TAMPA, Florida - Dec 4, 2007 (BRAZLIAN CHAMBER BUSINESS WIRE) -- Few trade missions have been as successful as the one lead by the governor of Florida, Charlie Crist. Attended by over 200 people, the participants had the chance to contemplate great business opportunities in Brazil, particularly in São Paulo.

Occupying only 3% of the Brazilian territory, São Paulo concentrates 22% of Brazil’s population and stands for 34% of its GDP, accounting for 41% of Brazil’s total industrial GDP, 62% of financial transactions, 41% of total imports and 32% of total exports. It is also worth mentioning that about 75% of Brazil’s exports are performed by companies based in São Paulo and FIESP members, where participants had a business meeting accompanied by a welcome meal and honors in the last event.

Approximately 45% of domestic flights made worldwide - including the US - are performed by Embraer airplanes, a Brazilian aircraft manufacturer based in São Paulo with a branch in Fort Lauderdale. About 53% of cars manufactured in Brazil are produced in São Paulo, as well as 70% of sugar and fuel ethanol.

Over 60% of Brazil’s capital goods are produced in this state as well as 40% of refined petrol. A huge petrol deposit has been found recently off the coastline of São Paulo, which will represent a 50% increase in Brazil’s petrol production and therefore take it into its self-sufficiency in petroleum by 2011.

The Great São Paulo’s territory has the extension of Jamaica, comprising 3,100 square miles and 18 million inhabitants – it stands for 16,7% of Brazil´s GDP and for a US$5,545 per capita income.

Through the inflation rate fluctuation, Brazilian economy stability may be dimensioned: at 2.708% in 1993 when it started to fall, remaining at 4% (or even lower) on the average, as a result of a sustainable economy performance - after changing presidents and parties in the past 15 years, economy policies were respected and strengthened even by the current president, of humble origin and from the labor party.

On the other hand, foreign investors’ trust can be confirmed by a significant drop in the country risk index: from 2000 when President Lula was elected to less than 200 these days.

The exchange rate in real per American dollar reached a peak in 2002, when US$ 1 was worth R$ 3.85. Nowadays, we notice a decreasing drop – to a US$ 1.00 /R$ 1.75 rate.

Such figures, combined with an estimated 5% increase in the economy for this year, has turned Brazil into an export icon, projecting a 28% increase in 2007, beating US$ 120 billion. Even dealing with growing imports, Brazil will keep a significant trade surplus, since its exports are expected to reach over US$ 155 billion.

Brazil’s trade performance in the past years and the flow of foreign investments has lead Brazil to an excellent place in its dollar reserves, with an approximate US$ 170 billion for a total US$ 180 billion external debt. In relative terms, external debts have dropped from 42% GDP in 2002 (US$ 211 billion) to 14% (US$ 185 billion) in 2007. Reserves are expected to surpass debts in a few months. Soon Brazil may be “Investment Grade” awarded – allowing the country to have more than US$ 25 billion in foreign investment, particularly in investment funds.

By the end of 2007, Brazil may purchase 2.5 million cars, 9,5 million computers and 50 million cell phones. Such significant growth must be taken into consideration: in comparison with 2002, it will stand for a 194% increase in cell phones, 642% in DVDs, 190% in PCs and 78% in cars.

Where will Brazil be placed now?

• Growth and investment have accelerated from a low baseline.
• Stable inflation is permitting continued monetary expansion.
• Fiscal performance is solid though key challenges lie ahead.
• External accounts (stocks and flows) are in strong shape.
• Financial vulnerabilities (domestic and external) are low.
• Parameters of political debate have narrowed significantly.

Brazil is not a “bubble economy.”
Recent progress reflects favorable external factors but also much-improved economic fundamentals.

• Sharp decline in political risk – Lula has been orthodox and pragmatic.
• Disinflation was a key catalyst – provided a stabilizing price anchor.
• Trade reversal – surplus improved balance sheets and external risk.
• Fiscal policy – primary surpluses helped debt dynamics and stability.
• Confidence and spending took off – fueling domestic demand.

This reality has contributed to the negotiations American companies made in Brazil giving them a great opportunity to succeed.

Mr. Barbieri would like to thank Senior Commercial Service Officer Danny DeVito for contributing key information and data to this article.

About the Author

Mr. Barbieri has worked as a noted consultant in over 70 countries and has the knowledge and experience of performing the best practices in business process management.

Executive Director and a business-partner member of banks, industries, retailers, trading, forwarding and logistics.

He is currently a consultant for foreign companies in Brazil and Brazilian companies who want to do business abroad.

Currently he is the president of Oxford Group, G. Miller, Brazilian Business Group. He is also a member of Grupo Brazil and Board of Deerfield Chamber of Commerce.

Author of hundreds of published articles, Mr. Barbieri has been an international correspondent for the Banco Hoje - a Brazilian magazine - for the last 10 years.

He is also Author of the book called "Abuso do Poder Econômico" (The Abuse of Economic Power) and Co-Author of many other books, such as "História do Brasil" (History of Brazil) of Editora Maltese and "Meandros do Congresso Nacional" (Hyndrances of the Legislative Power) of Editora Forense.

Brazilian American news coverage by Brazil-Tampa Bay Chamber of Commerce - www.BrazilTampa.org