Brazil is big in South Florida's future, but how it fits remains a question
By Zachary Fagenson
Unless you've been living under a rock, you know Brazil is going to be a key economic partner for South Florida in the coming years, yet how the two regions will interact has been somewhat opaque.
Brazil, experts say, is a massive market that requires local expertise and cultural know-how. On top of that, a complex, paper-based Brazilian court system makes getting a business started difficult and resolving legal issues a lengthy process.
The biggest opportunities in Latin America's largest economy, experts predict, will come in the form of providing services to Brazilians looking to do business here. There will also be opportunities for larger exporters to send those goods to Brazil that they're not producing, but that list is rapidly changing as the country continues "growing up."
"From the point of view of Brazil there is definitely reverse flow, in other words a growing amount of interest by Brazilian companies and banks to expand in Florida," said J. Antonio Villamil, economist and dean of St. Thomas University's business school. "Offering legal expertise, accounting expertise, market research expertise for Brazilian companies coming here is one area to grow the economy here.
"Secondly, there is also a growing flow of Brazilian investors in real estate and international tourists that are coming to Florida," he added.
Brazilians tourists contributed $1 billion to the local economy last year, according to the Greater Miami Convention & Visitors Bureau, and have been buying up luxury condos up and down Miami's beaches.
In a report for Enterprise Florida, the state's economic development agency, Mr. Villamil said at 4% to 5%, Brazil is expected to have one of the highest average growth rates over the next five years.
Yet local companies looking to export to Brazil will need to be mature enough to send large shipments there and will also need a local partner and knowledge of what kinds of goods to send and how.
"One, there is a lot of competition," Mr. Villamil said. "Two, Brazilians produce many things now that you could [once] export, for example high-technology products, so you need to know the specific industry. You need to have a representative office."
Despite the challenges, the opportunities are there.
"What we're going to see is significant growth and demand for capital goods because they're going to be improving their infrastructure," said Manuel Lasaga, president of Miami-based economics consulting firm StratInfo. "Then, with the major global events they're hosting, I think that's also another infrastructure opportunity we're going to see in the next year or so."
Brazil is slated to host the summer-long World Cup tournament in 2014, and the 2016 summer Olympics are to be held in Rio de Janeiro. The budget for the games is about $15 billion.
"They're under pressure to get these major facilities up in time," Dr. Lasaga added.
With those projects in mind, smaller exporters need to learn what goods are needed and where.
"If it's in energy, can they get some expertise and sourcing of machinery they can supply to the market?" Dr. Lasaga asked. "What's critical is that the small exporters understand change in demand.
"What they were buying 10 years ago, they're manufacturing or importing from China," he added.
However the economic ties play out, entrepreneurs need to be prepared to take advantage of whatever opportunities arise.
Brazil was the Miami Customs District's top trading partner in 2010 with $13.3 billion worth of goods moving back and forth.
Additionally, about 250,000 Brazilians live in South Florida, Brazilian Consul General Ambassador Luiz de Araujo Castro said during a presentation at the Beacon Council, along with 54 weekly flights between Miami International Airport and that country.
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