded by 200,000 inmates. Prisoners and delinquents live in rat-infested conditions, with a lack of medication, poor water quality, and diseased pigeons.

In 2004, the Brazilian government made a constitutional amendment stating that human rights crimes are now federal offenses!