How to Increase American Investments in Brazilian Northeast
Roberto Trigueiro Fontes*
The Northeast of Brazil has a privileged geographic localization. In Brazil and South America, it is the closest region to the American and European markets, with modern ports and airports on ways of enlargement. The ports of Pecém, in Ceará, Suape and Recife, in Pernambuco, and the Petrochemical Pool of Camaçari, in Bahia, are good examples of this infrastructure, that helps on the flowing out of the production.
Besides this, the 9 States of Northeast that represent, nowadays, 30% of the Brazilian population, have a fantastic sea coast, perfect to tourism. In addition, a tropical weather with a pleasing temperature almost all year long, makes the region a place of tourism for long terms. The special weather is not restricted to the coast. In the countryside of Northeast, the semiarid weather is the only one on Earth which does not turn itself into a desert, like in Chile, Texas or Sahara. With this, the clime of the countryside of Brazilian Northeast is unique to the culture of certain fruits and vegetables, that have been massively exported to the United States and Europe.
The high costs of investments on industrial and economic pools in the South of Brazil, particularly in São Paulo, are attracting many national or foreign companies to the Northeast as an option for installation. To the development of the Region, the Government offers special financing programs ( by the Brazilian Northeast Bank and the Nacional Bank of Development ), along with interesting tax benefits. The labor force has shown a considerable improvement in all areas, since the technical level to the management, and consultancy, including law, and even medical assistance.
Among the options of American investments on the Northeast of Brazil, the following below may be highlighted:
Tourism: The investments in tourism in the Northeast of Brazil have been receiving solid private and public injections of money, by Brazilian Northeast Bank and Inter-American Development Bank. These investments run from the establishment of a small inn to the construction of huge Resorts ( just like in Porto de Galinhas and Cabo de Santo Agostinho, in Pernambuco, and Sauípe Coast, in Bahia). Also investments in infrastructure as airports, highways and those focused on the quality of the labor force have remarkable return, especially with foreign investments. Hotels and cruise lines – which have been concentrated on Caribe – are excellent options in the Northeast of Brazil.
Fruits: In Petrolina (Pernambuco), Assu and Mossoró (Rio Grande do Norte) and in Quixeré (Ceará), high-quality fruits have been daily exported to the United States and to Europe. Cultures of mango, grapes, bananas, pineapples and even the production of wine are well served by the use of high-technology along with a proper weather to the cultivation. Just as an example, Petrolina is often served with four harvests of grapes a year. This branch is promising in the Northeast, considering the investments in the enlargement and construction of the cargo airport of Petrolina and Rio Grande do Norte respectively. The investments do not come only from the producers, but from quality certifying companies, irrigation companies and others.
Technology: The digital pool of Recife, concentrated on Porto Digital, is already one of the most important centers of software production in the South Hemisphere. Companies as Microsoft have units there and most of its staff is composed by local professionals, many of them graduated from the Federal University of Pernambuco, a center of excellence in research and development. Recife is a great alternative to technology investors and companies with its high performance products.
Petroleum: The exploration of petroleum in Brazil revealed the Northeast region as an important area to develop this activity. Some companies have already established there, even with oceanic prospects, in Ceará, Rio Grande do Norte and Sergipe. The world economic context will certainly make Brazil and the Northeast region strategic points of both production and distribution of oil.
Arts and Crafts, Leather and Wood Products: The production of arts and crafts in Brazilian Northeast is extremely diversified. The mixture of races that formed the northeastern population, created also a unique culture in the world. Laceworks, objects of argil, leather and wood are admired throughout the world. They are made by refined artists. Excellent alternative to the American and European markets because of its low cost and peculiar characteristics.
The activities above are a few examples of good options of investment on Brazilian Northeast. One way of increasing this economy is by means of the capacity of investment. With low saving levels, the Brazilian companies have difficulty to invest. The American companies do have this capacity, because of the low costs of Northeast region and the difference on the rate exchange, it does not represent a huge expense of money.
It is also easy to find the presence of American culture in several points. Well known companies such as McDonald's , Coca-Cola, UCI, and others, have been investing in the region for a considerable time. Nowadays, the receptivity and hospitality of Northeastern and Brazilian people is an important sign to the American investors to look at the Northeast of Brazil as an strategic partner and friend in future investments and relationships.
* Attorney at Trigueiro Fontes Advogados