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News Stories · Economics

Yes, there is a future for Brazil

8 IMD MBAs give an inside look at the situation in Brazil
January 2016

At this moment in time there may be few on the planet who would consider 2016 ‘the year’ for Brazil. However, at IMD, it is ‘the year’ of Brazil.

In an MBA that prides itself on leadership and international diversity, there are rarely more than two participants that join the program from any one nationality. But this year, almost 10% of the class, 8 participants in total, are from Brazil.

The Economist recently questioned whether Brazil’s economy is now ‘irredeemable,’ Not so long ago, in 2009 the magazine put the country on the cover with ‘Brazil takes off.’ What’s changed and what is the outlook for the economy?

Giving first-hand insight on the situation in Brazil, these 8 new MBAs shared their perspectives on the country. As a group, they are very diverse, coming from Sao Paulo, Rio de Janeiro, Belo Horizonte, and Salvador, and in terms of business experience, they represent several different industries including finance, healthcare, mining, oil & gas, consumer goods and technology. Yet despite the diversity, their opinions, on the country, are relatively similar.

A political fiasco

All of them put politics on the top of the radar when doling out reasons for Brazil’s current economic situation. In fact, in the most recent election, all of them were unanimously against President Dilma Rousseff and the Workers’ Party (PT) behind her, which came to power in 2002 with Ex-President Lula de Silva.

While the situation is complex, the simplified version they tell amasses to government leaders taking power for the sake of having power, neglecting the good of the country. Such is their critique of a subsidy program that brought an artificial and unsustainable new level of wealth for an estimated 40 million Brazilians living in poverty. A program that in their eyes amounts to buying votes.

“Unlike in many countries, in Brazil, voting is obligatory. The situation is now one where the vote is being skewed because uninformed people – those looking for instant gratification and hand-outs from poor PT policies – are without an education that allows them see a bigger picture,” said Silvia Simoes.

And even when things were looking up, Brazil’s rise was somewhat artificial spinning from PT policy. “While it was of course great to see Brazilians given a boost and lifestyles lifted, it has had serious consequences on the economy. For starters, when the program began, everything got a boost as consumer spending went up. But now that funds have dried up, that ‘growth,’ which was unnatural is tanking and we find ourselves in a recession,” said Lucas Seoane.

And for the business environment this hits twice. Not only is the money gone to boost consumer spending, but there are few resources left for lending to companies. And all of this hurts moral.

“In the current situation, morality is gone and that affects the mood of the country. As the top leaders do wrong, everyone else is following their example and we don’t want to,” said Renato Gonzaga.

The way forward

For Renato and many of the others, the better way forward would have been with the PSDB, the Brazilian Social Democratic Party.

“But as soon as we say that, we will be labelled ‘the privileged’ ones,” said Silvia. “This an old school way of doing politics that is tearing our country apart, creating tensions between segments of the population and even friends. It shouldn’t be about that, it should be about making our country better for everyone and that’s not at all what government is doing.”

But perhaps not all is gloom and doom. The country appears to be on a tipping scale as government and corruption are slowly being challenged.

“The bright side of the crisis is that this is a great opportunity for change,” said Leandro Veiga. “The fact that important people have been arrested shows there will be change in government and business and I have to believe that this situation is going to make our future leaders more accountable and more attentive.”

“It’s not because we don’t see the solution that one doesn’t exist,” Renato added.

“We also have to remember that Brazil was hit with a double bang, as the Oil & Gas industry suffered worldwide, so did Petrobras, our nation’s largest company,” said Gustavo Zanini. “Markets will adjust and with time the sector will rebound bringing some wealth back to the country.”

Why an IMD MBA now?

“One of the reasons many of us went abroad for an MBA was to get out of the crisis. Rousseff’s re-election was a turning point. We thought people would vote for change but it was a big disillusion. We are fed up with the political mess and law suits plaguing our government and business,” said Renato.

But coming to IMD, given the situation, hasn’t been the easiest decision. As the country’s economy has been hit hard, so has its currency. And this makes anything abroad more expensive. But that seemed a small price to pay for the larger benefit of knowledge and an IMD degree.

“I was not so surprised to see so many others from Brazil. When a country is in crisis, it is the best moment to do training. The opportunity for growth in many companies back home isn’t there right now, so this is a good way to keep moving forward,” said Lucas.

While all the new MBAs hope things will get better, they all agree no one can predict the future, no matter which country you come from.

“An international MBA allows you to work anywhere around the globe,” said Silvia. “It is an insurance in case you ever do decide to leave your country.”

Giving back to the country

In coming to IMD, some of these bright Brazilian minds also hope to bring something valuable back to Brazil.

For Felipe Berg, his MBA journey is one that he hopes will give him a larger perspective of how things are done internationally. This along with the values of leadership given in the program, he hopes will give an edge in serving business back home.

Likewise, Mateus Machado is planning to leverage IMD’s international network to make a bridge between Brazil and the rest of the world. “While I think the situation in Brazil may get worse before it gets better, eventually government will be forced to find a way to advance. The impeachment process may accelerate or detain progression depending on how it advances,” he said.

As the situation in Brazil shows, it may be necessary to improve ourselves and our greater understanding before we can improve general welfare. Mateus comes to IMD as much, if not more, for personal development than he does for professional reasons. The two he says are connected.

Advice to the outside world

While the group is mostly pessimistic in the short term, in the long term they say there is a light at the end of the tunnel. And Brazil should get back on the international market for business.

But there are some things that outsiders should know about Brazil. For starters, as Thales Nunes said, there is no such thing as a one-size fits all label.

“Never qualify Brazil as a whole. The country has a ton of different mind-sets, geographic regions and population segments,” he said. “Likewise we can’t put a label on Brazilian workers, everyone is different.”

Yet at the same time, like with every nation, there a few stereotypes that the group says may hold true. For starters, don’t expect a Brazilian to follow the schedule. And yes, most of the time they will take things personally. Relationships matter a lot in Brazil, so nurture those first and the rest will follow.

IMD thanks Felipe Berg, Renato Gonzaga, Mateus Machando, Thales Nunes, Lucas Seoane, Silvia Simoes, Leandro Veiga and Gustavo Zanini for participating in this article. Good luck and have a great year!  

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