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Why Countries Should Be Investing in Brazil

investing in BrazilThere are numerous reasons to invest in foreign aid in general. That can include partaking in growing the global economy, promoting international human rights and opening donor countries to potential investment returns. What makes Brazil a particularly good market to invest in is its promising role in the global economy. There are several reasons why investing in Brazil is beneficial.

COVID-19 Response

As of January 2021, Brazil has the third-most COVID-19 cases worldwide. The Brazilian economy was not in its best shape at the start of the pandemic because it has not fully recovered from the 2014-2015 recession. This made the economy vulnerable to precarious economic shocks that resulted in increased poverty, unemployment and small business fragility.

The COVID-19 pandemic has left countries like Brazil with possible lasting economic damages. Many emerging and developing countries rely heavily on foreign aid for financial and humanitarian support. Offering foreign aid to Brazil will not only help pave the way for a domestic post-COVID recovery but also alleviate some of the negative impacts of the pandemic through humanitarian benefits.

Diversified Opportunities in Emerging Markets

The Brazilian economy is classified as an emerging market. Emerging markets are economies that are transitioning into a developed economy. Since the launch of the MSCI Emerging Market (EM) Index in 1988, which measures portfolio performances of emerging markets, investing in emerging countries proved to create new and diversified opportunities outside of common markets.

Market Expansion and Economic Growth

Since 2016, Brazil has shown an increase in GDP growth with approximately a 1.3% increase. In 2020, Brazil fell back into recession because of COVID-19. However, Brazil’s economy displayed growth and has played an important role in the growth of the Latin American economy as it makes up 35% of the Latin American GDP. It is approximated that the Brazilian market reaches 900 million consumers in just the Americas.

On how quickly the Brazilian economy rebounded, Bloomberg reports boosted domestic demand and exports with a 9.47% rise in economic activity index from July to September of 2020 in comparison to the previous months.

As Brazil recovers from COVID-19’s economic impact, it leaves opportunity for foreign investors to take advantage of Brazil’s growing market, especially with its low interests. Some of Brazil’s profitable sectors include real estate and agricultural goods like coffee, sugar cane, corn and soybean. Participating in these sectors expands Brazil’s domestic market and hence the world market size.

Geographical Location

Especially for the United States, Brazil’s proximity allows easier trade. For other advantages, Brazil’s geographical properties for the agriculture sector also make its commodities attractive. Approximately 28.7% of land is used for agricultural production which makes up more than 4% of the annual Brazilian GDP. Following China, the United States and Australia, Brazil has the fourth-most amount of agricultural land.

Foreign Investment Returns

Encouraging enterprises to invest in foreign aid can ultimately result in great returns. A common type of foreign aid for these corporations is Foreign Direct Investment (FDI). Through FDIs, corporations can potentially gain lasting interests, multinational consumers and flexible production costs. This type of foreign aid also brings developing countries like Brazil innovative technology, investment strategies, jobs and infrastructure from investing corporations of developed nations.

Foreign investment is critical to developing and emerging markets. Investing in Brazil promotes development and sustainability and also benefits foreign investors greatly. Furthermore, foreign investment assists economic recovery following unforeseen economic shocks like that of the COVID-19 pandemic.

– Malala Raharisoa Lin
Photo: Flickr

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The Saturation of Social Media in Taiwan

According to MSCI, a research agency for global investments, Taiwan has the third most successful emerging economy in the world. Unfortunately, when compared to all countries, Taiwan’s economic data is less impressive. The need for further economic growth and infrastructural improvements places Taiwan in the gap between emerging and developed nations. However, the penetration of social media in Taiwan is allowing its citizens to bridge another gap: the global digital divide.

Despite the incredible economic strides Taiwan has made in recent years, it is still considered an emerging nation. Shortcomings in its infrastructure, including faulty gas lines and poorly constructed housing developments, contribute to Taiwan’s inability to achieve categorization as a developed nation. National health issues, such as pollution from factories, also play a role in the retention of Taiwan’s emerging status. MSCI states that the biggest hurdle Taiwan has to overcome is making its market more accessible to other countries.

Taiwan still has improvements to make, but it has engaged impressively with the world by embracing social media outlets. The saturation of Facebook in Taiwan is particularly remarkable. Taiwan possesses 82 percent more Facebook users than any nation in the world.

Most Taiwanese Facebook users utilize the website for picture sharing and messaging, but the avid use of social media in Taiwan has more important implications than casual communication.

The Internet and digital media influence the size of the global digital divide. This divide refers to the dearth of informational accessibility in developing nations versus the informational abundance of the developed world. 67 percent of the Organization for Economic Cooperation and Development, which is comprised primarily of developed nations, have Internet access. Only 3.8 percent of Sub-Saharan Africa has Internet access. The Internet is integral to life in the modern world, in which economic transactions, political ideas and social interactions transpire increasingly via the web.

The prevalence of social media in Taiwan is a testament to its global engagement. The nation’s numerous Facebook users are subsequently gaining access to information they did not have before, communication they could not accomplish before and even business transactions they could not make before. Many Taiwanese companies use Facebook for advertising, knowing it will be seen by thousands of users.

While Taiwan’s enthusiasm for Facebook and other social media outlets may seem trivial, it is proof of the global integration that indicates development. Legislation such as the Digital GAP Act has been crafted with the intention of addressing the global digital divide, so that developing nations may gain the advantage of the Internet. Taiwan is already reaping the benefits of the web and making its way to developed status. That’s worth a “like.”

– Mary Efird

Photo: Flickr