The Brazilian Economy

Brazil is the fifteenth economy in the world, with a GDP of 523,070 million dollars in 2003, almost half of Latin America’s Gross Domestic Product, and one of the main markets in the world with 170 million consumers.

GDP - real growth rate: 2.4% (2005 est.)

After the transitional presidency process, the bases have been established in order for Brazil to be, at last, capable of embarking on its growth path in the medium and long term with rates over 4% in the next few years, so that they are able to overcome the enormous inequalities and deficiencies of their country.

In the last few years, Brazil has adopted a policy that fosters the opening of their economy to foreign capitals. The Stabilisation Plan, the National Privatisation Programme, the reforms to the Federal Constitution in the provisions relating to economic matters and the flexible treatment provided by the mercantile and taxation legislation to foreign capital, among other measures, have placed Brazil in a highly competitive position attracting capitals.

Brazil’s economy outweighs that of all other South American countries and is expanding its presence in world markets.

The following foundations for foreign investment are laid out in the legal framework:

  • Foreign investment shall only be undertaken freely throughout Brazil, by means of integrated subsidiaries or joint ventures, regardless of the participation proportion.
  • Prior authorisation is not necessarily required.
  • Equal conditions for national and foreign capital.
  • Free capital repatriation and free transfer of interests and dividends abroad.

Brazil has a territory the size of a continent that takes up almost half of South America and is bounded by all the other countries in the continent, except for Chile and Ecuador. From the great and huge Amazon to a metropolis such as Sao Paulo, Brazil is a country full of contrasts and incomparable diversity as far as landscapes; ethnic groups and cultures are concerned, offering the possibility to develop multiple tourist activities.

The Northeast (Natal), with a coastal area full of semi-virgin beaches, is the main destination in search for “sun and beach”. However, there is not only that, the historical North-eastern area has a great racial diversity and a traditional way of life that has led to the creation of a community with its own music, dance and art.

Find out more about the Economy in Brazil

Tourism

Foreign tourism has doubled in the last four years, the number of Spanish tourists visiting Brazil being the one that has experienced the highest increase, since it has multiplied itself by 15.

Brazil represents half of the Latin American GDP, but as far as the tourist sector is concerned, it only represents 26% of the income obtained in South America and 0.64% of the world income.

Nevertheless, the new administration led by President Luiz Inácio “Lula” da Silva, is aware of the possibilities of this sector in terms of foreign currency and job creation and is committed to foster this field in a more elaborated way than just the traditional promotion focussing on sun, beaches and carnival. They have started by setting up the Ministry of Tourism and by turning EMBRATUR into a specialised agency in the promotion of Brazil abroad and in attracting conferences and events. In April 2003, the Federal Government presented the “National Plan on Tourism 2003-2007”, the aim of which was to search for joint and coordinated efforts from the federal, state, and municipal governments, the private sector and society in general.

From 1995 to 2000, in the framework of the “Tourist National Policy”, the Brazilian government devoted itself to the task of financing and implementing the tourist infrastructure in those spots that were considered to potentially induce private investment, through the “Action Programme for the Integrated Development of Tourism” (PRODETUR).

Even though this programme involved activities in four action areas (Southeast; South; Centre West Amazonia, and Northeast), it was mainly developed in the Northeast.

PRODETUR Northeast

In a first stage, investments exceeded USD 736 million, with USD 400 million coming from the Inter-American Development Bank (IDB) and channelled by the Banco do Nordeste (BN), and the remaining USD 336 million coming from the Brazilian government and the governments of the North eastern states. A characteristic feature of this stage of the project was the importance given to overcoming the basic infrastructure deficit. The investment composition in PRODETUR/NE Stage I was the following:

  • Preservation and Protection of the Environment 3%
  • Structure/ modernisation/ capacity-building 4%
  • Recovery of Historic Heritage 5%
  • Transportation 12%
  • Basic plumbing 24%
  • Airports 34%
  • Other 12%

Source: EMBRATUR, 2003

The investment undertaken included the creation of 8 airports, the construction or improvement of roads of 1,020 kilometres, basic plumbing services for 1,076,000 inhabitants, recovery of 731,732 m2 of historic heritage, environmental preservation of 70,426 hectares and capacity building of 149 government bodies responsible for managing the activities at state level.

The main objective of the second stage PRODETUR/NE Stage II is to consolidate the investments undertaken in the fist stage.

How to get there

The current airport at Natal (Severo Ochoa) is located 35 minutes away from the Lagoa Do Coelho Resort and receives more than 500,000 travellers a year. The new Sao Gonzalo Do Amarante Airport, the works of which are due to be completed by the year 2009, is foreseen to be the biggest commercial airport in Latin America and the fourth in the world, which will be holding 5 million travellers and will be only 15 minutes away from the resort. This airport will have a 3,600 metre long landing strip where the biggest aeroplane ever built, the 380 Airbus, with a capacity of 800 passengers, will be able to land.

Flight details

You can fly directly to Natal, Brazil from London Gatwick and London Heathrow with Tap Air Portugal and Alitalia respectively. Flights take 9 hours.