Brazil’s Emerging Economy and Drinking from the Fire Hose

By: Dan Huber

Tomorrow I leave for Brazil. I will be joining six classmates from the Kelley School of Business Evening MBA program and our professor. Starting Monday at Cummins in São Paulo, we will be meeting with executives, traveling to different locations, and visiting two businesses a day.

I can think of a few notable times in my life when the analogy of trying to drink from a fire hose has been used to describe the situation. I most closely associate drinking from a fire hose with a week I spent in November of 2006, going through new member orientation at the United States House of Representatives beside the newly minted Congressman whose campaign I had spent the previous year and a half of my life working on. We were immersed in this whole new environment of government and bureaucracy with its own rules, traditions, ways of getting things done, and endless amounts of information. There was a great deal to absorb in a very short amount of time. This same experience can occur for people when going to college or starting a new job. Perhaps the most important key to drinking from a fire hose is to try and digest as much information as possible, process it, store it, and grow in your knowledge and experience all in a very short amount of time.

Studying the emerging economy of Brazil has been a “drinking from the fire hose” experience for me. I have always seen the opportunity to visit and experience parts of new cultures as exciting opportunities. When this International opportunity presented itself I was eager to participate.

I have to be honest, two months ago I knew virtually nothing about Brazil. I had heard of Rio de Janeiro and São Paulo. I had seen pictures of the iconic statue of Christ the Redeemer that looks out over Rio and was familiar with its flag. But, that was about it.

I did not know that Brazilians speak Portuguese. São Paulo is one of the largest cities in the world. Brazil has a population of just over 200 million and the seventh largest GDP in the world. For perspective, that puts Brazil just behind only the U.S., China, Japan, Germany, France, and United Kingdom. I did know that most of the Amazon (the river and rainforest, not the online retailer) is in Brazil.

I did not know that Brazil was a Portuguese colony, or that the entire court of Portugal had once fled to Brazil to avoid Napoleon’s invasion in 1807. In 1822, the Empire of Brazil became independent. The country’s government has evolved through several regime changes from a constitutional monarchy and parliamentary system, to a republic, to authoritarian military rule. In the 1980s, Brazil became a federal republic with a government structured very similar to that of the United States.

Fast-forward to today. Like all countries, Brazil has its challenges. The current President, Dilma Rousseff, was re-elected in a runoff this past October. As we prepare to embark on our trip to Brazil, Rousseff faces great unrest and large demonstrations are planned this weekend calling for her impeachment. The unrest relates to issues with Petrobras, a semi-public Brazilian energy company, which has been heavily involved in corruption charges related to Rousseff’s party in parliament. A very important part of the Brazilian economy, Petrobras has been having significant issues accounting for looming holes in their financials which has led to substantial market devaluation. This, in turn, is threatening to throw Brazil into recession.

Anyhow, that is just some of what I have managed to drink from the hose so far. There is much, much more and I have a busy day ahead. But then, that is the nature of drinking from the fire hose.