When companies in recent years have discussed internationalization and specifically the potential of various regions of the world, then they typically discussed primarily the so-called BRIC countries – Brazil, Russia, India and China. The topic of internationalization has always played a central role in my professional career. In the 1990s, when I was building up the business in Eastern Europe, Russia, the Middle East and Africa for a large US technology company, during my ten-year stay in Brazil, when setting up global sales for a medium-sized German software company; and more recently, when I was supporting German startup companies to expand their business internationally.
What remains of BRIC?
I have traveled to Russia regularly for several years. China and also Taiwan have been a recurring theme over the last 25 years due to my activities in the semiconductor and software industry. On India I could have a closer look only few years ago. But times have changed dramatically latest since February 2022. Russia has now isolated itself. China is in a dilemma between supporting political systems like Putin’s and keeping up important economic relations, especially with Europe. India has various internal challenges and therefore it is unlikely that the current government takes a clear position in the near future. So what is left of BRIC? The B for Brazil.
Ten years in Brazil
Brazil is connected with ten years of my life, during which I lived and worked over there, founded two companies and met my wife. I would be lying if I said that these ten years were always easy. Some things really drove me crazy sometimes. If you want to read more about that, I recommend to read my book “Jenseits von Samba und Karneval” (in German only). Nevertheless, I did not give up after two or three years like many other so-called “emigrants”, but rather tried to adapt to the local conditions and especially to the local culture. I have always consciously stayed away from the German immigrants’ meetings, where the main discussion was all about how terrible everything is compared to the “perfect” home country. I preferred to get closer to the local people, and over time I understood much better why Brazil is as it is. And in the end I learned to love this country and spent a reasonable part of my life there.
The agony of choice
Since January 2023, Luiz Inácio Lula da Silva, better known as Lula, is president of Brazil – again. He was also president when I came to Brazil in 2006. For someone like me, who wanted to invest in Brazil, Lula was certainly not a disadvantage, because at that time he at least tried to make the country attractive also for small entrepreneurs. The economy wasn’t doing so bad, and compared to later years, you didn’t have to worry too much about public safety either, at least in the region where I lived. Later, Lula was involved in what was probably the country’s biggest corruption scandal and even had to go behind bars. In the presidential election at the end of last year, people often spoke of the choice between plague and cholera, the choice between ex-prisoner Lula and the “Tropical Trump” Bolsonaro. The very close election result demonstrated how divided the population still is today.
The path out of isolation
But even in the first days of Lula’s term in office, it became obvious that, at least in terms of foreign policy, there will be a change of course. While Bolsonaro had isolated himself and his country internationally pretty much, at least from my point of view, Lula is now seeking contact again, especially with Europe and Germany. For sure, his statements about saving the Amazon are only big words for the time being, which of course bring him a lot of attention. But he will be soon judged on that, as well as on all the other promises he has made to the Brazilian people, who really went through tough times in recent years. I am neither a fan of Bolsonaro nor of Lula. But it is important now for Brazil not to isolate itself from the rest of the world like Russia or some other countries with similar regimes.
“Made in Germany” still counts
As mentioned before, there probably won’t be very much left of BRIC if things continue to develop the way they do at the moment. Brazil, however, is still a country with enormous potential. Apart from the richness of raw materials and the large agricultural economy, there is a huge domestic market and, at least in the metropolitan areas, a very well-educated young generation who partly was seeking their fortune in the USA or Europe in recent years. Brazil is a typical Latin American country with a typical Latin American culture, but I know from my own experience that this culture, also because of the many immigrants from Europe, is much closer to us than for example the Chinese or the Indian culture. Moreover, Germany, German companies and German products still enjoy an excellent reputation in Brazil.
Success with local partners
There is a saying that Germany invented bureaucracy and Brazil refined it afterwards. There is certainly some truth in this, which I can prove with countless examples. I was lucky that my wife studied business administration in Brazil and worked for several years with tax consulting and auditor firms, serving many also larger companies as clients. So I had the expert in-house when it came to the interests of my two relatively small companies. As with market entry in many other countries, it is also very important in Brazil to bring professional, reliable and trustworthy local partners on board right from the start. However, you should choose them very conscientiously, because in the beginning I also paid my dues to the wrong partners, who primarily wanted to pull a bit more money out of the pocket of a “gringo” than usual and appropriate. If you know the Portuguese language and the local conditions, you will recognize very fast, which people you can trust and which not. And then, very often this is the beginning of a long and successful partnership.
I am sure that Brazil will become a focus for foreign investments again in the next few years. If you are planning to expand your business to Brazil, I would be happy to assist you. Feel free to contact me.