The two key issues of instability present in Brazil as one of the emerging large economies that are challenging to a business wishing to invest there

Brazil is the largest nation state in terms of geography as well as population in South American continent. It has abundance of natural resources, rich culture, history, architecture, music and sports loving population. Brazil is one of the large emerging economies of the world as of now having membership in influential group of nations like G20, BRICS and many other regional groupings. This is a developing country with population somewhere above the average middle per capita income. It has been playing a peaceful role in building healthy relationship with other countries across the globe.

However, following are the two measure problems and their respective solutions, which inhibits global businesses wishing to invest there - ?

(i)??????????????Prevalence of corruption and crime: corruption is a major problem for this great nation’s people, as the person’s sitting in the top most political leadership roles have been charged with corruption in last few years and decades. This has caused greater amount of political instability within the country due to discontinuity of political leadership. Accordingly, the policies related to socioeconomic and political upliftment of the common people, small, medium and large businesses, farming community and other sectors of the economy. The populist measures taken by President Louis Inacio Lula Di Silva and other such presidents who continued for substantial period of time to lead the country. This continuity built the country to progress on the pathway to grow in internal and external investor community, also in building foreign relationship with leading countries of the world including BRICS and G8 countries. Thereafter, president Dima Rousseff was there for some time at the helm of affairs. She was charged with corrupt practices and thereafter there had to be impeached in 2016 and then it led to the change of guard. Such kind of corrupt practices are there at all levels of national, states and local governments in political leadership and bureaucratic and clerical staff. This has been a cancerous disease for the entire system of the country to which the business community has to deal with. It causes policy paralysis, policy unpredictability and policy inaction. Due to lack of forward looking long term visionary leadership who can sail the country through this entire volatile times and can make the systems and procedures and practices of the country completely corruption free, crime free, transparent and accountable, then the country can leapfrog to higher income levels within a very minimal time frame compared to other countries. The situation of violent crimes, gun crimes, homicides, etc. has been a serious cause of concern in this country. This has caused fear and terror in the business community also. Due to which senior executives and top bureaucrats and normal citizens are not able to do their businesses in free, fair, fearless and transparent manner. Hence the entire economy is not able to flourish with its full potential due to indignation and frustration accumulated over decades from corruption, policy brutality, in efficiencies of political establishment and public services.

(ii)?????????????Social inequality: Brazil has very high social inequality. Its six richest persons have the same wealth as the poorest 50% of the population, which is around 100 million. At the current pace of progress, the Brazilian women will close the wage gap in 2047. Black Brazilians will earn the same income as whites in 2089. Therefore, Brazil is decades away from wage equality. (source: Oxfam website). This is serious cause of concern not only for the governments of the country and its states and municipalities, but also the business organizations in private and public sectors, non profit organizations, NGOs, foreign donors, Multilateral agencies, etc. as well. Such kind of social inequality can cause any kind of social unrest at any point of time, just on the trigger by some aspiring populist leaders at local or national level. Already, there is higher level of homicide, therefore the inequality need to dealt with by appropriate policy measures, by all stakeholders. The policy planning as well as proper execution to build a required ecosystem for social security, income security, job security, social inclusion, financial inclusion, etc. need to be build upon. This will ensure a peaceful environment for the investors to invest and work there, by minimising the country risk, political risks and transaction risks, etc. as well. Skill development and entrepreneurial opportunities added with adequate support for credit linkage, market linkage and supply chain linkages, infrastructure linkages, etc. will connect the hitherto left behind poor population to connect with the mainstream through different ways.

Brazil is really a great country to invest. There may be some investor specific issues specific to this great country, as every country in the world has many kinds of its general or specific issues, which provides challenges for investors, which if dealt with in positive manner, provides a gateway of opportunities for contagious prosperity for everyone in host as well as investor’s home country. I hope that the current and future leadership of Brazil will successfully handle such issues and will become a truly developed nations along with other BRICS counterparts in coming decades.?#globalization #Brazil