Brazil needs more LatAm presence to gain global heft

Brazilian University and think tank Fundação Getulio Vargas produces some interesting thought pieces in its monthly English-language magazine, the unimaginatively entitled “The Brazilian Economy”. Most recently, the magazine has been questioning how Brazil defines itself in Latin America and the world and argues that until Brazil consolidates its position in Latin America, it will gain little global traction.

Latin dominance looks far off. Instead, Brazil is focused on a sniping trade battle with Argentina, which has been fuelled in recent weeks by the latter’s president Cristina Kirchner and her peculiar brand of isolationism. Brazil’s own protectionism is sapping Mercosul and wider economic ties in the region. The article cites Ricardo Lagos Weber, former trade negotiator as saying: “it’s no secret to anyone that Brazil’s Foreign Ministry has never liked our policy of trade integration.”

As Mercosul dies on its feet with its main partners pursuing beggar-my-neighbour policies, other countries that have developed an economic model of openness are forging ever-stronger trade ties. Chile, Colombia and Peru are promoting a common FX and share platform and working on eliminating trade barriers, which they hope will give them more negotiating clout with Asia and the US.

The article points out that if Brazil wants to carve out a role for itself on the international stage, it will need first to assert itself in Latin America and define what it stands for. Instead, Brazil remains isolated in many areas on the continent. That leaves key foreign policy issues such as a permanent seat on the UN Security Council out of reach. David Cameron, prime minister of the UK, has lent his support but the US and some Latin countries, Argentina and Mexico in particular, remain reticent. Brazil needs to learn to run before it can fly.

About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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