While
a half million international visitors flood into Rio de Janeiro for the 2016
Olympic Games, there’s a growing group of foreigners in Brazil who are
scrambling to get out permanently: expats.
Aurea Imai, a managing partner in Sao Paulo for international
headhunting firm Boyden, said many professionals flocked to Brazil between 2010
and 2013 when they saw growth potential and a demand for high-quality
executives. Now, many of them are leaving – quickly.
“We’ve seen a decrease of almost 40% of expatriates in large
companies,” Imai said, “and resumes from global executives have decreased to
almost zero.”
Spaniard Javier García-Ramos is one of them. When BBC Capital first caught up with him in 2014 he had traded a sluggish
economy in Madrid for a thriving one in Sao Paulo. Now, the investment banker
has returned to Spain and said a number of friends and colleagues also returned
home as the economic outlook soured in Brazil.
Brazil – once a fast-growing member of the so-called BRIC economies,
which also include Russia, India and China – has seen its fortune fade in
recent years. Its currency is weak, inflation is high and the economy has
entered into a deep recession thanks to a corruption scandal involving the
state-controlled oil company Petrobras and a political scandal that finds
President Dilma Rousseff suspended from office pending an impeachment trial.
If anything, the Olympics have only heightened concerns about the
health of the nation, giving disgruntled public workers a platform to express
their anger. In June, a group of protestors made global headlines after they
stood in the arrivals hall at Rio’s Galeao International Airport with banners that
read: Welcome to Hell. The signs claimed, “police and fire-fighters don’t get
paid,” and, “whoever comes to Rio de Janeiro will not be safe”.
Brazil isn’t the only Latin American economy struggling through
upheaval at the moment. Neighbouring Venezuela is facing an economic crisis of
much grander proportions, where for many it isn’t even possible to find
adequate food in the supermarkets to feed a family.
Statistics provided by the Brazilian Ministry of Labour show a 62%
decrease in foreign worker permits granted in the first trimester of 2016,
compared with the same period in 2014, due to both a lack of foreign interest
and fewer available jobs.
Multinational retreat
Several big companies have pulled out of Brazil over the past two years
citing unfavourable conditions for growth. The British-based multinational HSBC
joined Citigroup and Societe Generale last June in becoming the third foreign
bank to abandon or scale back operations in the country in 2015. Barclays
announced similar plans to retreat from Brazil earlier this year.
Unemployment
in Latin America’s largest economy soared to 10.9% in the first quarter of 2016
from 7.9% a year earlier, according to the Brazilian Institute of Geography and
Statistics. Meanwhile average monthly wages fell over that same period from
2,031 Brazilian reals ($620) to 1,966 reals ($600).
When to go?
Are expats in Brazil right to be concerned about instability?
Cynthia Arnson, director of the Latin America programme at the
non-partisan Woodrow Wilson International Center for Scholars in Washington,
DC, believes the situations in Brazil and Venezuela are markedly different.
While there might be ongoing contraction in the Brazilian economy, “the
caretaker government has been doing things that are helping to restore the
confidence of the business community,” Arnson said, noting that the
investigation of corruption “creates stability as opposed to disruption in the
system.”
But that hasn’t kept expats from leaving so far.
That said, the International Monetary Fund predicts the Brazilian economy will
hit rock bottom this year and bounce back with positive growth of 0.5% in 2017.
Imai, of Boyden, also predicts a more upbeat outlook for the coming year. “Our
perspective is that, from the second half of 2017 onward, companies will start
hiring again,” she said.
For now, however, the economy remains too bleak for many
foreign workers. And the Olympic Games may have arrived one year too early for
Brazil to showcase its true potential.
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