Brazil

Rio’s Vitality Sets Pace

Investment soars in trade and development projects as Brazil’s capital prepares for 2016 Olympics and a surge in tourism.

Rio de Janeiro is spearheading Brazil’s strong economic growth, which is expected to top 7% this year.

Two of the city’s international flagships, Petrobras, the world’s fourth-largest oil producer by market value, and Vale, the world’s biggest iron-ore mining company, are in the process of massive expansions.

Petrobras is raising capital to finance an ambitious $224 billion investment plan to access vast deepwater oil fields.

Vale is adding to its numerous mining assets by expanding into the production of crop fertilizers. The company plans to spend $12 billion over the next three years on new projects and acquisitions in this globally strategic sector in response to an increasing worldwide demand for agricultural crops.

Between them, Petrobras and Vale account for more than 15% of Brazil’s exports. Vale, whose exports total $10.143 billion so far this year, has become the country’s top international trader, overtaking Petrobras, whose exports total $10.139 billion.

The two companies symbolize Rio’s economic vitality. Although the city’s international image is dominated by its scenic beauty and glamorous tourist resorts, Rio’s port facilities have helped ensure that it continues to be Brazil’s second largest manufacturing center.

The city is also home to clusters of high-tech companies, including the largest conglomeration of media and communications companies in Latin America.

As it quickly moves ahead with preparations for the 2016 Summer Olympics, the city is experiencing a vast regeneration. A $5 billion investment program will extend the subway system, improve railroads and construct new highways.

“Rio is experiencing an unprecedented moment, marked by economic and urban development and driven by a unique international agenda,” says Marcelo Haddad, executive director of Rio Negócios, the city’s investment promotion agency. Projects already under way include a major revitalization of the port area and extensive refurbishment of tourism facilities.

Its role as the 2016 Summer Olympics host city has enhanced the city’s prestige, and tourist numbers are already rising. Sugar Loaf Mountain and the beaches of Ipanema and Copacabana may be popular attractions, but President Lula da Silva has designated Rio’s shantytowns, known as favelas, as potential tourists spots for an authentic Brazilian experience.