US Regions Waking Up to Opportunities in Brazil: Global Trade Overcomes Insular Outlook; Florida Recommits

The BRIC countries present a vast potential business development target for US companies. Multinational corporations have long understood this, but the recession and its lingering unemployment are driving once-insular US regions and the small. medium enterprises they foster to open their minds and purse strings to these possibilities. Florida, with a famously stingy legislature and governor, is rethinking its foreign marketing approach.

Mimi Whitefield, in the Miami Herald describes how this reality is affecting Florida:


"Brazil’s economy is booming. Prices for its commodities are stellar and unemployment is at record lows, but panelists at a Miami conference said there could be some clouds on the horizon.

Among the concerns are a growing current account deficit, an overvalued real, and mounting inflation, which could top 6 percent this year, said participants at “Forecast 2011: Economic and Political Risk Scenarios for Latin America.”

The conference, which was held Friday at the Four Seasons Hotel in Miami, was organized by the University of Miami’s Center for Hemispheric Policy.

Government spending is now growing faster than Brazil’s economic growth, said Amaury de Souza, a Brazilian who is a visiting fellow at the Center for Hemispheric Policy.

That means Brazil’s new president, Dilma Rousseff, faces a difficult balancing act of trying to finance the current account deficit, maintaining her predecessor’s expensive social programs and keeping the economy growing.

“There are growing imbalances” with the current account deficit increasing and domestic demand rising, said Kathryn Rooney Vera, senior economist at Bulltick Capital Markets in Miami.

“Brazil cannot postpone essential fiscal reforms,” de Souza said.

But Richard Feinberg, a professor at the University of California San Diego, expressed optimism about the economic strides Latin America has made over the last two decades.

“Latin America has been undergoing tough, difficult, sometimes painful reforms,” he said. “Now we are seeing the payoffs.”

Among the accomplishments, he said, have been reduction in poverty and better income distribution — areas in which Brazil has excelled.

In another two decades, joining “the club of most advanced nations” is a possibility for some Latin American nations, said Alejandro Foxley, the president of the Corporation for Latin American Studies in Santiago, Chile, but he said it depends on their political trajectory.

“There is no substitute for representative democracy,” said Foxley, Chile’s former minister of foreign affairs and minister of finance. And, he said, the countries of the region need to exercise “democratic rigor” — in other words “abiding by the agreed upon rules.”

Right now Latin America is riding a commodities boom, largely sustained by the surging Chinese economy. But as commodity revenues are flowing in, Foxley said, Latin America countries should concentrate on improving infrastructure, increasing productivity and diversifying their economies.

Florida in Brazil

After an absence of two years, Enterprise Florida reestablished a Brazil office last week to promote Florida products and services and to help Brazilian companies interested in investing in Florida.

Manny Mencía, Enterprise Florida’s senior vice president for international trade and business development, said reopening the Brazil office, located in Sao Paulo, is part of a broader strategy, the Brazil Market Expansion Initiative.

The initiative will help smaller and medium-sized businesses enter the Brazilian market by identifying export sales leads, showcasing Florida products and holding “road shows” to familiarize Florida companies with Brazilian opportunities and business practices.

Enterprise Florida plans to have a pavilion at Hospitalar, Latin America’s largest health technology show, in Sao Paulo on May 24-27, and is planning an Export Florida exhibition, showcasing Florida products, and a trade mission to Brazil this fall.

Among the products with the most potential in Brazil, Mencía said, are: aviation parts and equipment; airport-related products; equipment for the telecom, transportation, electrical power generation and healthcare industries; safety and security equipment; environmental technology; computer software; and drugs and pharmaceuticals.

Brazil is also in the market for mining and oil and gas equipment, although these industries aren’t Florida’s strong suit.

Mencía said reopening the Brazil office, which had been axed due to budget constraints, will “enhance Florida’s visibility in Brazil significantly.”