December 19th, 2010
08:45 AM GMT
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A rare note of caution coming from UK businesses, in reference to BRIC economies.

The business advisory firm, Deloitte, has released its annual entrepreneurship report.  It surveys about 350 entrepreneurs across the United Kingdom, and finds that the UK, Western Europe, and North America remain the preferred markets for growth.

Surprisingly, there’s an abundance of caution towards the BRIC nations, even though Brazil, Russia, India, and China represent 70% of global growth.   Among the entrepreneurs surveyed, just 1.5% consider China as a prospect for the growth of their business.  Less than 1% choose India and Brazil, and just 0.3% like Russia, despite its resurgent market.

Specifically, the survey asked: “Which geographic market represents the best opportunity for significant growth for your business over the next three years?”  Expansion plans are predominantly focused on the UK market, although North America grew in favor over the previous year.  Very few entrepreneurs are targeting the BRIC.

The head of Deloitte’s entrepreneurial business team, Tony Cohen, says “there’s less optimism and more caution for the BRIC because doing business there… opens up new risks.  One has to look at culture, regulations, contacts, systems… North America speaks the same language. Western Europe is much closer.”

While entrepreneurs may be wisely managing risk as the economy recovers slowly, are they also missing out on opportunities in the fast-growing BRICs?   Tony Cohen says, “It’s always possible…. But UK businesses appear happy to build growth in the UK for now, with a view to expanding in due course.”

The survey also finds that more than half (55%) of entrepreneurs surveyed expect short-term negative effects as a result of financial pressures on their business.  However most report no change in their overall strategy as a result of the difficult economic times.



soundoff (92 Responses)
  1. Ray

    This doesn't surprise me in the least that companies are not interested in expanding consumption the BRICs.

    Real consumer markets necessitate a freedom of capital movement, lack of corruption, and distribution of wealth that the BRICs quite simply do not provide. The export-oriented growth of the BRICs simply results in a wealth transfer to these countries' elite and the upper classes, who are loathe to use it to improve their own societies.

    The transfer that is therefore taking place is one from the (shrinking) middle classes in developed countries to upper classes in developed countries and the BRICs themselves. All of this is leveraged by using the 'cheap labor' supply in the BRICs.

    Until the middle classes in the developed countries have been bled dry, the process will continue. What comes after that is anybody's guess.

    December 19, 2010 at 10:19 am |
  2. Khurram

    These economies are hot but you cannot get s#%^ done without bribes.

    December 19, 2010 at 10:30 am |
  3. Suresh

    Pretty useless and biased report- future lies in BRIC and everyone knows this. CNN never did impartial reporting, so its not surprising

    December 19, 2010 at 11:29 am |
  4. Matthias

    I am an entrepreneur in Brazil, being a Swiss citizen who has been living here during the last 10 years. My company distributes generic drugs and cosmetics. I can testify that it is not easy to do business here for the reasons mentioned above: culture, regulations, contacts, systems. One might add the scarcity of qualified employees, which especially affects new companies with unknown names and limited budget. There are often times of enormous frustration; but then again, starting a new business or entering a foreign market is not an easy task anywhere in the world.

    But then again, I can also testify that there are numerous opportunities here, and other entrepreneurs I know and I myself keep on wondering why on earth foreign companies and investors seem to be so hands-off. I am not talking about the big ones, like Telefonica or Volkswagen, I am thinking more about mid-sized companies from the US or Europe, with innovative services and products. My message to them is: Brazil is a great business opportunity and this may be one of the best moments to enter the market! Don't be afraid, but be aware that "Brazil is not for beginners", as the musician Tom Jobin once said. I would be pleased to continue this conversation at olavi73@gmx.net.

    December 19, 2010 at 12:34 pm |
  5. DS Goenka

    Most entrepreneurs start with small business'. Small business' usually mean domestic growth (atleast to start with). This article in incomplete and misleading... it would've been useful to know – Are BRIC economies relevant to entrepreneurs!?! Why? Is this 'caution' a new phenomena? Do these entrepreneurs 'normally' deal with BRIC economies? Have they changed their stance recently? Without more information this article is redundant and simply a space filler... imparting no real information or knowledge

    December 19, 2010 at 1:28 pm |
  6. David

    Its more BIC than BRIC, russia isnt doing very well..

    And those countrys are only booming because the western world give them the money and the modern technology to do so..

    You also can only boom as long as you come from the bottom and to one day may reach the western standard..

    And to this western standard belong also real democracy, freedom and the protection of human rights and I dont see china or russia (india) booming in this.. so they may never really reach it..

    December 19, 2010 at 2:36 pm |
  7. Abu

    BRIC economies are booming. The USA has all the potential for a stron rebound to regain the lead given its technological advantage. But the leaders are too preoccupied with Iraq, Afghanistan and the middle east. And they are going to get bogged down in Korea too. Obama and co do not have enough attention on the economy. It is going to be a bad next decade for the USA if this continues.

    December 19, 2010 at 4:55 pm |
  8. tusky44

    Bollocks!

    The UK entrepreneurs are a bunch of tired clowns which is why they come up with rubbish excuses (speak the same language?). You should ask the Americans why they continue to use the UK to wipe their axe and ask them to jump high enough

    December 19, 2010 at 7:45 pm |
  9. Rodrigo Fonseca Ribeiro

    I beleive Deloitte is not a serious and credible firm. Here in Brazil Deloitte was involved deeply in financial fraud and scandals in november 2010. In fact, Delloite was directly involved with the accounting fraud of the Braziliam Bank called Panamericano as well as the fraud of the Braziliam Branch of the French Company called Carrefour. I guess we can compare both scandals with the scandal of the fomer accounting firm called Arthur Anderson in US in the case of ERON.

    December 19, 2010 at 8:33 pm |
  10. AD

    Dear,

    Why did you not mention some specifics about what entrepreneurs were asked these question? were they from service or manufacturing? that would make world difference. Just dont bring story to glamourise news. Give proper evaluation and not be a postwoman...

    December 19, 2010 at 8:34 pm |
  11. Jason

    You know, saying a country is having a booming economy at this time is like being the fastest retard in a race. It's not saying a whole hell of a lot.

    December 19, 2010 at 10:19 pm |
  12. kshah

    Booming they are, the future is for them, I personally think the Obama administration is corrupt and are some how being bribed to bring down the economy, anyways war shall start from 2012 onwards as the US has no other option of regaining their position at all.

    EU is also gutless, they're waiting to be instructed by US.

    December 20, 2010 at 2:21 am |
  13. José Henrique

    It occurs because people still see those countries as the stereotypes of third world that the media has created. For example, Brazil is always shown as a country full of miserables and forests, when, in fact, is a country full of cities, industries and investiments.

    December 20, 2010 at 11:46 am |
  14. Vitor

    Brazil is different from the other BRIC countries.
    Over the past eight years of President Lula's government, 30 million people have already left the poverty line and the middle class has become the majority in the country. Also in these 8 years we have generated 15 million jobs. Brazil has one of the largest agricultural areas in the world, year-round sunshine and industries do not exploit labor as in China, because labor laws are very favorable to employees.
    Brazil is the fourth largest owner of the automobile industry in the world, and most renewable fuels industry in the world, besides being self-sufficient in oil. If anyone doubts of a country under these conditions, I affirm that a person believes in stories of comic books.

    December 20, 2010 at 12:43 pm |
  15. Bruno J.

    In deed The BRIC's are booming and will continue to expand our global economy as future leaders. Though in this time of the game starting any business whats so ever is like comitting suicide. So don't blame on the BRIC's blame on the " whites with blue eyes" that the Brazilian President ounce said. They started this mess, and they will fix it dont get me wrong, but the world may not like the method on which USA and the European nations will use. It is no secret that we are leading to perhaps a new World War. Its the only way to boost up the economy, unfortunately.

    December 20, 2010 at 2:03 pm |
  16. David Thomas

    By the year 2025 or sooner, China will overtake the US to become the largest economy in the world, with the other "BRIC" countries (Brazil, Russia and India) joining them in the top 5. UK entrepreneurs, exporters, importers, investors and service providers should be paying close attention to the once-in-a-generation opportunities created by these significant developments. Never before in our lifetime has there been such an opportunity to get close to the countries that are shaping the future of global trade, investment and economic growth.

    Whether you are raising capital, expanding offshore, or looking for business growth, you can't ignore these emerging economic powerhouses. The global economy is now inextricably linked to the BRICs and smart and forward-looking businesses and entrepreneurs are looking to take advantage of the opportunities that are now presenting themselves in all of the BRIC countries on a daily basis.

    It would be a great shame if the UK, with its history as an exporting nation and expansionary mindset, missed out on this...

    December 20, 2010 at 10:55 pm |
  17. francovero

    Este é o sinal que faltava para haver o respeito, necessário, ao Brasil e aos outros emergentes componentes do BRIC.
    A grande arma deste grupo é a Guerra Cambial, com a qual estão determinando novas posturas do G8 quanto a sentar à mesa e negociar.

    VIVA O BRASIL! VIDA LONGA AO BRIC!

    December 21, 2010 at 5:40 am |
  18. emunadate

    maybe Israel should be considered...see this video...http://emunadate.blogspot.com/2010/12/intelligent-investing-with-steve-forbes.html

    December 21, 2010 at 5:16 pm |
  19. emunadate

    Take a look at Israel's economy...http://emunadate.blogspot.com/2010/12/intelligent-investing-with-steve-forbes.html

    December 22, 2010 at 5:03 pm |
  20. Leandro Moreti

    I'm brazilian and i think great for that, money and good things can't be just for few coutries...

    December 22, 2010 at 5:42 pm |
  21. Marcos.Baldin1951@itelfonica.com.br

    Allways the same, same but different.
    I recommend to Deloitte managers to go back to the school and try to learn more about Brazil and BRIC. Please, do a favor for us. Keep distance.

    Puts! #%!?*&

    December 22, 2010 at 6:37 pm |
  22. mark

    Oh well ! I'm pretty sure that the US government control CNN news. They're trying to do propaganda that US and European economy getting better. Is that a joke?

    December 22, 2010 at 7:05 pm |
  23. mark

    They just trying to atract some investiments to their countries, I don't blame them. But that is an old trick.

    December 22, 2010 at 7:15 pm |
  24. Faraz

    I agree with mark's commets. This is truely a baised propoganda to protect the so-called developed nations. These big firms need to look at flow of investment both human and capital from west to east. China, India, Korea and Indonesia are great performers in terms of world GDP growth rate.

    I am not sure about Brazil but definately it has one of the largest middle class population and has everything to get investor's attention.

    December 23, 2010 at 7:39 am |
  25. Gabriel Hnerique

    Brazil is different from the other BRIC countries.
    Over the past eight years of President Lula, 30 million people have already left the poverty line and the middle class became the majority in the country. Also in these eight years that have generated 15 million jobs. Brazil has one of the greatest agricultural areas of the world, year-round sunshine and industries do not exploit the work as in China, because labor laws are very favorable to workers.
    Brazil is the fourth largest owner of the automobile industry worldwide, and more renewable fuels industry in the world, besides being self-sufficient in oil. If anyone doubts a country under these conditions, I affirm that a person who believes in stories of comics.

    December 24, 2010 at 12:17 pm |
  26. Filipe Correia

    Brazil is different from the other BRIC countries.
    Over the past eight years of President Lula's government, 30 million people have already left the poverty line and the middle class has become the majority in the country. Also in these 8 years we have generated 15 million jobs. Brazil has one of the largest agricultural areas in the world, year-round sunshine and industries do not exploit labor as in China, because labor laws are very favorable to employees.
    Brazil is the fourth largest owner of the automobile industry in the world, and most renewable fuels industry in the world, besides being self-sufficient in oil. If anyone doubts of a country under these conditions, I affirm that a person believes in stories of comic books.

    December 26, 2010 at 3:26 pm |
  27. Oscar

    SELFISH REPORT HAHAHHA UK IS GOING DOOOOOWN SO FAST. POOR USA IS ALSO DOING SO BAD AND THE REST OF EUROPE IS STILL HOLDING ON, BUT WE DON'T KNOW FOR HOW LONG, BECAUSE THE OTHER COUNTRIES THERE ARE JUST NOT HELPING. PROBABLY THE BEST ONES AS FRANCE AND GERMANY WILL NOT WANT TO BE TOGETHER IN THE UNION ANYMORE, THEY ARE THE ONLY "GOOD" ONES SO FAR AND WON'T WANT TO LOSE FOR THE OTHER COUNTRIES. CRAZY AND WEIRD TEXT AND VIDEO HERE!!

    December 26, 2010 at 3:46 pm |
  28. Alberto

    Oh well ! I'm pretty sure that the US government control CNN news. They're trying to do propaganda that US and European economy getting better. Is that a joke? I am just posting this link on my blog to people see how information is still controlled or tried to be controlled nowadays.

    December 26, 2010 at 5:09 pm |
  29. John

    It occurs because people still see those countries as the stereotypes of third world that the media has created. For example, Brazil is always shown as a country full of miserables and forests, when, in fact, is a country full of cities, industries and investiments.

    December 26, 2010 at 5:13 pm |
  30. John

    I believe CNN and/or the people involved in this "report" and survey have not being impartial AT ALL. I believe this is a very selfish, not professional and childish journalistic reportage. It is too sad to see this things still happening. Too bad, because nowadays with all this technology and information people have it is not acceptable to have controlled information like this. The control is now on regular people's hand and they can understand what the real and trustworthy info are. Thanks liberty of expression, democracy and new technologies. Too sad CNN!

    December 26, 2010 at 5:14 pm |
  31. John

    It is too sad to see this things still happening. Too bad, because nowadays with all this technology and information people have it is not acceptable to have controlled information like this. The control is now on regular people's hand and they can understand what the real and trustworthy info are. Thanks liberty of expression, democracy and new technologies. Too sad CNN! I believe CNN and/or the people involved in this "report" and survey have not being impartial AT ALL. I believe this is weird journalistic reportage.

    December 26, 2010 at 5:16 pm |
  32. Matthias

    As previously mentioned here, I am an foreign entrepreneur in Brazil. The discussion here and some emails I received have inspired me to update my blog about some of my experiences of doing business in Brazil. If it is ok, I would like to communicate the link here:

    http://brazilbiz.blogspot.com/

    December 26, 2010 at 6:09 pm |
  33. adhirley delfini

    You just don't know anything about the BRICS. NOTHING!

    Superficial commentaries, trying to undermine our economies., just as usual...

    December 26, 2010 at 7:10 pm |
  34. Estevão Brito

    THE UNITED STATES AND EUROPE ALREADY WERE.
    NOW IS THE TIME OF THE BRICS.

    December 27, 2010 at 12:48 am |
  35. Argus

    I wonder why CNN displays such a shallow report. As a Brazilian citizen, living and working abroad for about 22 years, both in Europe and in the United States, all I can say is that I've been talking to many investors and CEO's from major companies. All they ask me is why on earth I am still living in Europe when the right place to be and do business now is Brazil, where the economy is leading along with China? FYI: Investors from the UK, Germany, Italy and USA have already posted the same question to me. Guess what?

    In June 2010, Brazil’s GDP expanded from 9% a year earlier faster than any other Latin American Economy. The Brazilian economy is now the 8th largest economy in the world. During the period 2004-2008, the economy grew at the rate of 4-5%on average. Many would consider this growth rates to be less impressive than rates seen in China and India, but Brazil nevertheless continues to be an investment hotspot. Brazil is one of the few countries in the world that are self-sufficient in oil, which plays a very crucial role in global economy. Brazil is also a leader in alternative energy sources; it produces more ethanol than the combined production of Asia and Europe. Brazil is also the second largest producer of iron ore in the world.

    With this abundance of natural resources, Brazilians are manufacturing everything from aircrafts to hair pins. The decades of hyper-inflation and unstable domestic currency seem to be over. There is a long list of positive points that make Brazil a promising candidate for spectacular growth.

    The key word here is “facts”. We are not talking about predictions from the same analysts who failed to see the turmoil faced by the world after mid-2008. Various key indicators confirm that economic activity and job creation have already undertaken a recovery process. While most of the world’s economies struggle to get out of the hole, Brazilian economy is again growing steadily.

    Some cases have become symbolic. Let’s take General Motors. While in the United States the car manufacturer is facing all kinds of problems, and selling part of their Europe assets, in Brazil a R$ 2 billion investment plan is in place to expand production. The Brazilian auto industry expects to sell 3 million units in 2009, a historic record in a years in which everyone expected the worst.

    A recessionary scenario seemed realistic for 6 months, with reduction of the GDP, absence of credit, lack of confidence, production interruption and slowing of sales. This reality is now only seen in the rearview mirror. Brazil is, in fact, experiencing the next phase: recovery.

    Employment is also entering a considerable recovery process, after predictions pictured a dark. 300,000 new jobs were created on the first 6 months of 2009, in the economy as a whole. In the end of last year 800,000 jobs were lost in the country, but in 2009 a positive balance of 600,000 is expected (an exception amongst the world’s 20 largest economies).

    It is interesting to note that a country that has always been hardly hit by the world’s economic turmoil, this time is keeping its head out of the water based mostly on internal demand. Consumers have not lost their appetite, even with reduction of credit,

    During the last few weeks, Exame conducted a research with 360 companies in Brazil, which gives us a vision on the current business and economic climate. Following are some noteworthy facts:
    • Most companies expect considerable growth in Brazil’s GDP in 2011 (57% expect 2% to 6% growth)
    • 49% say the effects of the crisis has diminished in their industry
    • Only 16% do not expect growth in their companies
    • 76% believe growth will be supported mostly or solely by the domestic market
    • 70% are maintaining investments planned before the crisis
    • Overall sales are higher than 1 year ago
    • Cement sales grew 17% since February
    • Vehicles, computers and household appliances are showing strong indications of growth
    • Consumer credit and real estate also show moderate recovery rates
    • General industrial production and credit for companies are showing a slower recovery rate.
    • 96% expect to keep current staffing or hire more people

    December 29, 2010 at 8:20 am |
  36. Argus

    From The Economist, Nov 2010

    During the run-up to the Iraq war Donald Rumsfeld, then America’s defence secretary, famously distinguished between “old” Europe and “new” Europe. In 2011 a growing number of businesspeople will distinguish between the “old” emerging markets and “new” emerging markets.

    The rich world will continue to suffer from anaemic growth for years to come. The emerging world, by contrast, will be a whirling hub of dynamism and creativity. Over the next decade it will account for more than 50% of global growth. It will see 700m people enter the middle class. And it will also account for a disproportionate share of business innovations.

    But in 2011 businesspeople will increasingly ask themselves: which emerging markets? The “old” ones, the group that Goldman Sachs dubbed the BRICs, are suffering from the law of diminishing returns.

    Three of them—Brazil, India and China—are rather like the most popular girls at the school prom: a little too full of themselves. India and Brazil can be haughty. China has taken to bullying and even swindling its suitors. The Chinese courts imprisoned four Rio Tinto executives for receiving bribes while taking no action against the Chinese officials who offered the bribes. The Chinese government engaged in a vicious fight with Google over the search giant’s attempt to prevent it from spying on its customers. As for Russia, it should never have been admitted to the foursome in the first place. The government is corrupt and capricious. The population is shrinking. The country’s wealth owes more to an accident of geology—those oil and gas deposits—than to creativity or innovation.

    So why not look elsewhere, to “new” emerging markets? These come in two varieties: “overlooked” countries that can rival the BRICs in terms of prosperity; and “frontier” countries that are only just beginning to emerge from their chrysalises.

    Companies that move first will enjoy lots of advantagesThe biggest concentration of overlooked markets is in Africa (which is in many ways an overlooked continent). Africa’s star performers are South Africa, Egypt, Algeria, Botswana, Libya, Mauritius, Morocco and Tunisia. Collectively these countries match the average GDP per head of the BRICs.

    But there are also huge overlooked emerging giants in every corner of the world. In the Middle East, Turkey and Saudi Arabia will attract a lot of attention. Turkey is one of the world’s most dynamic economies (and certainly more dynamic than its ancient sparring partner, Greece). Saudi Arabia has been liberalising its business environment rapidly, according to the World Bank’s annual “Doing Business” survey (see article). In Latin America people will take another look at Mexico for its successful companies and thriving middle class. But the biggest praise will be for Indonesia: it will be the emerging-market star of 2011, with analysts lauding its innovative companies, growing middle class and relative political stability.

    The frontier markets are poorer and riskier than the overlooked ones. They include Sri Lanka, Bangladesh and Pakistan in Asia, as well as Kenya, Nigeria and Rwanda in sub-Saharan Africa. You will hear a great deal about the unexpected merits of frontier economies in 2011. Nigeria, home to the tenth-largest oil reserves in the world, has stabilised its politics. The World Bank listed Rwanda as its champion pro-business reformer in 2010. Analysts will develop a special enthusiasm for Vietnam, which is well-placed to steal outsourcing jobs from China: it is adding 1m people a year to its workforce and has a literacy rate of more than 90%. Mobile-phone companies have already discovered Vietnam’s consumers: mobile-phone penetration has gone from one of the lowest in the emerging world to one of the highest. Other consumer companies will be hot on their heels.

    Never mind the volatility, feel the vitality

    These are hardly easy markets: there are good reasons why they are underexplored. Mexico is wracked by a drug war. Saudi Arabia is a closed society. Frontier markets are by their very nature unpredictable—prey to the wiles of dictators and the whims of nature. But they present numerous things that are irresistible to the West’s growth-starved companies. They offer huge opportunities for investment in infrastructure. General Electric wants to provide Africa with the machinery that it needs to grow: any young GE-er who wants a chance to rise to the top has to spend some time working in Africa. IBM wants to provide the computing power.

    Africa contains a disproportionate share of the world’s mineral wealth at a time when mineral prices are soaring. It also contains a disproportionate share of the world’s young people at a time when the West faces a demographic squeeze: by 2040 it will be home to one in five of them. Many local stockmarkets are booming: Egypt’s market produced annual returns of 39% between 2000 and 2008, in a period when the average return was 2%. True, this growth is volatile. But in 2011 an increasing number of companies, looking at the West’s flat markets, will decide that volatility is at least a sign of life.

    Above all, the overlooked and frontier markets offer businesses a chance to get in on the ground floor. Companies that move first will enjoy lots of advantages. They will be able to forge deals with aggressive young companies: companies such as Angola’s Banco Africano de Investimentos, which is expanding in Europe and Brazil, and Egypt’s Orascom Telecom, which is expanding across the Middle East and beyond. They will be able to strike infrastructure deals with local governments. And they can shape the tastes of future consumers.

    Companies that succeed in these neglected emerging markets are not only putting down roots in the world’s most fertile soil. They are giving themselves a chance to establish business habits for years to come.

    December 29, 2010 at 3:21 pm |
  37. Argus

    Past year, China exceeded the United States as the greater partner trader of Brazil, after ten years of uninterrupted increase of exchanges. Now, Beijing is working to become the greater investor in the greater South American country in the next ten years: to aim 2010, one previews that the Chinese investments will get closer to the 10 billions of dollars against 92 million 2009.

    December 29, 2010 at 4:39 pm |
  38. Ricardo freitas

    As all of the "journalism" practiced in USA, this article is infected by same old traditional "third world" prejudice that seems people and countries like slaves and sub-beings that serves only for provides the trash services.
    You are disgusting, more than the alienated US people, becausa you are PRESS!
    You and his anti-human acting and thoughs has provides the greatest tragedies and conflicts in the world (like creation of state-terrorism of Israel klling palestines and other people in the wolrd). The history proves that the international US interventions are more than perverse. Are tragic for the rest, and fundamental for his "growth".
    US is a shame. Not specifically your poor-minded peolpe, but the politicians and high-tec corruption, authoritarism and broadcast alienation.
    shame for you that creates hate in the world. US is the most hated country in the world.
    Black artists is forced by the media to appears like blond (see beyoncé and others freak top "celebrities")
    USHAME.
    The "third word" do not need more to hear your "opinions" fully of prejudice, partialism and second-third-fourth... intentions.
    SHAME cnn.

    December 30, 2010 at 3:44 pm |
  39. Francisco Arruda

    Hello,

    The World Need Union of the Peoples. No War, No Discrimination. The World is ONE.
    SAVE THE PLANET!!!
    SAVE AFRICA, SAVE HAITI, SAVE THE PEOPLES!!!
    BRIC`S PLEASE!HELP UNITED STATE AND EUROPE!!!

    December 31, 2010 at 7:44 pm |
  40. Dorien

    Americans (the unilinguists) and the Europeans (especially the Brits) are risk averse to the extreme with some positive exceptions. As a Brazilian, I don´t really care. We will just do whatever it takes ourselves. Just don´t piss and moan when the BICs (can´t speak for Russia) come over and start buying up your corporate assets and start repatriating profits the other way.

    December 31, 2010 at 8:29 pm |
  41. Christian Sadock Costa

    Despite some inner and cultural problems, what every country has, Brazil is booming . The Institutions are solid, and that´s why we are stronger than any ideology.

    January 1, 2011 at 5:22 pm |
  42. Patrick B. O'Keeffe

    Even though BRIC`s country have many oppurtunities, their organization such as political, legislative and other public sectors, disencourage entrepreneur to invest in these countries; because they fear that the worst might happen, such as the government loosing control and stealing their money; but being a Brazilian and seeing what has happen in the last 20 years the Brazilian government is stable and seems that the same line of thought will be followed with the new elected president Dilma. Because even though Lula and Dilma are from the workers party, they have followed the same line of thought in regards to the economy, as the PSDB party under FHC (Fernando Henrique Cardoso) did before Lula rose to power in 2002.
    T

    January 3, 2011 at 2:22 pm |
  43. Apiano Morais

    The question is, developing countries do not need the European market. Indeed, countries that do not even have the raw material and energy efficiency will decline in decades. Hand labor is cheaper in developing countries and the aging European population leads to a rapid increase in Social Security problems. Obviously, China, India and Brazil have severe social problems that must be resolved in coming years. But while unemployment in European countries and Americans are rising to more than 8.3%, in Brazil the rate decreases of 8.1%. The Asian consumer markets (zone of influence of China) and South American (zone of influence of Brazil) are enormous. What they lack in China is a solid democracy and Brazil. And what's missing in Brazil is the technological potential Chinese. When these countries talk, no need of European investment. In fact, those who do not want to lose money, you have to realize as soon as possible that the old do not produce consumer goods.

    January 4, 2011 at 8:28 am |
  44. Peter

    As an American living in Brazil I find it quite humorous to read here about the great advances this country is making. Big deal the middle class has grown to more than fifty percent. Brazil"s public school system is horrible, their system of impostos(taxes) on everything from cars to sugar and rice is killing the average family here and Brazil under the great leadership of Lula is in the process of joining with several other Latin American countries (most notably Cuba and Venuzuela) to create what amounts to a giant censorship board to limit freedom of the press. Like China, the truth scares the daylights out of them. Their highways are in varying states of disrepair, raw effluent streams into many of their waterways and the infrastructure of their major cities are crumbling. It's no surprise to me that many investors are wary of sinking their money into a country with so many question marks. Brazil's economy is tied inexorably to China. Sixty percent of China's economy is linked to the housing market and we all know what happens to an economy when the bubble bursts. The povo (common people) of this country are magnificent and deserve all the best but their minimum salary is still less than $400 a month. No wonder people have to put iron wrought bars on the windows of their homes. Whole neighborhoods are controlled by drug lords, politicians are notoriously corrupt. Doesn't exactly make for the stable conditions most investors are looking for. When you lose your freedom of the press and your internet access is severly restricted I'm sure CNN coverage will look a lot better to you. Oh, by the way, as for being sunny all the time, we haven't had five sunny days here in Juiz de Fora in the past three months which has probably contributed to my ill humor.

    January 5, 2011 at 3:53 am |
  45. Argus

    Peter, if things are so bad, why are you still living in Brazil? You are contributing to a negative propaganda, an probably because you are uncapable to see the big picture. Every country has its problems but, sure, each and every one has a great deal of potential to offer; Brazil and U.S. included. It is easy to make a bad judgement by talking about corruption, bad roads, safety and bla', bla', bla'... Big deal you live in Juiz de Fora and hasn't had five sunny days, pal. I lived in Seattle for 10 years and, not because of this, I went to post negative things about the U.S. I am Brazilian-American, living in Europe now, and I see that not only China is cutting great deasl with Brazil. So, please, do a favor to yourself and read a little more about what is going on in the world and check the predictions of experts... You are the one in a buble that will burst soon or later.

    January 5, 2011 at 7:10 am |
  46. deepwater805

    Question: "Why are investors leery of putting their money in either Russia or China"?
    Answer: They lie, cheat, and steal. In other words: the cost of corruption seriously erodes the return on investment, and it's makes more economic sense to invest where the growth maybe less, but the return on investment is determined by legitimate market forces, not the size of the bribe you had to pay to get the contract.

    January 5, 2011 at 9:01 am |
  47. Marco Teixeira

    It's a joke? A really boring strategy of manipulation of information just to build a reality... Are the "blue eyes" mans so desperate like it's showing?
    Where are the entrepreneurs spending they money so, in the broked Greek economy? I can say something about the Brazil, that is the most significant democracy a economy country in the South America. The Social development of this country is a Significant sample of what is coming to the future.

    But say that invest here is spend money out is be Completely disqualified and without credibility.

    January 5, 2011 at 12:18 pm |
  48. Peter

    Argus, If Brazil is such a great country why are you living in Europe? And why do hundreds of thousands of your countrymen choose to live in the U.S. illigally for years without seeing their children, brothers, fathers and mothersrather than return to Brazil? Brazil is a great country but it can become even better when bribery and corruptin is no longer simply accepted as inevitable and freedom of the press and internet are respected by all. Wake up, return to your country and fight for change that can bring your country into the first world. Give all the children of Brazil a chance to excel, not just the children of the upper middle class. We can all make this world a better place by acknowledging each country's shortcoming and working together to correct them. Your paranoia about evil First World conspiracies are misfounded.

    January 5, 2011 at 1:00 pm |
  49. Bruno Scaldaferri

    I live in Brazil, and to be honest I agreed with both Argus and Peter said before. It`s hard to analyse and measure how good a country is, because economy is such a hard subject. I`ve live in both America and Brazil, and the only thing I can say is that both countries must learn with each other, no countries is perfect.
    But if I would tell the reaseon ppl still dont invest in countries like Brazil, I`d say its because of "Fear", Fear of changing, fear of facing new rules, new strategies. Everybody like the confort of what they are used to. Changes are always hard.
    But when investor start seeing that the Fearless ppl are doing well they ll start following them.

    January 5, 2011 at 1:54 pm |
  50. Jamie Harstch

    These countries are not engaged on Imperialistic wars and/or interventionist behavior! They're not bullies as the U.S.
    And they are respected everywhere.
    That's why they are so successful !

    January 5, 2011 at 4:09 pm |
  51. Argus

    I tell you Peter that you forget that many of the problems in Brazil are a sympton from the end of dictatorship in the mid 80's.. The democracy is being gradually adjusted in the last two decades, and it is not far beyond from what the old democracy is in the U.S. today. Things are gradually improving. Nevertheless, the U.S. is not free from corruption, bribes and all kinds of negative things that exist, even though America has a long history in Democracy. I am not here to get down or list the problems that exist in America and not to judge Americans, as you forget I am American too. So, do not try to compare and to get down in Brazil either because of existing problems that people are trying to solve. Wake up and understand that bad politicians you have in America and in Brazil and in every corner in the wold. By the way, I am in and out of Brazil, as I am in and out of the U.S. as I am in and out of Europe and I contribute to both countries. Just be more flexible and try to see the posetive things you have and try to contribute to the Brazilian image instead of damaging it. Neither Brazilians, nor Americans or every citizen in this world likes to hear a foreigner, who lives in his/her country, saying bad things about his/her nation. Take it easy and keep your mouth shut if you don't agree with things and don't try to fell superior if you have things in America you don't have in Brazil. I am sure, people in Brazil treat you really well, so don't start talking badly when WE are trying to do OUR best to solve the problems. Be a little more diplomatic and greatful to any place you live, and do pay your respect to this people's efforts!

    January 6, 2011 at 12:59 am |
  52. Lall

    Well, this report is partly misleading to be honest.
    95% of western entrepreneurs dont seek a global market or are mature enough to exploit the differences in production/consumption cycles that exist between the developing world and the developed world.
    However the other 5% usually run far bigger and diverse entreprises than compared to the other 95%. We may not explain this further, for most of us knows that most huge businesses are multinationals where as small ones are not.
    So although the ratio of entreprises be 5:95, the ratio of business itself is way way higher.

    January 6, 2011 at 3:10 pm |
  53. Patrick B. O'Keeffe

    I tend to agree with Bruno people are simple afraid in investing in these countries because they have a their own thoughts that the country trustworthy, even though i don't think it's complete ready to being a first world country or close to that, i think it's trustworthy enough to have more external investements.

    But I do disagree with peter and his vision of brazil, brazil is not a first world country and far from that, but its situation is way better and it has been growing in many aspects, one of the problems that the next governments are going to face is the field of infrastructure, especially especilly, and further in the area of railways...

    January 6, 2011 at 6:19 pm |
  54. Felipe

    The BRIC has a great potential for growth, noting that in 2009 the world experienced an economic crisis, to which the BRIC countries, especially Brazil, were the first to come out of the crisis. U.S. and UK are suffering today with the crisis of 2009.

    January 6, 2011 at 7:46 pm |
  55. Sarah

    I am an American entrepreneur and have been living in Brazil for more than five years. I understand the American and European companies being hesitant to invest here. It took me all of two hours to open a company in the US, open bank accounts and receive credit card offers...In Brazil, it took over two months and a bribe to open the company, another 6 months to get an import license, and don't even get me started on a bank loan (trust me, if you need bankers money in Brazil to start a business you'll go broke before you sell your first product).

    Honestly, the opportunities can make your headspin since in terms of consumer products there is no variety and Brazilians have a ravenous appetite for all things foreign and seemingly chic. I have been told that most of the world records for cnsumption of Mcdonald's and Coca Cola have been set here. The wealthy upper class love their Outback Steakhouses, Applebee's, and Frozen Yogurt chains, but try and find a decent goat cheese in the supermarket, or brown sugar that you don't have to sift to get the rocks out, or black bean burger and you can forget about it!

    Living here and running a business here can best be described as torturous. Government employees are all took quick to shuffle you off to some other agency and no one wants to take responsibility for the job they should be doing. The solution that they created to combat long wait lines was to install dozens of rows of chairs to make the wait more comfortable (instead of making the bank/gov agency more efficient and the wait time shorter). Often the people that you need to speak to get problems resolved are functionally illiterate and quite clueless about what they are actually supposed to be doing, but you can't get mad since they are "pobre coitados"

    Brazilians are a very proud people and often take these comments personally. They hate to admit their faulty system of planning and many of their "successful" multinational companies would fail if they stopped sucking the "mothers milk" that the government provides. They are also an insanely jealous population, coveting the accomplishments of their peers and of people they have never even met. They have an insane inferiority complex in regards to the US and Europe and are relishing in the economic difficulties that these countries are dealing with at the moment. However, I ask you Brazilians, when is the last time you had a problem here in Brazil that was easily resolved?? How many times have you watched the news and seen the atrocities that are being committed right outside your front door? When was the last time you called the police and they actually came? How many of you have received phone calls from convicts in prison saying that they have kidnapped your child?? I don't have kids and they've called me twice!

    With all of the difficulties that the US, Europe, and Japan are going through right now, you cannot compare the quality of life and respect for its citizens that Brazil is still 100's of years away from achieving. I mean, you all don't even have decent highways to travel on to transport people or goods, not even enough truck drivers to deliver merchandise arriving in the ports.

    So, why would an American put up with all of this? Where there are problems there are opportunites for business and trust me, the companies here with their HORRIBLE customer service really don't provide much competition (i.e. NET, SKY, OI, CLARO, etc...you get my point).

    January 7, 2011 at 1:21 pm |
  56. Helio

    Unfortunately corruption is rampant in Brazil, totally out of control. The government tries to hide this, because it´s the main source of corruption. It´s very very hard to operate a business without paying bribes everyday.

    January 8, 2011 at 7:58 pm |
  57. World-Citizen

    The biggest difference between US and Brazil, from the historical point of view, is that Brazil was colonized by Portugal while US by UK! See you, the money never went the priority in the brazilian culture, but the most important aspects are: (i) environment; (ii) open mind; (ii) total freedom. In any case, I believe that is not possible to compare the different nations, each one has a singular characteristic about waht is the life quality and the growing economy.

    January 9, 2011 at 2:31 pm |
  58. Patrick B. O'Keeffe

    Sarah,

    I tend agree with you in certain aspects but disgaree with you in others; Yes Brazil is loaded with problems, and many time the solutions that are found are not the best. that is why its a land of opportunity for better services that first world countries posses

    January 10, 2011 at 2:38 pm |
  59. lobo da estepe

    If you want to know the quallity of an article...just know the readers...Iam done with this article!

    January 11, 2011 at 5:29 pm |
  60. Adriano

    Not taking some correct justices from your comments in general, but some truth must be said. Brazil is far more serious in treating the differences between the lower class e the upper. Although the difference is still huge , a lot of improvement has been made in the past years and still continuing on the way to eradicate the poverty .

    January 11, 2011 at 5:29 pm |
  61. Djhenenson

    Enough to be funny ... the survey data given here ... everyone knows that Europe is in bad shape ... Greece ... Portugal ... Spain in the future ... In united state a has undergone a real turmoil ... began to recover now... Brazil one of the few countries hardly felt the crisis of 2009 ... China grows to unbelievable numbers ... India and Russia are well thank you ... and this research is that contrary to the whole world ... Investing in the UK is best ?kkkkk kkkkk
    joke !!!!!

    January 12, 2011 at 1:13 am |
  62. Rafael Tenorio de Albuquerque

    Without the strength to solve their problems in the short term, the old economy calls for a lie. I believe that the growth of emerging countries is one way road and the old continent doubt it will be its future clouded.

    January 12, 2011 at 5:47 pm |
  63. Ney

    Long live Brazil!

    January 12, 2011 at 6:46 pm |
  64. Edu

    Sarah,
    Are you still spending your time in a bank /gov agency waiting line...after five years running a business in Brazil!

    January 13, 2011 at 3:18 am |
  65. Heitor

    I stoped watching it when I heard "Delloit".

    Brazilian growth is directly related to the fact that about 30 million people migrated from the low class to the medium class, lately. It caused a really positive impact in economy, when considered that theese people are now consuming stuff they couldnt afford before. Now, the medium class is the largest one.

    The expectation is to increase even more this development process cuz government can provide conditions to this low to medium class migration keep happening, thru income distribution policies, which in my opinion is the biggest Brazilian social problem.

    So, Im forced to say that those who can invest in Brazil, specially in basic services and products, and dont do so are missing a good bussines oportunity.

    Peace!

    January 14, 2011 at 12:29 am |
  66. joseph neicaisef

    The Deloitte is not a serious company. This company was involved with accounting fraud.
    Tony Cohen, do you have already travel to the BRIC?

    January 15, 2011 at 5:12 pm |
  67. Patrick Liang

    I have lived all my life in Brazil, China and USA. After 14 years living abroad I have returned to Brazil. I have good and bad things to say:

    Corruption and Violence seem better, but still a long way to go. Sao Paulo, the catalyst of the Brazilian economy, hasn't developed at the same pace China has in the past 10 years. You don't see the same magnificent buildings that are built in Shanghai, Dubai etc...

    However, you do feel an enourmous increase of traffic, greatly caused by the number of vehicles on the streets.

    You go Starbucks or Mcdonalds, and you will have to wait in the long lines. Mind me say, they are not cheap. An average meal at Mcdonalds in Brazil cost from $9-11 USD, which in my opinion is ridiculous. But it does not stop people from consuming these goods.

    Mind me say that both the World Cup and Olympics are both going to happen in Brazil, and to overlook and underestimate the growth and potential that this country has is just naive.

    Yes, Brazil has many negative aspects that is a result of its tainted past. Whilst corruption, violence, poor highways and lack of social organization is something to overcome, one should not look only at the flaws, but at the potential. It is there and it is already showing. If you don't see it, you are missing. Do the judgement on your own and do not rely only on biased piece of news. You will soon realize that Brazil is a great place to invest at the present moment because it is an expanding economy. The growth potential is exponential. Those who are able to see that will have lots to talk in the next few years to come.

    Those who would like to discuss more about this, please leave me a message: patrick@chinatradeinvest.com

    January 15, 2011 at 10:08 pm |
  68. Jack Cell

    Yes ....

    US – General Motors, Chrysler . How many dealers closed?
    Enron – Senate scandals – huge spending on wars – The huge bail-outs for some big companies to promote big parties ( it was a bussines meeting ) – Regulated Internet??!!

    UK – Land Rover – Jaguar – Vauxhall – political scandals, banks going down and the people adoring the Royal Family ??!!

    EU – Portugal – Spain – Greece – Ireland -(who's going down first?)

    Open your eyes, when the paradigm changes everybody goes back to square one!

    January 15, 2011 at 11:02 pm |
  69. Mauro

    Ok, In US there is no corruption or bribes. Not even in England!!
    A superpower country start some wars "in the name of freedom" around the world, kill thousands of people and make their company leaverage the profit decision of the colonized country. You developed nations (mainly US and UK) are the best example of humanity and humble in this world!
    Some day you are going to paid in cash for the innocent human casualties you made! Okay?? I'm not talkin about religion, or other stupid stuff, I'm just talking about money!!! How many lives you kill in Iraq, for example? You have to pay the families stupid murderers!
    To hear about bribes and corruption from americans and britains it's very funny!!

    January 18, 2011 at 2:12 am |
  70. Gunter Sarfert

    Seriously.... Deloitte people are just... incompetent.

    http://www.istoedinheiro.com.br/noticias/41059_POR+QUE+A+DELOITTE+ERRA+TANTO
    The language is portuguese
    You can use google translatiom to understand :)

    January 18, 2011 at 9:02 am |
  71. Gilda

    Unfortunately the economic axe ( Western Europe) and USA don't have interest in knowing about other cultures therefore BRICs become an unknown world to them. I am brazilian and when I travel abroad I see many people think Brazilians speak Spanish and not Portuguese! If you don't know the basic things about a country so of course you cannot know the its market and economic situation. I can observe that this problem is changing because BRICs are receiving lots of investiments and conquering a solid position in the world scenary. Most investors come from the USA and Europe are satisfying with ther results and will invest more and more. The presidents of Ford and GM said brazil became the main market to sell and produce their cars. One thing is what we think about a country and another one is what this country really is. We made changes in our economy a lot but the image doesnt follow in the same way. What a shame!

    January 18, 2011 at 3:00 pm |
  72. Steve

    Ok Gilda tell me what language do they speak in India

    January 21, 2011 at 8:42 am |
  73. Cindy

    I see a lot of proud people in here, but the question is if the entrepreneur is prepared to face new markets, according to the aspects of each culture. Every country has its issues and all invests must be well studied. It's not a question of wich country is the best in the world, this is so childish, it's obvious that the Brics has a lot of problems, but 'is my business going to perform in this determined country, with its particularities"? It's all about market studies, with or without bribes.

    January 22, 2011 at 12:18 am |
  74. @marlongustavocc

    The BRIC will dominate the world led by Brazil! :D

    January 22, 2011 at 12:22 am |
  75. Gringo

    I live in Brazil, in a gated community – outside is a city, that is ugly, filthy and stinks. I live here because I have no other choice at this time (family matters), but if I could move back to my beloved New Zealand I would in a second.

    The people are ok, but as Sarah mentioned before, many seem to have a huge chip on their shoulders "insane inferiority complex in regards to the US and Europe", yet all enjoy the luxuries and innovation that the 1st world brings.

    If I was looking to invest I wouldn't touch Brazil with a 10 meter pole, the bureaucracy here is unbelievable, completely incompetent, unreliable and utterly useless. I don't know much about the other BRIC countries, but I know enough about Brazil to advise any entrepreneur to steer well clear.

    January 25, 2011 at 5:07 pm |
  76. Rodrigo

    Brazil is just a teenager and it's trying to do business like older countries. We have a lot of things to learn about international markets. But I know we're in the right way to be more than we are.

    January 26, 2011 at 12:55 am |
  77. Robinson

    BRIC starting to bother the supposed 'super' countries in the economy – Brazil go a head!

    January 31, 2011 at 2:43 pm |
  78. Joana

    As an American-Brazilian who has lived in Brazil, US, and now in Europe, I find it hilarious how some Brazilian people here assess the country. I don't know how can some of you claim that Brazil is so great. It has tremendous problems and it is a developing country- we are not there yet. Stop with stupid patriotism and inferiority complex and fight for a better education and system. Brazil has everything to be booming and doing much better than it is but the reality is that people have to grow up and realize that an accurate assessment of Brazil is needed for the country to improve. Not this fake and false patriotism.

    I also suggest for Americans and Brits to do the same – while you are more innovative, better educated, you should open your mind to different people and markets. Yes, things will not work the same way in developing countries, but there is plenty of potential – lots of money to be made. Risk can be ok.

    Having said all of that I think we need to recognize our similarities and differences for what they are. It is frustrating as heck, but very worth it. To assume we are and should work all alike is very naive. Take each market and place for what it is and enjoy it.

    Namaste

    January 31, 2011 at 7:13 pm |
  79. Renato

    Qusetion should be made on what the size and expirience in terms of expansion of these entrepenuers are. They affiirm that language is a barrier for a possible expansion to the BRICs. Well I don't know about you but I thinh it's a very poor excuse. They'd better recognize that they do not have the strengh to expand to such markets instead of put the blame on them. I am also very sure that the same survey in any other country would have shown the same low interest toward the UK itself.

    February 1, 2011 at 1:08 pm |
  80. Steven R

    Well I lost all the faith in the investment when the same bad administrators and economist that started the crisis of the 2009 are still running compoanies and even banks. So they were stupid enough to create a total disaster now I don´t trust them at all. Those enterpreneurs will find out soon that they bussiness will have a tiny growth or even will be broke in the next 3 years just because they can´t see further then they noses.

    February 3, 2011 at 6:47 pm |
  81. globe view

    i would stay away from brazil. overrated, more expensive then usa and most of europe to make business, fake inflation reported by local goverment and extremely expensive to live. theres a monopoly culture in the roots of the brasilian society wich develop a very complex burocatic system to eliminate new commers. stay away from brazil if you love your money.... brazil is just womans, football and beer... lets keep it that way ;)

    February 6, 2011 at 4:10 pm |
  82. Marcão

    Commenting on the post Sarah, comment above, I am Brazilian and sincere a person things she talks about her comentantário true. But when I was in the U.S. I noticed many similar things, bribe the police, an ignorant people living in the fringes of big cities. I think Sarah must be a bad woman loved and with strong and emotional trauma that did not attract even a glance of the beautiful Brazilian men and women. I suggest you consult a psychiatrist.

    February 7, 2011 at 1:14 pm |
  83. Jonh

    My God, but that unfortunate matter of CNN, I live in Brazil and the market is very hot, which refers to Deloitte here in Brazil it does not have a good reputation, is involved in make-up and is seen as a corrupt firm

    February 7, 2011 at 1:24 pm |
  84. Lukinha

    Why Deloitte misses both
    The company's audit PanAmericano let out a hole of $ 2.5 billion. And it was just one of several errors in your company Claudio Gradilone

    The retired economist Enrique Garcia took a payroll loan, secured by his retirement, Banco Panamericano, which has already been paid. Just over a year later, the small business owner Fabio Casagrande financed the purchase of your Ford Ka with the help of the bank.

    They do not know, but have one thing in common: Garcia payments were used to pay off the debts of Casagrande. The loans were packaged into PanAmericano large portfolios, subsequently sold repeatedly to different banks. The money for new loans pay interest on old ones.

    February 7, 2011 at 1:31 pm |
  85. Jenuffer (UK)

    I live in Brazil is a country that has a lot to improve but it is a great country, the people wonderfully. Vivaaaaaaa Brazil, I love you

    February 7, 2011 at 1:41 pm |
  86. Ricardo Brasilzao

    emeregentes economies are troubling, we will grow more this is it. This is the future. Brazil forever

    February 7, 2011 at 1:43 pm |
  87. Marilda

    foreigners who speak poor whites in Brazil are probably ugly and bitter and not call the attention of the Brazilian people beautiful by nature, go back to your world of white people, depressed and suicidal and be happy. in truth you are emotionally failed. But well-meaning foreigners are welcome to the land of sun and sea and market booming

    February 7, 2011 at 1:49 pm |
  88. Cegoline Royalee

    Sarah you should be a woman with great lack of affection, you said not to have children and certainly never will because there will not be a good man who will want to stay married to you. Now go back to your wonderful parents and stay there, maybe a white American, boring and bad breath still wants it.

    February 7, 2011 at 7:48 pm |
  89. Alvaro Sedlacek

    Although raised in business by Americans, I am a Brazilian national, currently living in Sao Paulo. Cannot say much about India or Russia and there is not much to be said about China, as the real reason they grow is because their currency value is strictly controlled by their government (artificially, of course) and, believe it or not, because polution is allowed. In China, cheap and/or enough energy comes at any cost. Interestingly, the same companies that advertise themselves as "green" in the US or Europe, have moved their manufactuing facilities to China for a very good reason: they have all labor force they can handle with no Unions or employee defense mechanisms and, in special, all the energy they can waste, without the need to be "concious" about how it is generated. It is a good deal.
    One of the points that is hardly explored by Delloite and other so-called "consulting" firms is that even if all US or UK multinational companies wanted to suddenly bring their manufacturing activities back to their countries of origin, there would not be energy enough in such sites to accomodate those industries. Decades of disregard to the infrastructure are likely to cause this and, giving the appeal of "going greener" that was recently emcompassed by local politicians, any changes on this scenario is highly unlikely. Spread the polution in China and sell your products where people cannot immediately feel the effects of such polution or simply do not care about, seems to be their real corporate mottos.
    Now that the crisis forced a reduction in energy consumption in such countries, such companies believe they have some energy reserve for retain some of their future "investments" in their home countries and appear to the general public as a company that "values" their origins... Sad but true.

    As far as Brazil is concerned, and I know a lot about it, there are plenty of reasons for wise businessmen not to start-up operations locally. Brazil is an expensive country these days because of this crazy Real convertion rate, the amount of old-fashioned labor laws and labor court decisions that make an employer spend three times their nominal payroll in "social" taxes, litigation fees and court-ordered "indemnifications" (believe it or not, pain & suffering being one of the top reasons for such jurisprudence). Brazilian government spends far more than they collect in all sort of taxes, even though Brazil has THE higher (effective, not nominal) tax rates in the world and most of its taxes are apllied in cascade. Brazilian spenditures are not wise. Almost 90% of it go to pay personnel and not investment in infrastructure. Recurring and poor expenses, as public services in Brazil are in line with the ones found in Central America countries like Haiti. The Brazilian public and private education system is a joke. There are more "slot-machines" universities per block in any given city than drugstores and, with very few exceptions – that only confirm the rule – nobody gets a bachellor degree understanding the minimum required for a technical job. The crime rate (violence) is among the top ten in the world, African and Middle East conflituous countries included – almost every upper middle-class citizen in Rio de Janeiro, Sao Paulo and other capital cities drive armored cars. Corruption soars and there seems to be less and less intention to fight it. Banks make more money on "service fees" than anywhere in the world, and such fees mainly come from very "complex" services like maintaining a checking account live. And this has been a lesson well taken by some famous international banks such as HSBC, Citibank, Santander, etc. No wonder Brazilian operations account for their main source of income in the world (noticeably in the cases of Santander and Citibank). But this is just a temporary problem, as such banks will find their way through international regulations to repeat the same scheme in other jurisdictions where they operate. Wait and see.
    Corruption in Brazil is no different from many other excessively regulated countries. Like people here say: "creating barriers to sell the gates".
    But the most important and negative issue about Brazil is the abolute disrespect for Civil Rights. Not even during the military dictatorship the scenario was worse. Police can stop and strip search you (with a military-grade gun pointed to your head) anytime they like – no need for probable cause or anything similar. Anyone can sue you for whatever the reason, including – and this is a very big AND – the government, based on nothing but allegations. If they lose, it will cost them nothing – especially for the government and even though you are proved innocent, you still have to bear the legal costs on your own. Prosecutors working for the government sue, believe me, attorneys-at-law, companies representatives (not Directors, anyone) for unpaid taxes and judges will accept it, even though expressly prohibited by the law, simply because they do not have time or do not want to read the prosecutors filings. And the "accused", once again, have to bear all legal costs – and it is not cheap.
    As a lawyer working for the decease Arthur Andersen, many times I was granted powers-of-attorney to represent foreign partners in the constitution of local entrerprises (as required by Brazilian legislation). It cease some 15 years ago and yet, every time I try to sell a property of my own, I discover a new "tax" or "labor" lawsuit filed against me simply because of such representation action. I win most of the times (sometimes judges simply ignore the law), but I still have to pay the legal fees and there is nobody else to sue for prosecutorial misconduct, as the Brazilian legislation simply does not recognize this or the courts decide to ignore it.
    I will stop here because I am running out of time and probably the pacience of any eventual reader. Brazil has plenty of joyful, caring and hardworking people and natural resources. Probably not enough though for me to recommend anyone to seriously invest in the country, unless they rest sure the payback comes pretty soon.

    I am sorry for disappointing my fellow Brazilian citizens or residents that left their positive comments earlier, but business is not about what we expect it to be one day – it is about the crude reality we face today.

    February 8, 2011 at 12:35 pm |
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