Emerging Market

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Social Challenges

In Brazil, poverty is the main problem and that is no project to reduce directly. Brazil doesn’t develop a bailout plan for poor people. According to Gini Coefficient index of inequality assessment study, Brazil’s population comprises of the poor. Besides that, the crime rate is also the major social challenges, muggings, kidnappings and gang violence are always appearing in the society. And then the police brutality and corruption is a serious issue.

Moreover, child labor is one of the main issue in Brazil. The problem is child doesn’t have education or poorly education, absence from the class caused poor families bring out child labor. In fact, education can change the future but Brazil’s education being the backbone of economy under social sense.

Economical Challenges

The obvious threat brought by global warming. Brazil’s agriculture depends on climate which is a big negative challenge. Because agriculture is an economic contributor in the Brazil. Also, it has to face diminishing resources that is the oil reserves will get exhausted. Brazil need to develop the alternative energy.

Trade market

According to Hong Kong Trade Development Council(HKTDC), the inflows of foreign direct investment to Brazil exceeded US$62.5 billion in 2014 and China contributing US$730 million.

According to International Trade Administration, Brazil is ranked 19th best market for original equipment parts and the 29th for aftermarket products; Brazil has a large market with positive advantages that is huge domestic market of some 200 million consumers. Brazil is hosting of the first-ever Summer Olympics, the economy maybe will revive in domestic consumption and investment.

Investment market

About the export front, Brazilian real is weakening which can help bolster export and cost competitiveness in Brazil, it can also attract foreign investors and manufacturers to set up their production plants and investment in Brazil.

In Brazil, the main investors are Spain, Belgium and USA, and the mainly attracting foreign investment include oil, gas, telecommunications and finance.

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This table is showing us the FDI inflows by countries and industry:

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Brazil have some strong points to let investor to invest. Extensive raw materials are the main reason to attract them invest. Also, a large domestic market and a diversified economy are the second reason.

Migration market

The most obvious feature of immigrant areas is Southeast in Brazil, it gathered more domestic and foreign immigration. Northeast of Brazil is the most impact areas and Southeast Asia and China immigrants have improvement trend in recent years.

Ideological factor

Culture can be briefly as a set of values followed by a group. (Ghauri and Cateora, 2010) Some scholar’s research proposed that Brazil is the weak system of political, ideology affect Brazilian Labor Party government’s foreign policy, even the economy has been sacrificed, the trade deficit further expanded. The “money diplomacy” doesn’t establish a leadership in Brazil, and it make more limitation with country development.

Economical factor

The large population and FDI inflow makes the potential for growth in the country. Also, there has many middle-class that means the gap between rich and poor is declining. Additionally, the currency will consider to be overvalued, although the central bank reduced the risk of currency. It will affect the export of the country. There has a good point about the labor costs are considerably low because both of the domestic and foreign enterprises are treated equally on them.

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Political factor

Policy is the important factor to impact the development in the country. The Brazil government is proactive and stable, but the corruption still remains an important and big issue, it is about small business. According to Transparency International, the corruption perceptions index 2013 shows Brazil is ranked 72nd out of 180 countries.[pic 7]

Conclusion

Brazil is the emerging market country which has emerged as a stronger and attractive global player in the world. Although Brazil have more challenges from economy or society, it has more natural resources and agriculture to support country. But GDP is a big and essential issue in Brazil, the GDP, GDP per capita and the percentage of real GDP growth is decreasing. Fortunately, Brazil focus on the attraction of foreign direct investments and foster the competitiveness of Brazilian companies.[pic 8]