I have heard so many different, contrasting things about Brazil throughout my life. Growing up on Kauai, I mainly heard about the great waves, beautiful beaches, and cheap bikinis from the Brazilian surfers who visited the islands. When I lived in Peru for a year and a half, most of the business leaders I met had deliberately avoided talking about Brazil, focusing instead on Chile and Argentina, where they spoke the same language and doing business was just “easier.” I also ran into more than a few backpackers who all reported some version of the same story - “When I was in Brazil, these guys robbed me on the street and they took my wallet, passport, and camera, but man, I still had the best time ever!”
I continued to read countless opposing headlines about Brazil. One moment, it’s the “Country of the Future”, the next, there’s an increase in violent crime. Hyperinflation is finally under control, but at various points during the 90s, inflation was over 3,000%. In 2002, President Lula adopted a moderate platform and made significant strides to grow the middle class, but just last month, he was detained and is being investigated on suspicion of corruption. An article in the Economist says, “Since 2003, some 20m Brazilians have emerged from poverty and joined the market economy. These new consumers buy everything from cars to cookers and fridges to flights.” Simultaneously, Brazil ranks as one of the most difficult countries in the world to do business.
I’ve always been curious about the real story. Does Brazil deserve its place among the other BRIC countries (Russia, India, China), or is the “Brazil Cost” still too large? Is it the “Country of the Future” or is that just a pipe dream? What’s really going on in Brazil?
When the Center for Global Management announced that it was organizing a Global Immersion course that would travel to Brazil called “An Evolving Brazil – What Does the Future Hold for the Largest Economy in Latin America?” led by legendary Professor Eric Sussman (no, we’re not related), I knew this was my chance to finally get answers to some of my questions about the world’s seventh largest economy. It was a unique opportunity to fill the deep hole in my knowledge of Latin America. So I jumped at the chance to spend the spring break of my second year in Brazil. Here’s what I heard and saw:
Salvador / Chapada Diamantina
A small sub-group of second year full-time MBAs and I headed down five days before the official start of the Global Immersion course to make the most of our time in Brazil. Our side trip explored the capital of the state of Bahia, called Salvador, and a little known national park called Chapada Diamantina, about a five-hour drive from Salvador. When we arrived at our Pousada in Salvador, I asked the owner about the Zika virus. Was all the hype real? He said, “Well, the mosquitos that carry the Zika virus come out only during one part of the day, but during the other hours, the mosquitos carrying Dengue and Chikungunya are out, so it’s best to wear bug spray all the time. Oh and also, don’t wear any jewelry when you walk around. It will most certainly be robbed.” That evening, I sat in the plaza central jewel-less and covered with deet, drinking a fresh caipirinha and listening to a Samba band play while locals danced. It was vibrant, full of life, laughter, and excitement, despite all the impending threats – entomological and otherwise.
Chapada Diamantina lived up to BuzzFeed’s claim of being one of the must-see places in Brazil. It was stunning, and best described as a combination between the Grand Canyon, Joshua Tree, and Table Mountain in South Africa. It is the place to go for hikes, waterfalls, caves, stunning views, and breathtaking photos. We stayed in the little outpost town of Lençóis. Despite a significant downturn in tourism since Brazil entered its recession in 2015, tables and chairs are set out nightly on Lençóis’ cobble stone streets, and people sit outside eating, drinking, and dancing late into the night.
The drive out to Chapada Diamantina was fairly smooth, but the journey back was filled with treacherous potholes. We realized that all the large semi-trucks that we passed on the way inland were empty, and those on their way out were headed towards the port of Salvador full of raw materials. I began to understand why Brazil is ranked 105th out of 139 countries on the World Economic Forum’s “quality of roads” index. It was an example of the present paradox - a country reliant on the export of raw materials without sufficient infrastructure to sustain the exports long-term.
São Paulo
Our arrival in São Paulo (Brazil’s most populous city) marked the official start of our Global Immersion course. It’s a city of over 20 million people and the hub of all financial and business operations within the country. We were welcomed by a number of peaceful protests happening throughout the city. An estimated million people were marching through the streets demanding the impeachment of President Dilma Rousseff. All of the business leaders we met with after that commented that it was a very interesting time for our group to be in Brazil. In our first session, Mr. Claudio Berquo, associate partner of BTG Pactual, said, “Government officials had a meeting last Friday in Brasilia to discuss that situation. That’s when you know it’s serious because usually they only work Monday to Wednesday.” All the speakers we heard from had similar, very candid opinions on the situation, saying, “God gave Brazil an abundance of natural resources, no natural disasters, beautiful people, and a rich landscape. So to even it all out, He gave Brazil our politicians.”
Also, long-term planning in business is unheard of. Even in large, multinational corporations, they only plan for about a year out, saying the economic and political uncertainty makes it impossible to predict anything beyond that. One VC said that it forces Brazilians to get creative. “Creativity without planning is improvisation, while creativity with planning is innovation,” he said. “Brazil must move toward innovation.”
Despite all the turmoil, companies continue to make money. Grupo Protégé, a logistics and security company, has seen exceptional growth in its armored car cash transfer business, and Brookfield, a housing developer, has plans to construct over 15 deluxe condo sites in 2016.
Dean Olian had been in Latin America traveling with UCLA Chancellor Block and meeting with important and influential business and governmental leaders and institutions in the region and was in São Paulo at the same time as our course. On the Monday evening, Dean Olian presented a State of the School, which was then followed by an alumni conversation with four of our distinguished alumni. They discussed what UCLA Anderson has meant to them, the impact of their experience, and their career trajectory post UCLA Anderson. The conversation was followed by a networking reception at the hotel’s Havana Club. In addition to the students participating in the global immersion course, around 30 alumni, faculty, and newly admitted prospective students joined the event. It was wonderful to see so many people from the UCLA Anderson community networking together 6,000 miles away from Los Angeles. It really highlighted the strength and influence of UCLA Anderson’s alumni network and presence of UCLA in Brazil.
During the second half of the week, our Global Immersion course continued with the beautiful city of Rio de Janeiro as our backdrop. If São Paulo is Brazil’s New York, then Rio is Brazil’s Los Angeles, but far more beautiful (sorry, LA). A population of six million people is wedged between dramatic granite mountains, jungle, and gorgeous beaches, all being watched over by Christ the Redeemer. I knew that Rio was supposed to be beautiful, but what I didn’t know (and learned during our session at Halliburton Brazil) was that over 50% of Rio’s economy relies on oil and gas. Despite current world oil prices not doing Rio’s economy any favors, the city hums with bright optimism over the upcoming Olympics and its growing tourism sector.
By the end of the trip, I was already trying to figure out when and how I could get back. The perspective built by the Global Immersion course was invaluable. I now understand that Brazil is a country of extremes. Its culture is one built on contrasts. However, from what I witnessed, the lows never seem to outweigh the highs. If the country can figure out how to better capitalize on those highs, it will truly become the “Country of the Future”.
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