Amazon Prime?

‘Brazil is the fifth largest country in the world in area, encompassing some 3.2 million square miles. It ranks fifth in the world by size of population, having 210 million people within its borders. Brazil by area is almost half of South America and has borders with every other South American country except Ecuador to the far west and Chile to the far south.

Rainforests cover almost two thirds of Brazil, accounting for approximately a third of the world’s rainforests. These are crucial to the health of the planet, not least of because of their role in the absorption of carbon dioxide and production of oxygen. Unfortunately, Brazil’s protection of the Amazon rainforest has been poor, with an estimated 20 per cent of the rain forest cleared. Ironically, some of the clearances have been done to create huge cattle ranches thereby removing oxygen production and carbon dioxide removal and replacing it with methane production.

Brazil is multi-cultural and ethnically diverse. Portuguese is its official language and it was declared independent of Portugal nearly 200 years ago. With GDP around $2 trillion, Brazil is the eighth largest economy in the world. On per capita basis however, the country ranks just 71st according to the World Bank. The country’s economy and its economic performance do not bear scrutiny without understanding that it would be fair to call Brazil the most corrupt significant economy in the world.

Brazil’s economic growth slowed five years ago and in 2014, the country entered a recession. This coincided with a corruption probe that uncovered corruption at the highest levels of the government and the country’s largest corporations. It implicated the current president, Michel Temer, former presidents and many, many, officials and senators, which led to prison sentences, mass layoffs and billions of dollars in fines. The corruption probe was called Operation Carwash and was supported by millions of Brazil’s citizens who demonstrated their backing for the probe.

The Brazil Public Prosecutor’s office estimated that, by October, more than 200 convictions had resulted from Operation Carwash, including convictions for corruption, drug trafficking and money laundering. More than a dozen corporations including the state oil company, Petrobras, and the huge construction company, Odebrecht, were involved, and the chief executives of both companies were jailed.

Carwash also implicated the former president of Columbia, Juan Manual Santos, the President of Venezuela, Nicolas Maduro, and the former President of Peru, Pedro Pablo Kucznski.

A follow up operation to Carwash, Operation Weak Flesh, was launched in March 2017 involving the sale of contaminated beef and poultry products. This involved the largest exporters of these products in the world and has resulted in suspension of meat imports from Brazil by the USA, European Union, China, Japan, among others.

The two brothers at the head of one of the companies involved, Wesley and Joesley Batista, gave evidence that led to the probe into Brazil’s president and a fine for the company’s controlling shareholder of $3.16 billion. Its executives admitted bribing some 1,829 politicians. The Batista brothers were arrested in September on charges of insider trading and contempt.

It is possible that Brazil’s economic problems predated Carwash, but the impact of the operation cannot be under estimated. The country fell into recession in 2014, which accelerated in a downward spiral in early 2015 and slowed in the following year. By the first quarter of 2017 Brazil had its first growth in two years. However, after details of the president’s involvement were released in May 2017, the country’s currency, the real, fell eight per cent.

By mid-2018, the corruption scandal wiped an estimated $250 billion from the market value of Petrobras. All of this casts a shadow over doing business with Brazil, including import or exports of sporting guns. That said, in 2005, most of Brazil’s population voted against banning the sale of guns and ammunition to civilians in a referendum.

Despite this, the Brazilian Department of Justice has been forbidding almost every citizen from buying guns and this has led to a de facto disarmament. A new right-wing president has been elected: Jair Messias Bolsonara. He will take office next year and he has promised to overturn the disarming of citizens, which has been blamed for evident increases in gun crime and violence. He hopes to see Brazil through a recovery from the worst recession in its history and unemployment, which has reached 12 million people.

He is an evangelical, ex-military officer with forthright views, who should be favourable to the gun trade. Brazil has massive natural resources and a past record of significant inward investment, which are all positives for this economy. Potentially, it has a large market for guns. In the past the market been difficult to reach for many British companies, hampered by the company Taurus, a dominant domestic manufacturer of many forms of sporting and personal protection firearms and sometime exporter of cheap guns to the UK.

Brazil is ranked by the OECD as a country that is difficult with which to trade. However, with a new broom, violence on the increase and one in three people apparently in favour of a military government, it may represent a burgeoning export market for shotguns and sporting shooting and, once again, a country that can supply competitively. Surely things cannot get any worse, so an upward trend could be profitably exploited if one is aware of the potential for a volatile exchange rate and the difficulty in finding a trustworthy partner in Brazil. ‘

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