“God is Brazilian. You need us.”
Brazil is an awakening giant that needs money. Paulo Oliveira, CEO of BRAIN (Brazil Investments and Business) makes no secret of the fact that his home country has a strong need for foreign capital, more precisely about 150bn dollars per year.
Neither the government, nor the local banks can be the solution for Brazil’s need for capital. “Fiscal austerity doesn’t come from the government or banks, we need money from the capital markets”, Mr Oliveira underlined at the financial seminar of Luxembourg for Finance in Sao Paulo. Brazilian companies are searching for opportunities to invest in something other than interest rates or fixed capital. The so-called Multilatinos, a term that describes Latin American multinational companies, already increasingly invest outside Brazil.
Thus, Luxembourg is the ideal place to invest in Europe. Luc Frieden, Luxembourg’s Minister of Finance, underlines some important factors that speak for the Grand Duchy: “Luxembourg is politically stable and safe. Its crime rate is the lowest in the EU. Public finances are still in a good shape and Luxembourg is, moreover, one of the few countries left with a AAA rating.”
As the only true international cross-border financial services centre in the euro zone, Luxembourg is constantly improving its legal framework while at the same ensuring legal certainty for investors and business: “We don’t change the laws each Monday morning or after each election”, the Minister says. High performance IT systems and a highly developed Intellectual Property framework are two additional aspects that speak in favour of Luxembourg.
By 2030, Brazil is expected to become the 5th largest economy in the world, an economy that “understands the rules of the game, the rule of law”, says Mr Oliveira. Since 2006, its growth rate has been relatively stable. “The next step for Brazil is to become more regional”, he adds. Regional in this case means the American continent, but Europe is on the Brazilian map as well.
Fortunately, the European crisis doesn’t hinder Brazilian investors from putting out feelers across the Atlantic Ocean. “The crisis is an opportunity for Brazil to understand how to have a more balanced relationship with Europe”, observes Mr Oliveira. However, business is not only going in one direction. Recent years have shown that the wind has changed. Europe needs the emerging markets to maintain its competitiveness. Mr Oliveira’s conclusion is as simple as it is true: “God is Brazilian. You need us.” EA