Brazil upgraded to Investment Grade

Last week, Brazil was upgraded to Investment Grade ( triple B minus ) by Standard and Poor. This is a reaffirmation of the health and soundness of the Brazilian market which has got its fundamentals right. International economic experts have concluded that Brazil has finally come out of its boom and bust cycle. Brazil is the third country after Chile and Mexico to get investment grading.

Last year the growth was 5.4 % and in 2008 it is expected to be around 4.8 %. Inflation has fallen. Primary budget of the government has been in surplus. Exports are booming thanks to the high demand and price for its agroproducts and minerals. Brasil´s stock market Bovespa has risen by 14 percent this year, while the stock markets around the world are getting beaten.

Foreign direct investment in 2007 was 34 billion dollars. At the same time Brazilian companies have been on an acquisition spree of land, assets, mines, factories and business in the region and outside. CVRD bought a Canadian co for about 15 bilion dollars, the largest acquisition by any Latin American company.´

Brazil is already an agricultural power with its large fertile land and high exportable surplus. It can bring in more land under cultivation without affecting the Amazon.

The recent discovery of large new oilfields has put Brazil in the same league as the OPEC members. Brazil is already the world leader in fuel ethanol.

Brazil´s agricultural strength combined with its energy surplus has given it an edge in these days and coming years of global concern with the rising prices and demand for fuels and food.

What is remarkable is the change in the mindset of Brazilian business and political leaders. They are putting their act together to make the country as a global leader. President Lula has announced support for the Brazilian companies to become multinationals. He wants to create a large Brazilian giant in pharma sector through merger of some existing companies. Brazilian government and business are reaching out to Africa, middleeast and Asia.

Politically, Brazil has set an example in the region for achievement of equilibrium between pro-poor and pro-business policies, pleasing the Wall Street and Favelas with equal earnestness. This is important since progress of some countries in the region have been hampered by domestic ideological conflicts and divide between government and private sector.

Even my Argentine business friends have expressed admiration for the new energy, vision, ambition and aggressiveness which drive the Brazilian business.

What is even more remarkable is that despite the growing strength on its own , Brazil is strongly commmited to regional integration through Mercosur and Unasur. The Brazilian leadership takes their Mercosur partners into confidence while strategising their future. They leverage the collective strength of the region to reinforce their own.

Viva Brazil !!!