Brazilian fever is on the rise. In the midst of a heavy crisis shaking Europe and the United States, the green-gold giant has become the dream of many Europeans seeking their fortune overseas. Economic and political stability, a favorable climate, a welcoming people and exponentially growing business opportunities have transformed Brazil into a promised land for investors, but above all into a trendy country.
Yet considering Brazil as a single nation is misleading and inaccurate. If you take into consideration the social, economic and geographical conditions the country can be divided into five macro regions, very different from each other. Anyone intending to invest in the green-gold colossus must therefore deepen their knowledge of a state which, to make the idea better, it extends over an area slightly smaller than that of the old continent.
A research conducted by the Centro de Liderança Pública and the Intelligence Unit of the English The Economist has therefore compared the regions of Brazil and compiled a ranking to guide investors. As reported by the Brazilian magazine Veja, in fact, foreign direct investment surpassed the record figure of 2011 billion dollars in 60.
The ranking revealed that the states of São Paulo, Rio de Janeiro, Minas Gerais, Rio Grande do Sul, Paraná, Distrito Federal and Santa Catarina are the only ones that have a good environment for doing business in the manufacturing sector of the country. São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Brasília, Curitiba and Florianópolis (capitals of the states mentioned above) are the cities that drive the green-gold economy. Forecasts indicate that also for the years to come the southern and southeast regions will continue to be the Brazilian driving force.
Despite the small steps forward that have taken place in the main cities of the northeast in recent years, from Salvador to Natal, via Fortaleza and Recife, and which bode well for the future, in the rest of the country (especially in the vast regions of the central-west and the deep north) high taxes, bureaucracy, lack of adequate infrastructure and skilled manpower continue to be the factors most frighten the influx of foreign capital.
"The State of São Paulo has the best ´ecosystem` for doing business. It has political stability, top universities, a good infrastructure and an established service industry. It only needs to simplify its tax system,” explains Luiz Felipe D'Avila, director of the Brazilian institute that conducted the research.
Of all the factors taken into consideration, São Paulo ranks first as an economic environment favorable to business, innovation and skilled labour. It enjoys good investment incentive policies and from the point of view of infrastructures it is the most advanced region of the country.
Rio de Janeiro too boasts good investment incentive policies, a tax system among the best in Brazil and capacity for innovation. Compared to São Paulo, the weak point is the infrastructure, even if in view of the upcoming sporting events (World Cup in 2014 and Olympics in 2016) substantial improvements are expected. Even the state of Minas Gerais is confirmed as one of the favorite regions for foreigners to do business, even if the lack of infrastructure can be a brake on investments.
Bringing up the rear is instead the State of Piauí, on the northern coast of Brazil: public institutions trudge amidst corruption and inefficiencies, infrastructures are up to scratch, while policies to attract capital are practically non-existent.
Before letting yourself be enchanted by the sirens of the South American giant's economic boom, it is therefore good to carefully analyze the possibilities, but also the limits that such an inhomogeneous country presents. Otherwise the dream of moving to an earthly paradise, in the shade of a palm tree facing the ocean, seriously risks turning into the worst nightmare.
Watch ranking of Brazilian states published in Veja magazine
