Biofuels Biofuels Bring Brazil’s Future Within Its Grasp

Author / Editor: Jonathan Wheatley / Dominik Stephan

Petrobras. Vale. Embraer. – With company names that ring a bell across the globe, Brasil is the economic powerhouse of Latin America. Now the country with its tremendous wealth in biodiversity and agriculture aims for a leading role in biofuels. Perhaps for the first time ever, the country truly holds its future within its grasp.

Bio-Fuels is one of Brazils' big growth industries.
Bio-Fuels is one of Brazils' big growth industries.
(Picture: Alfa Laval)

Brazil, it has often been said, is the country of the future – and always will be. The tired old joke, based on an ill-informed perception that the country is inherently incapable of realizing its enormous potential, is wearing decidedly thin. Last year, after shaking off a shallow recession caused by the global economic crisis of 2008–2009, Brazil’s economy grew by about 7.5 percent, leaving the developed world in the dust, and the country looks on course to settle into a sustainable growth rate of about 5 percent a year, more than double its average for much of the past two decades. Brazil really is the country of the future, it seems. And its future has – almost – arrived.

Almost, because Brazil still has much to do. The foundations of stability and growth were laid by the inflationbusting Real Plan of 1994. Its architects drew up a blueprint for prosperity that included structural reforms – especially deep cuts to a bloated public sector – that have yet to be completed.

With Stability Comes Development – Development Brings Prosperity

But stability alone has allowed the Brazilian people and Brazilian business to plan for the future in a way they never could under high inflation. While savings and investment remain low, Brazil has embarked on a virtuous circle in which rising employment and incomes have delivered a boom in domestic consumption, creating more jobs and higher wages and even more consumption. With the United States and Europe facing stagnation, Brazil is on a roll. Brazil’s trade balance with the US, for example, has gone from annual surpluses of about USD 15 billion in Brazil’s favour to a deficit of about USD 6 billion last year, as Brazilian consumers buy goods that those in developed countries are increasingly having to go without.

A Major Exporter of Minerals, Agriculture Products and Biofuels

Can Brazil take up the slack in the global economy as the developed world slows? That may be asking a lot. But many economists believe its economy, currently the world’s eighth biggest, will be its fifth biggest by as early as 2015.