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Welcome To Brazil: The Effect Of Immigration On The Country's Economy

Monday, 12 January 2015

With immigration on (or near) the top of everyone’s minds in the U.S. lately, I thought it would be helpful to take a look at immigration’s effect on Brazil. A continuous inflow of highly qualified immigrants is a key factor in any country’s development. By attracting and retaining talent, an economy benefits from new entrepreneurs and the businesses and jobs they create. Brazil is beginning to reap the benefits of a recent inflow of highly skilled professional immigrants, and is looking for new ways to maintain that growth and attract even more successful foreigners.

Taking a look back at immigration in Brazil at the end of the 19th century, the country experienced a strong surge which would eventually become a turning point in the country’s evolution from a low-level industrialized society to a developed one. Brazil was able to tap into consolidated industrialization in Europe, where manpower from rural areas flooded into cities unable to absorb them. Brazil was waiting with open arms and took in millions of immigrants from countries such as Italy, Portugal, Spain and Germany.

This migratory wave enabled Brazil to not only diversify agriculture and end its dependence on coffee, but also boosted the urbanization and industrialization that significantly enhanced economic growth. The immigrants settled in the larger cities, which lead to economic progress in the state of São Paulo and laid the foundation for major industries in the south of Brazil that were critical for development.

However, after 1939, Brazil once again underwent change and many skilled and unskilled Brazilians sought a better life elsewhere. A series of economic crises in the region had greatly diminished employment opportunities and the quality of life, which gave rise to the saying that “Brazil exported its talents, eliminated its poor and retained its mediocre people.” Due to significant moves to reduce inequality beginning in 2002, the situation reversed once more in the country’s favor. Large numbers of skilled or qualified foreigners have come back to Brazil seeking employment and better living standards once again.

In fact, during the last six years, temporary immigrant numbers have risen 135% overall and more than 200% for those holding masters’ degrees or doctorates. While most of the immigrants coming to the country are now highly qualified, reflecting a shortage of qualified manpower in certain specialized sectors, such as oil and gas, technological innovation, and construction and energy.  The bulk of these professional immigrants are coming from countries such as the United States, Philippines, India, Germany, Italy and France. Those wishing to stay in Brazil for longer periods are coming from Portugal, Spain, France, and China. These highly qualified professionals have come to Brazil under employment contracts; and the businesses that are bringing them in are increasingly looking for foreign executives to lead the way.

The question arises, what exactly do these qualified workers expect to find in Brazil? A study titled, “Qualified Foreigners: The Changing Face of Immigration in Brazil” by Gilda Momo from São Paulo’s PUC University, found that these immigrants originally sought an opportunity for professional growth in their home country; however, they view the opportunity to work in Brazil as a way to gain experience in “a complex and diverse market.” This is seen as an essential step on the way to reaching their final objective of returning home with international experience in an emerging market with the challenges and scale of Brazil. They believe it gives them a better view of the world that will be extremely valuable as they climb the corporate ladder.

Most of those coming to Brazil on a temporary basis are living in two of Brazil’s largest cities, Rio de Janeiro and São Paulo (35% and 45%, respectively). For these professionals, the main advantages of coming to work in Brazil are its large market, higher salaries and a general hospitable attitude throughout the country. On the downside, the cost of living is high, there’s a lot of government bureaucracy, and ever changing labor and employment legislation. Overall, Brazil is considered a unique place to live with enormous opportunity and a structure that allows foreigners to live well, despite latent problems such as crime and low standards of urban mobility.The bad news for Brazil is that despite the recent growth of immigrants, they are still only 0.3% of the total population, which is insignificant compared to other developed countries like the United States (14.51%), Singapore (42.9%) or Switzerland (28.9%). The importance of immigration policy for economic development is well documented. A recent estimate found that close to 25% of Silicon Valley companies have been founded by immigrants and those companies are generating approximately $17 billion in sales and employing about 52,000 people.

During Brazil’s recent fiercely contested presidential election campaign, there was little discussion of immigration policy. In fact, Brazil has no concrete strategy or public policy currently in place for attracting and retaining these highly qualified immigrant professionals.

As the country continues to seek economic expansion, Brazilian officials will need to develop robust immigration policies to continue to bring top talent to the country. But, the fact remains that Brazil is becoming an attractive place for skilled immigrants to live and work; and it is a mutually beneficially relationship for both foreigners and the country.

Forbes Magazine

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