Sunday, August 22, 2010

World cup and Olympics - Game Changers for Brazil

Brazil is going to host the World Cup football in 2014 and Olympics in 2016. These are not just games... but are game changers for the New Brazil. The Brazilians are using these two events to build the foundations for a New Brazil and showcase their arrival as a global economic and political power.

Brazil is the eighth largest economy in the world with a GDP of 1.5 trillion dollars and is expected to climb up to the fifth rank by 2016. In the first quarter of 2010, the Brazilian GDP grew by a record 9% and the estimated growth in 2010 is 7.6%, the highest in Latin America. Brazil is a superpower in agriculture with its growing output, exports and increase in the area of production. With the recent discoveries of large new off-shore oil fields, Brazil is emerging as an important global supplier of petroleum. Brazil is already a pioneer and leader in fuel ethanol programme with 90% of cars running with flexi fuels of petrol and ethanol.

The preparation for the games opens up projects worth $220 billion from 2011 to 2014.
Here are some samples:
-US$ 5.5 billion to improve transportation in Rio in preparation for the Olympic games
-A high speed bullet train at a cost of 18.7 billion $ is being developed and is expected to be completed in time for the World Cup
-plans for 11,700 miles of railroads facilitating improved access to the 12 cities hosting the World Cup
- US$ 43 billion will be spent on commercial and tourism construction in preparation for the 2014 World Cup
-US$ 3 billion in airport expansion and improvement.
-restoration of historic buildings and renovation of Rio de Janeiro city
- budget for the Games alone will be about $15 billion

A Conference is being organised in Sheraton Hotel, Rio de Janeiro on 31 August- 1 September on the infrastructure projects for the two events. Federal and provincial authorities, bankers and local and foreign companies will participate in the conference.

President Luiz Inacio Lula da Silva launched on 29 March 2010, a $878 billion program to upgrade Brazil's infrastructure in the period 2011-2014. The plan will improve access to clean water, medical posts and energy as well as modernize the country's air, road and rail system.

The energy part of the plan envisages investment of 257 billion dollars. This includes the five year plan of Petrobras, the Brazilian energy giant to invest 220 billion dollars, the largest corporate investment in the whole world at this time. In 2010, Petrobras will invest 20 billion dollars in exploration and production and 17 billion dollars in refining and petrochemicals, with the remainder going toward areas such as distribution and biofuels.

Some of the other infrastructure projects are:
-construction of Angra III nuclear power plant
- construction of The Belo Monte 11.2GW, US$ 4.1 billion hydropower plant
- Jirau hydropower plant costing US$ 3.1 billion
- US$ 152 billion for the construction of low income housing over the next 15 years

The Indian exporters and business houses should focus on Brazil for exports and projects for the games projects. India´s exports were 2.19 billion dollars in 2009. The target should be atleast 7 billion dollars by 2014.

1 comment:

Anonymous said...

I am so happy that Latin America represented here by Brazil is finally getting the recognition that it deserves.
This emergent market is showing very strong positive growth that is finally drawing the foreign investment opportunities.

Brazil definitely stand outs as a secure investment bet with its current resource findings that insures that it will be able to sustain it economic growth without dependence on natural resources from other countries. This puts them in a very unique position to compete on an international level.

I am looking forward to see their development in their future

Business Latin America