Rio’s Olympic Reality

When the International Olympic Committee (IOC) awarded the 2016 Summer games to Brazil’s Rio de Janeiro, it left many here in America looking for reasons why.  When viewed through an objective lens, it’s easy to see why Rio would be a wonderful host city, with its beautiful beaches and colorful culture.  In addition, Forbes magazine named Rio the world’s happiest city for 2009.  

At FedEx we’ve had our eye on Brazil as an emerging market of commerce and trade for quite some time.  Brazil is an increasingly favorable area for investment in Latin America.  Its political stability and its economic policies favoring market growth and monetary controls have contained inflation and increased capital inflows.  One area to highlight is its small and medium sized businesses, which represent 98% of Brazil’s 5.5 million companies and have enjoyed 10.5% growth rate over the past five years.  Further, Brazil’s resilient domestic market and diverse international trade portfolio buffered the decline in exports resulting from the global economic crisis.

While the weakening global economic outlook impacted Brazil’s air cargo industry year-over-year volume by 24.7%*, the opportunities for the country are strong.  Brazil has done well to diversify its international trade portfolio. The new foreign investment could stimulate large-scale infrastructure development across the country – the Games will certainly force development in Rio. 

Brazil is planning to invest $11 billion into making the 2016 Olympic Summer games in Rio a success. Using what happened in China to serve as a guide, actual spending would be two to three times that planned amount.  We hope this will help elevate the status of Brazil’s infrastructure which has been a bottleneck for growth for many years, and serve as a catalyst for sizable and sustainable growth in trade. 

Suddenly, it’s clear to see, it’s not just the sounds of beating Samba drums that are making the people of Rio smile.

*Source: Brazil’s National Airlines Association ACMG 8/21/2009