To Invest in Brazil implies to Rely on Stable Growth and Long-term Sustainability, as well as low maintenance and follow up costs
When we wrote the first content of this page (Why Invest in Brazil?) back in 2017, one of the main keywords that appeared in economic and political literature, as well as in our thoughts, was “Potential”. The subsequent text, and the corresponding literature, will refer to Brazil´s, admittedly well-known, economic potential. And now we ask: what has changed since then, based on an updated perspective as of May 2023? The Brazilian economy has proved again, despite the Pandemic and an international Crisis Scenario (supply crisis due to the war in the Ucraine), much more resilient than expected, with even skyrocketing numbers in the real estate sector. The recent elections paving the way for a government change have not altered that. The economy is growing again, even from a conservative perspective – well represented by the international Rating Agencies – and Brazil´s future is looking more positive. Even the inflation is less accentuated than in Europe, including months of deflation. And this will impact considerably onto the real estate market (or, to use the portuguese term, “mercado dos imoveis brasileiros”), which recently has found its way back to a supply-demand-equilibrium and will become ever more attractive in the coming months and years.
What is the situation as of 2023? – Current Tendencies and Trends
There are a certain number of variables to be identified that turn Brazil into a favorable investment country already in 2022: With significant returns and favorable currency exchange rate, 2023 appears to be the year to invest in Brazil real estate. Demand is currently strong from both foreign investors and Brazilian purchasers.
The stock exchange in Brazil has seen a marked increase in buyers. It now has over 3 million individual and corporative investors, five times higher than four years ago. The property sector has proved one of the most attractive options. In 2020, there were six IPOs involving Brazilian developers with a total investment of R$5.2 billion. This number has doubled in the meantime. Returns from real estate are particularly attractive. According to the Brazilian Association of Property Developers (ABRAINC), the average return from property purchased in 2020 is 16.1% including capital appreciation and rental returns.
Low cost of living and maintenance in comparison to Europe
In the former years, when weighing the content of this section – why invest into Brazil? – we had to consider various factors and variables and in which order we should present them to clients. The favorable exchange rate has, for some time now, become a decisive and relevant factor for investments. However, especially from a comparative perspective, one of the most valid arguments nowadays are the extremely low costs of living and maintenance when compared to Europe. It is true that Brazil always had a history of inflation, and thus increasing overall prices. However, first here you have to consider that this occurs on a much lower level than in Europe. And right now Brazil is even experiencing deflation (july 2022: 0,68 %). This has created a situation in which general living costs are considerably lower than for example in Germany. Energy costs (electric energy, water, gas etc.) are only a tiny fraction compared to what you have to pay in countries like Germany. The same is valid for service costs – like maintenance, renovation, craftsmen and artisans. Here, in the same measure the costs are significantly lower. Add to this the much more lenient and tolerant legal regulations concerning house construction and maintenance (for example there are no regulations towards heat regulation or energy saving measures). Thus, to summarize, purchasing a property in Brazil is not only favorable – from an economic point of view – due to the lower purchase prices (among them the exchange rate effect), but also due to the much lower “follow up” or subsequent costs, that is lower maintenance and general costs of living.
The Exchange Value of the Currency
The devaluation and depreciation of the Brazilian Real is another reason behind the big interest from international investors in the Brazilian real estate market. Back in 2014, a square metre in Brazil typically cost the equivalent of US$3,040. Six years later in 2020, it costs almost 45% less – US$1,344. Now in 2022 we have arrived at an average value of 1,220 US$, despite a recent increase in value of the Real.
Brazil real estate also offers a cheaper and much more accessible option compared to properties worldwide. A survey by Numbeo of 500 cities in October last year (https://www.numbeo.com/cost-of-living/) found that Rio de Janeiro and Sao Paulo were among the more affordable locations. While a square metre in the most expensive city (Hong Kong) cost US$32,000, prices stood at US$2,084 in Sao Paulo (in 287th position) and at US$1,778 in Rio de Janeiro (330th position).
Analysts point to the double profit potential for foreign investors. They stand to benefit from the recovery of the Brazilian real against the US dollar and natural appreciation in the value of property.
Although the pandemic initially sowed seeds of uncertainty in the Brazilian real estate market, the sector is now riding the crest of the wave. Domestic demand soared from June onwards across the country to the extent that property is driving the economy in Brazil.
Developers nationwide report strong sales, particularly in Q3 when sales valued doubled compared to 2019. Some developments sold out in 24 hours.
“2021 will be one of the best years for the property market,” predicted Diego Villar, President of Moura Dubeux, based on 2020 figures.
Demand for second homes
Hand-in-hand with the surge in demand for property goes the increase for second homes. Northeast Brazil is a particular hotspot for investment in this type of property and analysts expect the trend to strengthen during 2021.
Demand comes from wealthy Brazilians who favour the Northeast as a prime holiday spot and from foreigners looking to invest in high-end second homes. Ceará was one of the most favoured destinations to invest in Brazil real estate in 2020.
Demand for quality homes
Lockdown gave many homeowners pause for thought about how they want to live. And most came to the conclusion that they want a better qualify of life for their family. In real estate terms, this translates to homes with more space, indoor and out and high-end fittings and fixtures.
2. General Considerations:
The main reasons why Brazil can nowadays be deemed one of the world´s best investment opportunities include, amongst others, a solid and resilient economy, a clean energetic matrix and a large domestic market. Brazil has suffered some setbacks due to the political crisis in 2016 and 2017, including corruption scandals and mis-allocation of funds. However, it was equally a testimony of functioning political institutions and a well working juridical system that brought the responsible to justice.
Economic core variables like the inflation rate or the PIB have improved considerably, and it is fair to assume that in the near future Brazil will experience an immense take-off in terms of economic performance. Currently, the so-called “country risk” (risco pais) is considered low according to JPMorgans Risk Index.
As the world´s sixth largest economy and supposedly soon the fifth largest the country also plays a leading role in Latin American economy and politics, standing out with increased attractiveness in the global scene.
While the global average economic growth has remained either negative or close to zero since of the 2008 financial crisis, Brazil´s GDP reached 7.5% in 2010, the highest score since 1986. The subsequent arguments and parameters are corroborated by references from literature that you can find on the “Literature” section of this homepage. Links to current journal and newspaper articles you can find here below.
3. Competitive advantages and Structural Features of the Brazilian Economy:
Solid domestic market:
- low vulnerability to international economic crisis scenarios
- constant growth (catch-up effects) due to increasing income and economic inclusion of larger parts of the populace
- high demand inelasticity
- high potential of growth in regions traditionally less developed
- Social and economic growth combined with stability and environmental long-term sustainability
- Accelerated modernization of Brazilian society and economy: increasing technological affinities, internet coverage, digitalization etc. Tech startups are disrupting several industry verticals through a consumer-centric approach.
Abundance of natural assets:
- ideal setting for agriculture due to availability of adequate rainfall and the fertile nature and most parts of Brazil
- the principal agricultural products include corn, sugar cane, cassava, soybean, oranges, coffee, cotton, tobacco and cocoa
- world’s leading producer of tin, iron ore and phosphate
- for more information see below in “Brazil – the Granary of the World”
“Brazil has the most valuable environmental assets in the world, and could become the global leader in green finance. This includes infrastructure and agribusiness, where the funding gap is huge and long term investment opportunities are unique.”
Sylvia coutinho, Country Head UBS Bank Brazil
Social and macroeconomic structure:
- highly stable macroeconomic background
- stability-oriented monetary policy and sound banking system (fiscal austerity)
- largely unaffected by international economic crises due to geographic distance to crisis region and economic autarchy
- low and decreasing inflation
- low and decreasing interest rates – see about the current interest rate development: https://tradingeconomics.com/brazil/interest-rate
- decreasing social inequality/improvements in social well-being
- poverty (people living with US$2 per day) has fallen markedly, from 21% of the population in 2003 to 11% in 2009 and 10 % in 2022 (a lower, yet steady decline)
- Between 2001 and 2009, the income growth rate of the poorest 10% of the population was 7% per year, while that of the richest 10% was 1.7% (decrease of the Gini-coefficient to 0.509 in 2012)
- favorable external debt composition and high foreign reserves (approximately US$ 310 billion as of 2023 – https://www.ceicdata.com/en/indicator/brazil/foreign-exchange-reserves)
“There will be a profound transformation of the financial industry, which will have a major influence on the cost of running a business in Brazil. For the first time we have single-digit benchmark interest rates, while the government is committed to important structural reforms and is improving its entrepreneurial culture and environment.”
Andre Stree, Co Founder, Stone
Multilateralism, Open markets and attractiveness for foreign private and corporative investors:
- several regional and municipal investment incentives (https://www.contabilizei.com.br/contabilidade-online/incentivos-fiscais/). An overview of the current fiscal incentive programs is provided here: https://www.apexbrasil.com.br/incentivos-federais
- increasing significance of exports (natural and agricultural resources as well as high tech products – for example EMBRAER)
- strong growing property market
- Average capital appreciation on completed property is 20% per annum with land purchases even more favourable
- world´s pioneer in Eco-Tourism (the world´s fastest growing tourism branch)
- high degree of foreign direct investments (Investment Climate Statement from the US Government: https://www.state.gov/reports/2021-investment-climate-statements/brazil/
Update: Having taken effect on the 29 of june 2019, during the G20 Summit, the newly established Free Trade Agreement between the European Union and the Mercosur can be considered a milestone without precedent on the road to economic prosperity for Brazil. The subsequent lowering of import barriers and tarifs will result in a strengthening of both economies, by increasing exports and imports, facilitating the transfer of ideas and technologies, and tying Brazil closer to Europe. It also implies a political partnership and has thus an encompassing nature. It will increase economic stability in the region, thus increasing investor confidence.
A general overview about nature and extense of the reached agreement:
A more in-depth look at the history of negotiations and details of the new free trade zone:
Clean and abundant renewable energy:
- sugarcane ethanol and hydroelectricity account for more than ¾ of Brazil´s energy balance
- world´s pioneer in flexible-fuel vehicles
- increasing focus on biomass, as derivative product of sugarcane ethanol production
- enormous growth potential of solar and wind energy
- regulatory incentives and direct financial investments by federal, state and municipal authorities
- accounts for more than 85.4% of the domestically produced electricity used in Brazil
Recently it was announced that Brazil plans a tariff reduction for renewable energies of 11 %. It will improve Brazil´s tariff ranking considerably and turning it more competitive.
“2020 will be a year of great opportunities for Brazil. The reality of the new (and lower) benchmark interest rate is accelerating the Energy Transition in Brazil – all components of the electricity supply chain – Generation, Transmission and Distribution are in full transformation towards renewables and energy efficiency and resilience. The Oil & Gas industry, for its part, is changing in terms of the number of players and major companie´s strategy along the entire value chain”
André Clark, President and CEO Siemens Brazil
Democratic and Institutional stability:
- stable electoral democracy since 1986
- free elections and universal suffrage
- strong political institutions, based on national consensus
- high degree of accountability
- strong federalism
- efficient legal system based on Roman-Germanic traditions
- high political stability of expectations
- Brazil is considered the most stable and crisis-resistant country in Latin America
- general absence of crisis zones and political “hotspots”: geopolitically one of the calmest and securest regions in the world
- stable member of the OAS (Organisation of American States) and MERCOSUR
- internationally engaged at an increasing level
- strong economic and political ties to the BRIC Countries
Immense improvements in infrastructure
- structural and regional investments (development of the Northeast, now extending to the north and center regions)
- see a more detailed list of current infrastructure projects below
Brazil offers a safe and outstanding investment environment and we consider it our task to introduce international investors to the best available opportunities, based on professonal consultancy and a wide range of services.
A Dynamic and growing Real Estate Market
The big question for those looking to make an investment today is: Is it worth investing in the Brazilian real estate market today?
After going through a year of 2019 marked by an improvement trend in the real estate market, yes, there are reasons to believe that we can maintain optimism. After all, the past year has been the best for the past five years, representing a growth in GDP numbers.
Civil Construction GDP, for example, which accounts for about 6% of national GDP, is projected to grow by 4,5 % in 2022, according to data from the Brazilian Institute of Geography and Statistics (IBGE). These numbers are an important thermometer for measuring the economy. Real estate financing that uses resources from the Brazilian Savings and Loan System (SBPE) passbooks, and which cover medium and high-standard housing, also reinforces positive perspectives.
In December 2021, they reached R $ 8.77 billion, which corresponds to about 2.2% more than in March last year, and 40.3% more compared to the same month in 2020. There is also a favorable projection for high-end purchases, according to the Brazilian Chamber of Industry and Construction (CBIC). It is estimated that launches and sales of residential properties will grow up to 14 % this year. High and medium-standard homes are identified as the main responsible for this increase.
Also according to CBIC, about 150 thousand new formal jobs in the civil construction area should be created by December this year.
The Corona-Crisis has created difficulties in the sector temporarily, as it has all around the world, thus representing a universal and levelling external shock. However, due to the very favorable exchange rate (as of june 2020) and the migration effect (investors are looking to invest into time-invariant investment values) a strong and solid growth has taken root as of 2023. The calls for lowering the interest rate (SELIC) are thus increasing (https://www.bloomberg.com/news/articles/2023-04-17/brazil-analysts-lower-key-rate-bets-as-fiscal-debate-heats-up#xj4y7vzkg)
Also see a recent interview with Brazil´s minister of economy, Fernando Haddad:
Brazil – The Granary of the World
One of the core areas that we focus in our investment consultancy, besides Real Estate, are investments in Brazilian agriculture (crops and cattle).
Not only due to its sheer landsize, but also due to its tradition as latin american breadbasket, Brazil has become one of the world´s foremost players in agriculture. Modern, efficient and competitive, the Brazilian agribusiness sector is a prosperous, safe and profitable activity with unsurpassed growth records. The prosperity of Brazilian agribusiness is a result of scientific and technological development in modernizing farming and expanding the industry of agricultural machinery and equipment.
The exemplary state of Tocantins (Brazil´s youngest state, founded in 1988) is considered Brazils granary, with almost perfect crop-growing conditions, ranging from fertile argile soils to an average rainfall of 1.700 mm per year.
In addition to having a diversified climate, regular rainfall, abundant solar energy and 12 percent of all the available fresh water on the planet, Brazil has plentiful land to plant crops. With 388 million acres of farmable, fertile land, the country has the potential to triple its current production of grains without the need for deforestation. In addition, with the productivity increase in the livestock industry, 30 percent of the 220 million hectares occupied by pasture may be incorporated into agricultural production.
According to forecasts of the FAO (Food and Agriculture Organization of the United Nations), and the OECD (Organization for Economic Cooperation and Development), Brazil will be the world’s largest producer of agricultural products by the end of the decade and has already established itself as the third largest exporter of primary products.
In recent years, the country has developed and consolidated one of the most efficient cattle-raising and breeding systems in the world. This development has been accompanied by low level tariff protections and minimal use of government subsidies. Production expansion was primarily due to productivity gains, backed with an efficient agricultural policy supported by extensive research and development. The agribusiness is responsible for approximately 25 percent of GDP and 40 percent of exports.
The success of the agricultural sector in Brazil also involves both scientific and technological development in the modernization of rural activity and expansion of agricultural machinery and implements industry. Agricultural research has enabled adapting crops to different types of climate and soil in the main production regions of Brazil.
The huge potential of Brazilian agribusiness, tied to quality technical-scientific research, opens up interesting possibilities for private investment in research and development in the country.
With a population of more than 190 million inhabitants, Brazil has one of the largest consumer markets worldwide. Today, two-thirds of the food produced in the country is consumed domestically and the rest is exported to more than 200 international markets. In recent years, only a few countries have had such significant growth in international trade as Brazilian agribusiness. The ongoing investment in research and development contributes to the success of the country in the production and exportation of various products. It is the first producer and exporter of coffee, sugar and orange juice. In addition, it leads in foreign sales of beef, chicken, soybean oil, grains and bran, and tobacco.
That said, the investment opportunities in the agricultural sector are abundant.
Brazil´s Infrastructure – Taking Off
Brazil has, admittedly, a frequently quoted investment deficit gap. This gap describes the difference between the optimal investment rate and the current or actual rate. The average investment rate in infrastructure in Brazil, taking all sectors (roads, railways, waterways, ports, sanitation etc.) together is 2,1 % of the GDP, while the optimal rate is estimated at 4,7 % of GDP. This means that Brazil has a lot of catching up to do, which has, though, recently started.
“The structural reforms and a responsible public spending coupled with several concessions of infrastructure programs are already bringing a positive demand growth and investments in the airline sector we had not seen in the last 4 years”
Jerome Cadier, CEO Latam Airlines Brasil
Until 2020 thousands of medium and large infrastructure projects are going to be completed and inaugurated (the major share of them of a private nature, indicating that the private sector is one step ahead compared to the public sector). All these represent “new fundamentals” in order to modernize and developmentally accelerate the country, including the reduction of the so called “Custo Brazil”. Let us thus take a look at some of these private, public and public-partnership projects:
- Large infrastructure investments by the federal government: the North-South Railway from Itaqui (Maranhão) to Anápolis (Goias) and an extension of this railway leading further to Estrela d´Oeste (São Paulo); the Northern Railway (Ferronorte) in Cuiabá which is a part of the Transnordestin Raily; Part of the Railway FIOL between Varreiras and Ilhéus; expansion/duplication of the Carajás Railway, part of the bridging across the Rio São Francisco; part of the conveying highway Agreste (in Pernambuco, 1.300 km) and the completion of the Pajeú highway, equally in Pernambuco (195 km); completion of the Sertão canal (250 km, Alagoas); completion of the Highway Cuiabá-Santarém (including access to the port of Miritituba); several new highways as well as overhauling of older ones, including privatized ones; 2.000 new agencies of the CEF (Caixa Economica Federal); around 5.000 small and medium-sized investments into health and education (according to PAC 2); around 1,5 million new habitations and residences, almost zeroing the “habitational deficit” of the country; around 400.000 new water and electricity connections (part of the program “Àgua e Luz para Todos” – “Water and Light for Everyone”) – practically zeroing the high anterior deficit.
- Large and medium-sized construction projects by the state and municipal governments: numerous metro stations in Sampa; hundreds of new hospital and first-aid-installations; thousands of kilometres of new sewer and drainage systems as well as water conduits, new schools (including reforms and expansions of already existing ones); hundreds of new sanitation embankments; new recycling and waste disposal installations, fulfilling the provisions of Law 12.305/2010
- Petroleum and gas: implantation of the petroleum exploration (pre-salt) at Campo de Libra; start of the construction of numerous new platforms and prospection/installation of new marine oil fields (PETROBRAS) in Sergipe (very large), Rio Grande do Norte (new pre-salt), Pará, São Paulo (Santos) and several other terrestrial oil fields in the interior of Paraíba and Ceará; installation of very large gas refineries in Maranhão and Minas Gerais;
- New huge ports and and terminals (TUP), indispensable for the currently overburdened port infrastructure: Large Port in Açu-Rio de Janeiro; another gigantic port in Itaguai-rio de Janeiro; new TEGRAN terminal in Itaguai/Maranhão (capable of storaging almost 10 % of the total corn production in Brazil); new terminal (Coopersucar) in Santos-São Paulo; installation of at least 30 TUP-terminals for private use; construction and handing over of numerous railway stations and highway hubs connecting to the large ports.
- Start of the mining exploration (iron ore) in Barmin (region of Caitité-Bahia), Honbridge (Salinas-Minas Gerais); in Porteirinha-Minas Gerais, of Vetria/ALL in Corumbá – Mato Grosso do Sul (very large); of AngloAmerican in the center of Minas Gerais (Guanhães e Conceição do Mato Dentro), including the “mineral-duct” leading to the super-port of Açu-Rio de Janeiro;
- Hydropower Plants (small and medium-sized) as well as solar plants and wind farms: around 30 new installations as well as renovation/overhauling of older ones; around 20 new windfarms in Ceará, Rio Grande do Norte, Piauí, Bahia, Rio Grande do Sul and Santa Catarina; installation of solar plants in Ceará and São Paulo.
If you want to be part of Brazil´s road into the future, consider investing into residential or commercial properties – our team will be happy to support you.
Further Reading and Current Articles (in Portuguese and English Language) about the Economic and Socio-Political Situation in Brazil (for more detailed publications and texts please see the Literature section):
- Brazil in a nutshell – General Information
- No more roller coaster ride for Brazilian housing market? – About the recovery of the Brazilian Housing Market (November 2017): https://www.globalpropertyguide.com/Latin-America/brazil/Price-History
- How did Brazil’s inflation rate get so low? (11. january 2018): https://brazilian.report/2018/01/11/brazils-inflation-rate-low/
- Low Country Risk due to high export numbers and strong foreign exchanges (22. april 2018): https://exame.abril.com.br/economia/exportacao-e-reserva-internacional-mantem-risco-pais-em-niveis-baixos/
- Mercado mantém projeções para a inflação e crescimento do PIB: https://g1.globo.com/economia/noticia/mercado-mantem-projecoes-para-a-inflacao-e-crescimento-do-pib.ghtml
- Economic Outlook Brazil (April 2018): https://www.focus-economics.com/countries/brazil
- Brazil’s home buyers bet on the ballot (October 19, 2018): https://www.ft.com/content/bbca3b3a-ce05-11e8-8d0b-a6539b949662 (This Article, written by Hugo Cox for the Financial Times, based on interviews, among others, with Dr. Andreas Hahn, focusses on potential changes in the real estate market in Brazil after the 2018 presidential elections – with a positive outlook for the upcoming Bolsonaro government.)
- Real Estate Investment Visa Introduced, a short Summary of the new Real Investment Visa, by Mike Smith. 27th of November 2018. (please click on the link)
- https://veja.abril.com.br/economia/governo-quer-dar-incentivo-fiscal-para-empresas-de-turismo-diz-ministro/ (The recent article in veja focusses on new fiscal incentives for touristic investments in all 26 states of Brazil)
- https://www.coface.com/Economic-Studies-and-Country-Risks/Brazil – A short updated overview about current macro-economic variables and a country risk assessment. The activity in Brazil is expected to gain some strength.
Digression: 20 Years in Brazil – A Subjective and Positively Biased Account of a Remarkable Country
A Short Essay by Andreas Hahn
There exist two types of literature regarding Brazil today: on the one hand heavily negatively biased reports about all that is supposedly bad and not functioning about economy, politics and public security, primarily in the international and leftist-inspired press. On the other hand there are, thankfully, numerous academic papers and objective monographies that highlight Brazil´s unique potential, its progress on diverse areas and its economic and socio-cultural road to the future. This homepage offers a lot of the latter literature to the diligent reader, about several economic topics, mainly focused on real estate and agriculture.
What is rare, however, is a third type of account on what is really Brazil: subjective accounts and personal experiences that are positively biased.
This very short essay is exactly that – a positively biased subjective report of the author´s life, work and experiences in Brazil. Now, we all are aware of the problems of subjectivity: good science, and thus good information, usually needs to be free of subjectivity. It needs to convey reliable, verifiable (or at least falsifiable – according to Karl Raimund Popper) facts and thus make planning and decision-making possible. As real estate consultant as well as professor of economics (rational choice) I have faced this necessity twice in my life.
During my academic years, my primary task was to teach social and economic science in an objective manner, free from ideologies, explaining theories and its empirical foundations and thus cry out loud against any subjective account. Of course, this is not always perfectly possible, especially in social and economic sciences whose laws are “soft”, rather probabilistic and not deterministic as in natural sciences. Many times I caught myself mixing up facts and my own normative points of view. This happens to all of us, and afterwards we can try to correct our mistakes. With a bit of honesty, this should always work. And if I may add a footnote here: these years as professor in São Paulo represent one of the first excellent experiences I had there: teaching to young students: eager to learn, disciplined, grateful. A glimpse on the enormous potential that Brazil, and its coming generations, have.
And then, during my professional years as real estate consultant up to this day: here also objectivity is key, convey correct information, abstain from exaggerations, analyze documents truthfully, and thus give the buyer or investor the possibility to actually plan, calculate and move forward – so he or she can make a rational choice. This all goes without saying, it is essential to any serious profession. And many times during the last years, when sitting in the “cartorio” and closing a sale, it reminded me exactly of my lectures on rational choice theory. Just that here it was not theory, it was empirical practice: make a purchase decision based on facts. But then something else became obvious to me: it is not only about objectivity, also subjectivity counts. How people feel, their first impression, the esthetics of a place, the energy. I had clients that based their decision on what they actually felt and on accounts of the history of the place.
So yes, even for real estate consultants, and for buyers and sellers, also subjectivity counts – and it can give an idea about what is happening.
When I came to Brazil for the first time in the end of 1999 as a first-semester-student of International Relations, I was curious and afraid at the same time: curious about this utterly new world. What might it entail? Will I be able to survive and exercise my first scholarship program accordingly? And then: I did not speak a single word of Portuguese back at the time. Additionally, I was afraid of more “tangible” things: I had heard a lot about the constant violence in Rio de Janeiro (I did my first exchange programme at the Universidade Federal Fluminense in Niterói), I heard about robberies and assassinations, about a world significantly inferior to good old Europe on all accounts. However, after I arrived and then continuously ever after, I was surprised – surprised about how wrong these stereotypes and early ideas have been. Which by the way appears to me as a general rule, and not at all exclusively to Brazil: Back in 2007 I was assistant lecturer at Texas Christian University in Fort Worth/US. During my preparatory weeks in Germany and Brazil I was quite worried – I had heard so many negative stories about the Texans, however narrow-minded and conservative and xenophobic and whatnot they supposedly were. And when I arrived, it turned out to be the utter opposite. Rarely, with exception to Brazil of course, did I feel so welcome and warmly treated as in the several places that I visited in Texas.
It is not my intention to delineate my whole “Brazilian biography” here, but to state one important thing: if I weigh the pros and cons of 20 years in Brazil, the pros tower over the cons as an alpine mountain ranges over a small flatland hill.
Let us just take the example of violence versus public security: a secure environment is essential – for almost everything. In economic terms, security increases the stability of expectations, thus making investments more reliable and improving economic activity, by reducing transaction costs and so on. Each basic economics textbook would provide approximately 20 pages only on the subject of security. So what to do in a country which is, allegedly, notoriously insecure? Well, I do not want to deny certain accounts, statistics and concrete occurrences, but most of these accounts are exaggerated – negatively biased. Few international publications mention how much security has improved in Brazil, only in 2019 the homicide rate dropped by 21,6 % (https://justica.gov.br/news/collective-nitf-content-1568311665.01). And here now I want to add my personal experience: in 20 years I neither suffered nor witnessed a single account of violence or even felony. Despite the many years that I lived and worked in several cities in Brazil (Rio de Janeiro, São Paulo, Salvador), and despite my, admittedly, lack of caution especially when I was younger (going for a 2 hours stroll on the beach 4 o´clock in the morning being just one of them) never anything happened to me. Well, some say, I possibly got lucky or I had a guardian angel. Yes, all this can be, though I prefer to believe that this simply reflects the fact that Brazil is far more secure than many people believe. And, with shame and sadness, I would like to add that in these very same years I was subject to crimes twice – not in Brazil, but in my proper home country Germany: in 2010 a break-in into my former apartment in Leipzig (on a sunny day 4 PM in the afternoon), and in 2012 a violent break-in into my car. This gave me a lot to think about. And it made me heavily doubt all these negative accounts on violence in Brazil. I would go as far and almost state that there is not really a significant differential in terms of violence and security between Middle Europe and Brazil.
I promised to keep this essay short, so I will not enumerate all the good experiences that I had during all these years in Brazil. I want to jump right to the end and write about what impressed me most in Brazil, what profoundly convinced me that Brazil is one of the grand countries of the future and which is equally important as numbers and economic hard facts: the Brazilian mindset, the people´s mentality, and more important their unbreakable optimism and belief in progress. When referring to the Brazilian mentality, what comes first to mind is usually the warmness, tenderness and kindness of its people, its preponderance of emotional alignments and its generally bright view on life. But there is more to that: what I noticed in Brazil is that there is something that Europe totally, and the US partially have lost: a pioneering spirit, a deep believe in progress and the potential of growth. This is not to say that Brazilians do not have an ecological, nature-preserving spirit. Quite the opposite. Rarely have I met a people so inclined towards care for and protection of nature. Increasingly, Brazilians are aware of the significance of their natural endowments for world climate and a sustainable future, despite all the bad media ostracizing Brazil as ecological villain. Brazilian cars move for a large part by ethanol or alcohol, even gas. Brazilian energy is almost completely devoid of nuclear or fossil power, relying heavily and increasingly on renewable energies. The environmental conscience is present at each step. During my years in Brazil I have met families with minimal income that spend more than half of their monthly available financial means to take in and care for street animals. Brazilians are fervently in favor of the criminalization of animal abuse and for nature protection whenever possible.
However, this ecological spirit never entered this “unholy union” with what I would like to call “future pessimism” as it happened in Europe. In Germany we call this the “German Angst”, a negative view on the future and the belief that growth and progress comes at the detriment of our environment and that, to put it bluntly, the only redemption would be a return to the stone age. This started in the 1950s with the dystopian prophecies of the Club of Rome, and then later emphasized by the green parties. What it did create was not a high awareness of the necessity of environmental conscience, but an intrinsic fear of everything that seems progressive and growth-oriented. And fear solves nothing, it paralyzes and creates setbacks. Fortunately, this way of thinking is quite alien to the Brazilian mind. People do in fact believe in progress, and they believe that growth and prosperity can be achieved while protecting our environment. And this is one of the many reasons why, considering the current status quo, Brazil has better future perspectives than Europe.
Those that visit our homepage will at once perceive that it is a commercial page, created by myself, a realtor, focused on consulting and real estate business in Brazil. And this it is indeed, without any doubt. When I created our office back in 2008, the intention, of course, was to inaugurate a well-earning, profitable and sustainable business model, aimed at generating income for me, my family and my partners. No point in denying that. But it is more than only that. Working in Brazil is impossible without developing a love for the country, a deep affinity for its customs and people, and a profound belief in its future. And while I aim primarily at attracting clients for my business, there is an ulterior motive: the hope to be able to change people´s perception of Brazil and correct all these lamentable biases. And I hope that even this short subjective essay might have contributed, at a very small scale, to that.
Dr. Andreas Hahn
São Paulo, 19. September 2019