Melting Pot

The Brazilian Melting Pot
History. Geography. Economy. Outlook
Paulo Rabello de Castro
July 2013
Chapter I - History
1500... Adam and Eve
• Adam, the Portuguese Navigator
• Eve, the native womb
• Partitioning the land
Hereditary Captainships
• Settling in and getting lost
16001600-1700... Golden and Sweet Country
• One law, one language
• Enlarging the territory
• Slavery: Africa comes to America
• The mestiço: a Brazilian is born
1800... A Tropical Empire
• Europe comes to Brazil
• A Tropical Empire
• The Education of a Prince
• The Constitution of a Nation-State
• Neighbours at sight
• Coffee as Culture
Swiss Immigration in Brazil
Establishment of the first colony in Nova Friburgo (1819)
1900... Rounding up the ball
• The world comes to Brazil
• A melting pot
• Soccer, for all
• Voting Ballot, for all
2000’
2000’s... Going forward
A New Generation
The Same Brazil
Chapter II - Geography
Brazil: Urban vs. Rural Population
(million people)
180
160
140
120
Urban Population
100
80
60
Rural Population
40
20
0
1940
Source: IBGE
1950
1960
1970
1980
1990
2000
2010
Brazil: The Most Urbanized BRIC
100
91
90
1980
80
2005
70
70
2025
60
83
80
74
66
58
%
50
30
40
38
40
29
24
20
20
10
0
Índia
China
Russia
Brazil
Brazil:
Brazil: Population Pyramid (1980)
- Pensions
- Old-age health
- Technical skills
- Savings
- Basic education
- Infant Health
MEN
Source: IBGE
WOMEN
Brazil:
Brazil: Population Pyramid (2010)
- Pensions
- Old-age health
- Technical skills
- Savings
- Basic education
- Infant Health
MEN
Source: IBGE
WOMEN
Brazil:
Brazil: Population Pyramid (2030)
Projected
- Pensions
- Old-age health
- Technical skills
- Savings
- Basic education
- Infant Health
MEN
Source: IBGE
WOMEN
North Westward Expansion
10’s
Amazônia
90’s
10’s
00’s
00’s
90’s
70’s
80’s
10’s
00’s
90’s
10’s
60’s
50’s
10’s
Brazil’s Ranking in
World Export
Bovine Meat: # 1
Poultry Meat: # 1
Orange Juice: # 1
Coffee: # 1
Sugar: # 1
Ethanol: # 1
Soybean: # 2
Pork Meat: # 3
Cotton: # 3
15
Investment Vectors
Agricultural Backbone =
“Tropiculture”
Oil and Gas
Service economy
and labor intensive
industries
Service economy and
hi-tech industries
Mineral provinces
Forest Conservation
Major challenge: infrastructure
Multi – Modal
Transport Network
D1
N1
N4
N3
N5
D3
D2
17
Chapter III - Economy
Brazil: GDP Real Growth
13%
11%
9%
7%
5%
3%
1%
-1%
1910
1920
1930
1940
1950
1960
1970
10- year moving average - Source: IPEA (1901-47), IBGE (since 1948)
1980
1990
2000
2010
2020
Brazil: what has changed in a reliable way?
The New Constitution
1988
1) The Rule of Law
Collor’s Impeachment
1992
1994
1999
2008
2) Price Stability
The Real Plan
Flexible Exchange Regime
3) External Accounts
The end of Debt
Brazil:
Brazil: Public Debt / GDP
75%
70%
65%
60%
GROSS DEBT
55%
50%
45%
40%
NET DEBT
35%
30%
Jan-04
Jan-05
Jan-06
Source: Brazilian Central Bank
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Brazil:
Brazil: Foreign Direct Investment
80
US$ billion , 12 months accumulated
60
40
20
0
jan/05
jan/06
jan/07
Source: Brazilian Central Bank
jan/08
jan/09
jan/10
jan/11
jan/12
jan/13
Brazil:
Brazil: Investment / GDP
22%
Challenge
20%
18%
16%
14%
12%
95
97
99
01
Source: IBGE. Forecast: RC Consultores
03
05
07
09
11
13 F
15 F
Chapter IV - Outlook
Brazil:
Brazil: Credit / GDP
60%
Total Credit (% GDP)
55%
50%
45%
Forecast
40%
35%
30%
25%
mar-07
dez-07
set-08
Source: Brazilian Central Bank
jun-09
mar-10
dez-10
set-11
jun-12
mar-13
dez-13
BRAZIL: BASIC INTEREST RATE
20
Forecast
16
13,75%
12,5%
11,25%
12
8,75%
8,75%
7,25%
8
4
jan/06
jan/07
jan/08
jan/09
jan/10
jan/11
jan/12
jan/13
jan/14
Source:BACEN
Forecast: RC Consultores
26
Brazil: Net Jobs Created
2,6
(Million jobs)
12 Month Accumulated
2,2
1,8
Lula's 2nd Term
1,4
Dilma's 1st Term
Lula's 1st Term
1,0
0,6
0,2
jan/01
jan/03
Source: Ministry of Labor
jan/05
jan/07
jan/09
jan/11
jan/13
LongLong-term Challenge
Toward a High-investment Model
And
Strong Wealth Access for the
Emerging Poor
Challenges to overcome
•Heavy
Heavy tax burden
•Bureaucratic
Bureaucratic jungle
•Infrastructure
Infrastructure deficiencies
•Education
Education backwardness
•Slow
Slow Innovation
29
Building a Democratic Society
4-Way Access toward Prosperity for All
1 PROPERTY RIGHTS
2 FUNDED SOCIAL SECURITY
3 MASS “WEBWEB-UCATION”
UCATION”
4 GREEN FOOTPRINT GROWTH
World GDP Ranking in 2050
US$ trillion (2010)
60
BRICs
52
Advanced economies
50
N - 11
43
40
34
30
25
22
20
11
10
8
5
5
5
5
4
4
da
Cana
6
Egyp
6
any
Ger m
7
ce
Fran
7
4
4
0
stan
Paki
It aly
t
ey
Turk
esia
ria
Nige
UK
n
Indo
ico
Mex
n
Japa
ia
Russ
Area
il
Braz
Euro
India
USA
N-11
a
Chi n
Forecast: RC Consultores
31
2050 World GDP: The TripleTriple-B Approach
US$ trillion (2010)
70
60
60,0
...Blocs
...Bachelors
...Brides
50
44,6
40
30
25,0
22,3
22,0
20
10,5
10
11,5
8,0
7,0
9,8
8,3
0
BroadChina
NAFTA
Forecast: RC Consultores
In 2010 prices
Euroland
India
Brazil
Russia
Japan
Southeast Asia
Africa
South America
w/o Brazil
Middle East
Possible World blocs in 2050
GDP - US$ trillion
80
3 World Blocs and 2 "Projects"
71,3
70
60
56,2
50
38,0
40
32,4
31,1
30
20
10
0
China Plus
- BroadChina
- 1/3 Africa
- 1/3 Southeast Asia
Forecast: RC Consultores
NAFTA Plus
- NAFTA
- 1/2 Middle East
- 1/3 Southeast Asia
"Euroland" Plus
- EU
- Russia
- 1/3 Africa
- 1/2 Middle East
India Plus
- India
- 1/3 Southeast Asia
Brazil Plus
- Brazil
- Japan
- South America
- 1/3 Africa
Another possibility:
possibility: World blocs in 2050
GDP - US$ trillion (2010)
80
3 World Blocs and 2 "Projects"
71,3
70
60
49,7
50
38,0
40
37,6
32,4
30
20
10
0
China Plus
NAFTA Plus ex-méxico
- BroadChina
- 1/3 Africa
- 1/3 Southeast Asia
- NAFTA w/o Mexico
- 1/2 Middle East
- 1/3 Southeast Asia
"Euroland" Plus
- EU
- Russia
- 1/3 Africa
- 1/2 Middle East
Forecast: RC Consultores
LatAm Plus
India Plus
- South America
- India
- Japan
- 1/3 Southeast Asia
- Mexico
- 1/3 Africa
The New U.S. “Long Range Diplomacy”
Diplomacy”
NAFTA
TPP
TTIP
A Different Scenario
GDP
- US$ trillion
80
71,3
70
3 World Blocs and 2 "Projects"
69,4
60
50
38,0
40
37,6
30
17,8
20
10
0
China Plus
- BroadChina
- 1/3 Africa
- 1/3 Southeast Asia
NAFTA Plus
- NAFTA
- 1/2 Middle East
- 1/3 Southeast Asia
- Japan
- 1/4 South America
- 1/3 Africa
Forecast: RC Consultores
"Euroland" Plus
- EU
- Russia
- 1/3 Africa
- 1/2 Middle East
India Plus
- India
- 1/3 Southeast Asia
Brazil Plus
- Brazil
- ¾ South America
THANK YOU! TALK TO US
Paulo Rabello de Castro
[email protected]
Thiago Biscuola
[email protected]
Marcel Caparoz
[email protected]
www.rcconsultores.com.br
RC Consultores has prepared this report using information available until July 08, 2013. Despite of taking care on data accuracy, RC Consultores is
not responsible by the information full accuracy that can eventually
eventually be incomplete and / or resumed. Also, RC Consultores is not responsible by
assets
ssets and / or indicators behavior mentioned here.
any decision that was taken considering the prognostics on the a