Brazil 31/01/11

Continuing floods leave Brazil’s economic sector unhindered, as 2010 ends with historic growth and foreign investments pour in to escape Europe’s crisis-stricken markets.

With the first month of the New Year drawing to a close, the floods which have swept Brazil continue to take their toll on the population, causing more victims and further displacements.

In reaction, many countries expressed solidarity this week, amongst them China and the United States, sending financial aid (US$100,000) through the Chinese embassy and USAID, respectively, to help those affected by the mudslides in the states of Rio de Janeiro and São Paulo.

Further support has been signalled by President Dilma Rousseff, who paid a visit to Rio de Janeiro this Thursday to head a ceremony in which 2,000 houses were promised to the now 25,000 people displaced in the state’s mountainous region.

Contrary to popular expectations,the natural disasters have had little impact on the financial sector, which endured the damage in large part due to its healthy state at the close of 2010.

Several reports this week pay testament to this, as last year’s statistics were finally published, highlighting the positive balance of 2010. When former President Luiz Inácio da Silva handed the reins of the nation to Dilma Rousseff, the government’s chests had fattened with record revenues (US$805,7bi), a 9,85% growth since 2009; the year closed with an historical unemployment low in Brazil’s major metropolitan areas (5,3% in its Q4, with an overall yearly rate of 6,7%); 2,5 million jobs were created, beating the 2007 record of 1,6 million, and the average wage had reached R$1.490,61, the highest since 2003.

As 2011 unfolds for Brazil, continued positive economic development remains a general expectation according to a recent study by IE Business School and Kreab & Gavin Anderson, which covered current investments in Latin-America by Spanish companies.

The study revealed that 96% of businessmen with major interests in the region predict that the country’s condition in 2011 will be ‘good or very good’.

Furthermore, three out of every four Spanish companies look to extend their investments in the Brazilian market, as Latin-America remains an encouraging quarantine zone for western capital under threat by the global crisis.

The US has certainly taken notice, looking southward for a potential trade partner.

Secretary of State Hillary Clinton flew to Brazil for President Dilma Rousseff’s inauguration, the first top government official to be present at a Brazilian inauguration.

Furthermore, President Barack Obama announced this Tuesday, in his State of the Union Address, that he will be visiting the country, as well as Chile and  El Salvador in March. The purpose of his visit to Latin-America – the first since he took office in early 2009 – being to ‘forge new alliances across the Americas’.