Dynamic Export

Having returned from Sao Paulo and Rio de Janeiro as a leader of our first BRIC+ Study Tour Brazil—the first ever Australian financial services delegation ever to visit the country—I ask myself: “Why it is taking so long for Australia to engage with a market which has as many reasons as we do to call itself ‘lucky’ and a glittering future of opportunity, excitement and potential?”

With our common interest in China as the world’s largest consumer of our resources, commodities and agriculture, it is puzzling to find that the trading and cultural links between Australia and Brazil are virtually non-existent. In one meeting with oil and gas company Petrobras, Australia didn’t even appear on their world map of international trading partners! There appears to be no serious engagement at a business, trade, investment or even political level.

Here are five reasons to place Brazil high on your list of priorities for investment, business expansion and exports in the coming years:

1. Demographics

With a large population of 198 million, and an average age of only 28, Brazil’s demographics are compelling compared to almost any other emerging market, other than India’s average age of 25. This is a young, energetic country with a bright and exciting future.

2. Agriculture and Resources

Brazil is a vast country, richly endowed with rainforests, arable land, minerals, commodities, oil and gas, plus plentiful supplies of water. However, while Brazil is already the world’s largest exporter of many things, including cattle, sugar, coffee, orange juice, and poultry, more than 300m hectares of Brazil’s arable land is yet to be cultivated. A similar story applies to its resources: the potential is enormous!

3. Domestic Consumption

Brazil’s exports are strong and diversified, but domestic demand that has been driving Brazil’s GDP growth since 2006. This enabled Brazil to quickly recover from global downturn. Incomes have risen rapidly, more than 30 million people have joined the middle classes in the last five years, and now retail sales are growing by over 10 percent per annum.

4. Renewable Energy

Brazil is predominantly powered by water-generated energy, with 83 percent of the country’s total energy generated from renewable sources. Brazil is virtually self-sufficient when it comes to generating its own power.

5. An Exciting Future

With the FIFA World Cup in 2014 and the Olympics to be hosted by Rio in 2016, Brazil will be in the global spotlight in the coming years, and you can expect to read and hear a lot more about Brazil in the media. But it’s in the hundreds of billions of REAL that will be spent on infrastructure, new sports facilities, hotels, homes, roads, airports and buildings, not to mention the vast consumption of products, services and expertise that will accompany these upgrades, that should be on the minds of every Australian investor, entrepreneur and business with an eye on the future.

It’s easy to underestimate Brazil from the images of soccer, sunny beaches and Carnaval in magazines, newspapers and on the TV. But this would be a mistake. It’s a serious and well-run country, with stable and improving economic fundamentals and, in the next 20 years, it will become one of the largest five economies in the world. Shouldn’t you be taking a flight across the Pacific Ocean to have a look?

—David Thomas is the CEO of Think Global Consulting

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