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. This dissertation will enhance your knowledge about the impact on investment by outside world causing by these events which Brazil is going to have and various business opportunity Brazil posses. Brazil should not let this opportunity go in vain
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Dissertation
on
Economic impact and investing opportunities
of the two
upcoming mega events in Brazil –
2014 FIFA World Cup
and
2016 Olympic Games
Submitted by:-
Tanvi Singh
MBA- II Sem
IBS Hyderabad
ICFAI Univeristy
ACKNOWLEDGEMENTS
I would take this opportunity to express my gratitude to my advisor Mrs. Manjusha
Shrivastava without her unending guidance, support and patience this thesis would not have
been possible. She was always there with her valuable inputs and advice that gave me a
clearer understanding of the subject matter and how to go about the thesis in the first place.
I would also thank my mother Mrs. Manjusha Shrivastava
for having made all the sacrifices so that I could reach this stage. And for having there with
all the possible supports so that I could stretch myself beyond the boundaries to pursue the
educational opportunities.
Table of Content
Sr No. Topic Pg No.
1 Executive Summary 4
2 Introduction 5
3 Research Methodology 6
4 Impacts on investments 7
5 Business opportunity 8
6 Bibliography 9
Executive Summary
A great opportunity has knocked the door of Brazil. Brazil is hosting 2014 FIFA World Cup and 2016
Summer Olympics. This dissertation will enhance your knowledge about the impact on investment by
outside world causing by these events which Brazil is going to have and various business opportunity Brazil
posses. Brazil should not let this opportunity go in vain. More and more investment activity is being taking
place in Brazil. Now Brazil should make use of this opportunity by improving its various sector like
infrastructure, tourism, telecom etc.
These report will raise the curtain on the investment which is taking place in
Brazil. Big changes have been taking place in he country.
DISSERTATION
INTRODUCTION
Mega Sport event – Jam Packed stadium, billboards, laughing, screaming people. People chanting the
name of their player and teams and what if the event is ‘FIFA World Cup 2014’ and “2016 Summer
Olympics” . World’s Eye will be on Brazil because this is the country which is hosting both the events this
time. Hosting these two events is a very big opportunity for The Brazilian economy, which is the
world's sixth largest by nominal GDP and the seventh largest by purchasing power parity . Brazil is one of
the world's fastest growing major economies.
A stable economy, a burgeoning domestic market and huge
untapped reserves of natural resources have led foreign investors to become increasingly interested
in Brazil as an investment destination. $ 22.46 billion has been spent by Brazil on the World Cup to
ensure an adequate infrastructure and organization; the tournament will bring an additional $112.79 billion
to the Brazilian economy, with indirect and induced effects being produced thereafter. In total, an additional
$ 142.39 billion will flow in the country from 2010 to 2014, generating 3.63 million jobs/year and $ 63.48
billion of income for the population. Some of the largest impact of this investment inflow will be felt in the
host cities, with targeted infrastructure initiatives that will add up to total investments of $14.54 billion. In
Natal, Recife and Salvador new stadiums will be built. Stadiums in the other host cities will be renovated for
purposes of adapting to the requirements. Some of the stadiums will be used for the Olympic Games to be
held in Rio De Janeiro in 2016.
Research Methodology
There are two types of research data types:-
Primary-They are the new data collected through surveys and by filling questionnaire directly through the customers.
Secondary- These data are already available data which have been collected by third party. Example Government data reports, etc.
Source of Data in this report
In this report data which have been used is Secondary data which are already available and which is prepared by “Ernst & Young”.
Impact on Investments by Different countires
After the declaration of hosting World cup and Olympics, Investment by other countries has been increased
tremendously. Also country’s large and growing domestic market is appealing because it offers investors the
chance to diversify their portfolios, spread their risks and potentially realize higher yields than in their home
markets. Among the many investment opportunities in Brazil, investors are particularly interested in real
estate—so much that Brazil is attracting much of the foreign investment in commercial real estate in Latin
America.
From the report of Ernst & Young
Brazil is one of the preferred places to invest globally, according to a recent Bloomberg survey, for a
number of reasons:
Brazil emerged from the recent global recession relatively unscathed and managed to maintain its
investment-grade rating.
It has brought its inflation under control and has launched smarter budgets.
It has maintained a healthy banking system.
It has a stable political climate.
Inward investment into Brazil by projects, value and jobs created
Rank CountryFDI Projects Change
2011 vs. 2010
(US $million
2011)creation 2011
2010 2011Share in FDI 2011
1 United States 104 149 29.4% 43.3% 12,358 35,195
2United
Kingdom20 45 8.9% 125.0% 12,248 21,040
3 Spain 36 37 7.3% 2.8% 4,483 7,660
4 Germany 33 36 7.1% 9.1% 3,045 8,678
5 Japan 23 36 7.1% 56.5% 4,954 14,069
6 France 18 26 5.1% 44.4% 4,899 13,704
7 Switzerland 12 19 3.7% 58.3% 330 1,729
8 China 10 17 3.4% 70.0% 4,487 9,049
9 Italy 6 15 3.0% 150.0% 1,832 7,215
10 Canada 11 13 2.6% 18.2% 1,002 1,479
11 Others 93 114 22.5% 22.6% 13,278 41,348
Total 366 507 100% 38.5% 62,916 161,166
Opportunities for Brazil
Brazil have a great opportunity to make other sector by which nation earn pride, honour and income.
Following are the various field which are expected to grow :-
Tourism
Several projects are being developed for Brazil to be able to cater to approximately 600,000 tourists who should come to the country to attend the event. After 64 years, the largest competition between football teams on the planet will take place in the country once again. And the eyes of the entire world are going to be turned to Brazil.
Construction and electricity industries
These industries will mostly benefit in the periods leading up to the events, whereas the tourist-related industries will see most gains during the actual events.
T elecommunication sector
Telecom sector along with IT and transportation will surely benefit from job creation and higher demand from international visitors.
Infrastructure investments
Infrastructure in Brazil will be a driving force for economic growth in the longer term. The country will take quite a few steps towards modernization, become more efficient and lure increased foreign investment. With improved roads, railways and marinas the country will increase its efficiency, making it more attractive to do business with and some of its core export products iron ore, soybeans and coffee might benefit with increased demand from overseas.
Furthermore, hosting a successful World Cup and Olympics will be a catalyst in the country’s image-building going forward. In the end, the reputation gain is likely to be higher than the actual financial gains of the two sport events!
Bibliography:-
https://britishbusinessclub.innovateuk.org/rio-2016
http://en.wikipedia.org/wiki/2014_FIFA_World_Cup
http://www.ey.com/GL/en/Newsroom/News-releases/News_Brazil-an-investment-success-story
http://www.ey.com/GL/en/Issues/Business-environment/2012-attractiveness-survey---Brazil---Capturing-
the-momentum#
Survey Report and statistics have been taken from Ernst & Young