Doing Business in Brazil – Part 1

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Doing Business in Brazil – Part 1: Preconceptions of Brazil

 

I was recently reviewing some of my coursework for my MBA program, and unearthed a narrative that I had penned during my international trip to Brazil. It was for the course “Doing Business in Emerging Markets” I had the chose to study Brazil. I wrote this in March of 2013 before the Confederations Cup riots, before the 2013 mass protests and well before the World Cup.

 

The following journal entry was written before embarking on my weeklong journey, and includes some preconceptions, that may or not be accurate. This is part one of a five part series.

 

Journal Entry #1: Pre-trip journal entry. 1 March 2013 Michael Munevar

When given the option to choose an emerging market to study, the choice for me was clear. I would choose Brazil. Not only is Brazil celebrated for its flourishing economy, and strong culture, but it’s also recognized for its people and regional and global influence. For me, there wasn’t any hesitation in choosing this destination, its a neighbor of my father’s native land, Colombia, and has a distinctive Latin American flavor that has to be experienced in order to be cherished.

To say that I have been looking forward to this trip would be a gross understatement. During my studies, my travels have taken me to travel to France, Canada and Brazil, all being experiences that are very much diverse and provide a plethora of learning opportunities. As my understanding of emerging markets is limited, I look forward to gaining a better understanding of the mechanics that are needed to build and sustain such an economic boom.

I expect to maximize the application of my knowledge that I have gained from my MBA program. Many of the tools that I have learned in my MBA program, from negotiations to cost accounting, and ethics to supply chain management can be applied to the Brazilian market.

I anticipate being able to gain a better understanding of how Brazil uses and protects its natural resources, in addition to what its stance is on FDI. I understand that there ought to be a balance, but I am uncertain of how to quantify this, and what measures the government is taking to keep this n check.

Brazil is a country that is land-rich. I expect to better grasp how a country with such a sizeable population and high population density makes decisions. Not all of the country is inhabited, possibly due to its geography. What amazes me is that even its smaller cities have rapidly grown into multi-million person metropolitan area.

On an individual level, I think that I will have an exceptional opportunity for personal growth. I have traveled quite a bit in my life, and each time that I visit to a new place, I enjoy the experience of discovery. Specifically, each country that I have visited has given me an opportunity to connect with the locals, and to understand what the local perspective is on life, culture and external elements. I anticipate gaining a better understanding of the business norms too.

I am not the only one with preconceptions of Brazil, just the mention of it widens any listeners eyes. Personally, I expect to gain a better understanding of the people. I’d like to see how they live, where they work. Professionally, I’d like to pick up how social and economic issues affect how people behave and go about their daily lives. Allow me to provide an example.

 

The last time I was in Colombia, I saw a pretty young native standing in a plaza with three mobile phones in hand. I wasn’t sure what to make of it, so I asked a local, “What is she doing?” “She is a street seller, she is selling minutes.” Minutes?! What do you mean? I patiently absorbed the explanation. People go to her to make phone calls. Why don’t they use their own phones? They do, but her minutes cost less… The ‘Minutes Girl’ has purchased prepaid minutes from the phone company in bulk, thus she is able to offer her customers a lower price and pocket the margin. I observed her for a couple of minutes. I noted that her customers varied from passers by, to even some that potentially did not even own a phone. Impressive, but I wonder if I will encounter something like this in Brazil?

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Finally, I expect to be able to better comprehend the ethical challenges of this emerging market. I understand that there is a growing social gap between the middle class and poor. I’d like to gain a better understanding of how this interrelates with the wider economic picture.

A significant benefit to visiting this liberated ex-colony is to enhance my international career. I really think that an MBA isn’t really complete without a significant element of international exposure. The second you leave home, the rules change. You can’t really learn certain things in a book, you need to experience them first hand. In this case, formal studies take a back seat.

I am no stranger of South America, having visited the llanos of Colombia, as well as the Peruvian Andes in my youth. To me, South America feels very much like an untapped resource, and its influence on the world stage is yet to be recognized. South America has a combined population of 387m people, with Brazil representing circa half of that. Those kinds of numbers are striking, and what keep Brazil a force in South America to be reckoned with.

This leads me to the specific lessons that I would like to draw from this trip. For this bit, I’d like to focus on some of the socio-economic factors. I understand that Brazil is a country with a high level of poverty. Reports state that poverty is at 16m, approximately 8% of the population. Poverty is an aspect of society that deeply concerns me, and I would like to better understand what can be done to minimize it. Understanding how to break the cycle of poverty is one of the specific things that I would like to learn from this trip.

Poverty is an aspect of society that deeply concerns me

I remember growing up and visiting my father’s homeland as a child. Colombia is a country at is rich in natural resources, it’s wildlife, from the Llanos to the Amazon, is expansive. There is a good percentage of the population that performs daily manual labor, and earns a modest living. Luxuries such as cars, private healthcare, higher education and safe housing, some things that many Americans take for granted, are things that many low-income locals simply cannot afford. Many of them resort to living their modest lifestyles knowing that there is very little possibility of breaking the cycle of living on the poverty line. I’d like to learn about the efforts currently in place that attempt to thwart these social standoffs.

My experience thus far of South America is limited. I see a continent that lives with its indigenous people and maintains relative peace at its borders. Although I have yet to step into the country, I want to understand what makes people tick, what brings a level of satisfaction that these people have regardless of their material worth. Despite their difficulties, I have a feeling that Brazilians hold their religion close to their hearts and exert themselves to enjoy life to its fullest. From what I perceive, they have learned to live with their resource. In Colombia, food is abundant, housing is affordable, and work, either through services, farming or the like, is available. I look forward to seeing what similarities Brazil holds to its South American counterparts, as well as the differences with North Americans and Europeans. Lastly, I hope that my preconceptions are close to reality, and if they aren’t well I hope that they are more spectacular than what I could begin I could imagine!


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