Brazil is the largest South American country both in population (around 176 million out of 350 million in the whole continent) and in economic significance (worth nearly US$1 trillion, its economy comprises 45% of Latin America’s GDP). Moreover, it also boasts more Internet users and the highest e-commerce revenue of any country in Latin America. It is the largest technology market in the region and its Internet-business potential continues to increase.
Brazil has finally been adopting more consistent measures towards sustainable growth, after many boom and bust cycles. Since the devaluation of the Real in 1999, Brazil's former government adopted a more serious fiscal responsibility and embraced trade liberalization, which curbed inflation to more acceptable levels (at around 7% annually) and placed the country firmly on track for long-term growth. According to ABDIB, a national industry association, 1,300 infrastructure projects worth US$215 billion will have been carried out between 2000 and 2005 in Brazil.
Foreign investments in Brazil are primarily made by the United States, which account for about 25% of the total. Brazil has been a leading destination for foreign investment, attracting US$31 billion during 2000. In 2002, foreign direct investment into Brazil did not keep with the vertiginous pace of recent years (about $25 billion a year), but still peaked at US$16 billion, which places Brazil in second place only to China among developing countries. Net revenues from franchises in Brazil reached US$8 billion in 2001.
The Brazilian demand for IT products is shared across most sectors of industry, but most particularly by companies in the areas of banking and finance, business integration, e-commerce, telecommunications, oil and gas, and internet management and security. The figures on software importation have been steadily growing and are expected to reach US$6 billion by 2005.
hesitant investors, the apprehensions created by the deep recession crisis
in next-door neighbour Argentina were compounded by the suspicion and
fear inspired by the newly empowered left-wing government in Brazil. Some
of these apprehensions have already been placated by the stability
of Brazil's banking system and exchange rate system in the aftermath
of the Argentinian crisis. The Brazilian exchange rate system differs
from the one adopted in Argentina, and Brazil has proved more resilient
to international shocks and currency crises than many other emerging markets.
The knowledge that the present Brazilian government has made pledges with
IMF to adopt more moderate debt repayment policies will further allay
investors's fears. Debt restructuring is not advocated any more nor is
there any opposition to trade negotiations, which augurs well for most
investors interested in the potential of this huge market.