Crunch time for Brazilian infrastructure

Infrastructure investments (R$ billion and %)
 

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Key findings

“For Brazil, not building infrastructure is not an option."

Filipe Jens, director of finance, Odebrecht
“Bureaucracy, and the tax structure... these are the huge, huge barriers — the bottlenecks — that Brazil has to overcome."

Paulo Resende, of the Center for Studies in Infrastructure and Logistics in Belo Horizonte, Brazil
The infrastructure budget for the 2016 Olympics in Rio is $14.2 billion.
The government is urgently attempting to boost the capacity of its overcrowded airports. In 2011, 179 million passengers used 67 Brazilian airports — 108 million more than in 2003.
In August 2012, Brazilian President Dilma Rousseff said her government will invest nearly $69 billion by the end of 2014 to improve Brazil’s transportation systems.
Foreign direct investment in Brazil rose last year

As South America’s biggest economy races to meet World Cup and Olympic deadlines, Brazil’s long game also comes into view

Brazil has been making news for the size and scope of its infrastructure ambitions ever since they were jump-started in 2007 by the government’s Growth Acceleration Program of Investment — PACI — followed by a second program that began in 2010 — PAC II — that has led to more than twelve thousand private and public infrastructure projects in the works. Some of the biggest opportunities for private companies lie in transport, partly preparing for the World Cup and Olympics. The country’s booming export of commodities is also spurring heavy investment in ports and railways.

Not that Brazil is by any means immune to macro-economic shifts.1 Last November’s Economic Outlook from the OECD, for instance, underscores both the struggle and the vitality of the Brazilian economy. On the one hand, Brazil’s GDP growth has been revised downward to 1.5 percent, the lowest of all the BRICs, yet the same report projects that Brazil’s GDP growth will bounce back to 4 percent and more in the next two years.2 Indeed, the debate is not if, but when Brazil will come booming back again.

  1. The Bank of International Settlements recently cited the Euro-crisis as a notable reason for Brazil’s economy growing just 0.2 percent in the first quarter and showing seasonally adjusted growth over 12 months of under 2 percent. “Harder Times Coming For Brazil, Says Bank For International Settlements.” Kenneth Rapoza, Forbes Investing, June 24, 2012, http://www.forbes.com/sites/kenrapoza/2012/06/24/harder-times-coming-for-brazil-says-bank-for-international-settlements/
  2. “General Assessment of the Macro-Economic Situation,” OECD Economic Outlook, Vol 2012/2, November 27, 2012, pg 31 and pg 222. http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economicoutlook-volume-2012-issue-2_eco_outlook-v2012-2-en.

Emerging markets infrastructure series articles

Published Title Article
10/31/2012 Closing the talent shortage gap in the emerging world View PDF
04/01/2013 Crunch time for Brazilian infrastructure View PDF
05/10/2013 Separating fact from fiction in the China-Africa relationship View PDF
07/02/2013 China’s war on water scarcity View PDF
07/23/2013 The opportunity and challenge of India’s infrastructure View PDF

Emerging markets capital
projects and infrastructure

Infrastructure investments (R$ billion and %)

Emerging markets capital
projects and infrastructure

Foreign direct investment in Brazil rose last year