After electing a pro-business president who is committed to anti-corruption, Brazilians send a message to the world: “dear investors, please come back”.
Concerns about Bolsonaro
Some concerns may arise, of course. Is this Bolsonaro guy a dictator? Will he turn Brazil into a populiste society? My short answer is: No and No. In fact, investors seems to have understood this better then the international press.
As Jean van de Walle’s explains in his blog, The Emerging Markets Investor, there is a disconnect between the Brazilian electorate and the “furious criticism” expressed by the foreign press. Walle points out that the high esteem which the international press still holds for former President Lula, despite the fact that he was convicted for corruption. The basic divergence can be explained by the almost exclusive focus of the foreign press on public persona. “Lula is remembered as an endearing and charismatic crusader for the poor, (… while) Bolsonaro is taken to task for a history or rude and politically incorrect statements on socially sensitive issues.”
The business community seems to have understood this better then the press. Some companies have already announced they will be investing in Brazil. The Brazilian stock exchange index Ibovespa is up.
Brazilian investment bank Itau’s report last week points out that Bolsonaro will face several challenges. Legislative reforms will impact Brazil’s fiscal situation.
Staying on top of the opportunities
Companies targeting emerging markets can not forget that Brazil has a population of over 200 million. It is time to assess industry competitiveness and market segmentation. The goal is to combine performance, market perceptions, strategic analysis, growth potential and specific industry dynamics in Brazil.
These issues are the top of the iceberg. They are part of a study I prepared about the new investments opportunities in Brazil. I will be happy to talk about it.