Brazil, Betting on Innovation and Investment in Technology.

             2013 will be an important year for Brazil. Since taking office in January 2011, President Dilma Rousseff has seen economic growth contract by almost 5% during her first year and dwindle to around 1% in 2012. High business costs and taxes, indebted consumers, low levels of trade, a tight labor market and devaluation of the Brazilian real have combined to create the “Brazil cost,” pushing prices of Brazilian goods higher than those produced by the country’s Latin American neighbors. Rousseff wants to turn Brazil’s fortunes around, and her economic mission is to push GDP to 4% in 2013.To achieve her goal, investment will need to rise by 25% to match the investment-to-GDP ratio acheived by neighbors like Chile and Peru, all of which grew more than 4% last year. With an economy worth $2.5 trillion, the country brought in over $65 billion in foreign direct investment in 2012. Innovation is widely seen as key to Brazil’s potential success, harnessing the nation’s creativity to shift its commodity-based past into a competitive and technology-driven future. Last August, the president unveiled plans to spend $66 billion on infrastructure over the next 25 years, with more than half invested in the next five to get the country moving. Significant cuts in interest rates will help fuel credit, and tight fiscal policy has kept public debt and deficits under control. The upcoming 2014 FIFA World Cup Brazil and the 2016 Olympic Summer Games in Rio de Janeiro, the nation’s art and culture capital, have prompted a regeneration boom in the city. The Rio Negócios Web portal, created by Hélio Viana, president of World Sport Business and Júlio Bueno, Secretary of Economic Development, is an online marketplace set up to ensure that homegrown businesses supply global events and earn a share of the spending.Due to a 250% increase in social spending on key areas like health and education during the last 15 years, 40 million people escaped poverty in Brazil during the last decade. Recent reductions in power prices, coupled with record-low unemployment, are giving businesses and consumers renewed cause for optimism. If Rousseff’s policies pay off in 2013, this promises to be an ano maravilhoso or “wonderful year” for Brazil.