The Boys and Girls from Ipanema

Reflecting on our recent international study trip to Brazil, I am enthused by the prospects for the country. Our opening visit to FIA provided us with an excellent macroeconomic overview of the country and its forecasts.  The young population (38% below the age of 20) bodes well for the country in providing a large labour force to fund retirement obligations that will only increase as the standard of living rises and life expectancy increases. In the short term however, this demographic structure creates significant costs for the state in education and healthcare. There are bottlenecks in infrastructure and skills (only on average 7.5 years of schooling) which if not dealt with with harm growth prospects and make inflation more difficult to control.

The visit to JWT, an advertising agency, in Sao Paolo, was a very informative one with interesting statistics on consumer habits and crucially the rise of the middle class or migration from social class C to B over the past decade.  The country is short-circuiting the communications changes that have evolved in more developed countries by information and advertising being accessed through mobile smart devices from a strong traditional television base, thereby bypassing the switch to PC/laptops seen in North America and Europe 10-15 years ago. The rate of change in Brazil is much greater than for more developed markets and this poses great challenges for enterprises, such as Pernod Ricard whom we also visited in Sao Paolo, to keep pace with these consumer trends and stay in the game.

We had a very interesting meeting with the Brazilian development bank, BNDES, in Rio de Janeiro, where they outlined the major projects being funded across the country, solely or in collaboration with commercial financial institutions.  Their portfolio was extensive and wide covering private enterprise and trade, education, transport and infrastructure and health. They are committed to modernising the country and making it more competitive but have tall hills to climb. I was struck by one of their immediate projects being the arenas for the World Cup and the surrounding infrastructure.  Being in both domestic  international airports in both cities, I couldn’t help feel how underprepared they were for the influx of football fans next year and that it was now too late to really modernise the airports at this stage but they might just have to grit their teeth and hope for the best.


Cathal O'Ceallaigh


– Cathal O’Ceallaigh, FT MBA 2013