Business Meal

Similar as in Europe it is more common to have a business lunch than a business dinner. Brazilians attach great significance to socializing. Accordingly business lunches are important and you should reserve enough time, when being invited. Participating in a workshop it is not as common as in the USA, UK, Germany or Switzerland to have a sandwich lunch. Even though schedule is tight you would rather go for a real meal. When you are inviting make sure to invite your business contacts to a top restaurant. It helps to earn respect.

Punctuality

It is depending a bid on where you are in Brazil. In Sao Paulo people are mostly very business minded. So far I never had to wait when having a business meeting /business lunch. In general it depends a bid on the importance of the business lunch for your business contact and on your status. If importance and your status is high brazilian business people will be punctual. Concerning this topic it is also important to understand what is meant by certain sayings. “to indo” means basically “I am going/coming”. For a Brazilian that means he is thinking about leaving his office. It is easily possible, that half an hour later he is still there. What you want to hear is “to chegando” I am arriving. There you can expect him about 10 minutes later.

Table Manners

Table Manners are very important. Manners in Brazil are generally a bid more polished than in Central Europe. Where in Europe for certain meals it maybe ok to use your hands, Brazilians use rather fork and knife. There are many other small differences. For example salad leaves you should not cut with your knife. So the best is to observe your contacts and do it the same way.

Topics of Conversation

During the main course you only should make small talk. The perfect small talk is soccer. About soccer you can have a conversation with almost every Brazilian from doorman to top executive. Be aware though, that the European soccer league is not well known in Brazil. Cristiano Ronaldo is rather known as a good looking model, than a great soccer player. Its a good idea to build up know-how about the brazilian league. It could happen that your business contacts will ask you, which brazilian team you are supporting. Telling him that you have no clou about brazilian soccer doesn't really help your case. Avoid topics such as politics, economic problems, poverty, corruption etc. Although Brazilians like to criticize their politicians, you shouldn't. You should not talk about to personal topics either. About business subjects you only should talk at the end of your lunch. Do not push it. Rather plan for a second or third business lunch to go more into detail.

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Brazil – After The Dive, Dancing Samba Again?

Some bullets from the Presentation “Brazil – After the Dive, dancing Samba again?” by Eric Blattmann, Bank Vontobel and Daniel Bittner Arsago Group.....and my comments

ATRACTIVE DEMOGRAPHY

• 55% of population is below 29 years
  My comment: in order to support Brazils's growth it is mandatory that these people are well educated. I feel with education Brazil is still lacking behind. Public grade schools are significantly of worse quality than private schools. Public universities are very good. Since they are good everyone coming from private schools wants to go to such a university. Therefore it is very hard get in for people with the education level of a public grade school. 
  
  
• Working population is growing
  
  
• Unemployment rate is decreasing from 13% to 7.5 in 2010 and 6% in 2011
  
  
• Permanent increase of minimal salary (38% in-between 2003 and 2008)
  My comment: Calculated in percentage it sounds a lot. In absolute terms with the minimum salary around $400, 38% is not really so much. It is also to be considered that prices rose significantly more. As of today in Sao Paulo lunch in an average restaurant costs with $20 about half of what it costs in Switzerland. Looking at this and at other prices it is doubtful, that people earning the minimum salary, have at the end of the day more money in their pocket than in earlier years.
  
  
  
  
  SHIFT IN SOCIAL CLASSES
  
  
• Middle class is increasing
  
  
• Shift of the lower income class to the middle class (middle class 2003: 43%, 2009:54%)
  My comment: Talking to brazilian middle class people I do not feel that they are much wealthier than before although the income is higher. A statement I hear often is that the more they earn, the more taxes they have to pay, which doesn't leave them with more than they had with the lower salary.
  
  
  
  
  LENDING IS INCREASING
  
  
• Real interest rate decreased from over 20% in 2003 to 6 – 7 % as of today
  
  
• Bank intermediation rate (interest rate margin) dropped from 50% below 30%
  My comment: First of all, in the past with the level of interest rates plus the high margin (spread in-between the banks refinancing rate and the rate clients have to pay for loans) it was not very attractive to apply for a loan. Second of all the banks were very conservative and it was very difficult to get a loan at all. 
  
  
• Loans in the private sector increased from 22% to 45% of GDP
  
  
• Corporate loans increased from 8.5% to 15.5% of GDP
  
  
  
  
  SOLID BANKING SECTOR
  
  
• Credit markets are growing
  
  
• Core capital ratio of brazilian banks is at 16.9% (11% required)
  Note: as of this weeks EURO/Greece rescue summit european banks are required to have a core capital ratio of 9%. Many of them are not there yet.
  My comment: Compared to american an european banks brazilian banks are very conservative. One of the main reason is, that members of the general board (e.g. Itaú and Bradesco) will be liable with their own fortune in case of bankruptcy
  
  
  
  
  BRAZIL'S DEPENDENCY ON OTHER ECONOMIES IS LIMITED
  
  
• Only 12% of produced goods are exported
  
  
• Main investments have been coming from brazilian investors
  
  
• Since Brazil is rich of commodities and the industry sector has been growing, dependency on imports is limited.

MY CONCLUSION
• Information I have been getting from “real” people is not fully matching with the information I have been reading in statistics. They are certainly not fully wrong, but these statistics are not fully right either. 
  
  
• Basically there is a big potential. In order to benefit from this potential the first key factor is improvement in education. The second key factor is a higher efficiency of the apparatus of state. I would like to quote a brazil friend “Maybe this time Brazil will make it, since the economy is generating more money than the government / the functionaries can absorb”
  
  
• Brazilians are the most positive people I ever met. They are very pragmatic and are able to think out of the box. Also these will be important factors for future growth.
  
  
  So of course I remain positive for Brasil, above all looking at the problems we are facing in Europe and the US.
  
  
  VAMOS  O  BRASIL!!!
  
  
  For investment products for Brazil please check
  www.vontobel.com/en/
  www.arsagolatinfinance.com
  
  

Getting around in São Paulo 1-BY BUS (to be continued...)

Basically getting around in Sao Paulo is a bid frustrating. There is heavy traffic from around 7 to 10 AM and from 5 to 8 PM. Unfortunately outside these periods there is still traffic. Much better it is during weekends, public holidays, school holidays and of course very late at night and early in the morning. Of course on foot is ok too. Though wearing a suit traveling on foot is most of the time and for most of the places not the greatest idea.

BY  BUS

Busses are all over the place. You almost get everywhere you want to and sometimes also somewhere you do not want to. That means you easily can pick the wrong bus, which might take you to a not so friendly area. So if you are not fully certain make sure to ask the guy selling the tickets in the bus if that bus is really going to the right destination. You also can ask that guy to tell you when to step out. No worries, he will shout through the whole bus. You will hear him wherever you stand. The challenge will be that the ticket guy doesn't speak english, but Brazilians are very very helpful. If you right down your final destination you won't have misunderstandings and it will work out. It is also quite a challenge to get somewhere on time. Busses pass by with a rather high frequency, but sometimes there are some bigger breaks in-between. Once I waited for u bus for ½ hour and when he showed up, he did not stop because the bus was already packed. Also make very sure to recognize well in advance when your bus is about to approach and give a clear sign that you want him to stop. Bus drivers generally only stop if there is someone who wants to board. The best way to get around with busses is to check on google maps (route planning). All the busses are indicated including bus numbers. Note this number, street and street number. Go to the bus stop as shown on google maps, check at the bus stop if the bus number you need is listed. When you get closer to your final destination, make sure you know which street you are in by reading the road sign. Then follow the street numbers and press the button to stop when you get close to your number. Street names and street numbers /house numbers are very easy to read (much better than in Switzerland). It all might sound a bid complicated and challenging but the good news is, after gaining a bid of experience I find it quite fun to travel by bus and with a bid of gut feeling I even manage to get where I want on time.

P.S: reading in the bus is ok, but do not try to write. No chance at all. It is bumpy like hell;-)

to be continued...

Next Business Trip coming up

Date for my next business trip to Brazil was set. I will be arriving in Sao Paulo 12th November 2011 and will stay for one month. Mainly I will stay around Sao Paulo and of course I will visit my friends in Ubatuba. I am looking forward to meet my old business contacts and meet a lot of new great people.