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Foreigners Follow Money to Booming Brazil, Land of $35 Martini

business in brasil
Daniel Kfouri for The New York Times
Ipanema Beach in Rio de Janeiro. Prices for prime office space in Rio became the highest for any city in the Americas this year.
Published: August 12, 2011

RIO DE JANEIRO — Pondering the financial storms lashing Europe and the United States, Seth Zalkin, a casually dressed American banker, sipped a demitasse and seemed content with his decision to move here in March with his wife and son.

business in brasil
Daniel Kfouri for The New York Times
Michelle Noyes in São Paulo. “I could tell this place was booming,” said Ms. Noyes, a New Yorker who has taken a job in Brazil.
“If the rest of the world is cratering, this is a good place to be,” said Mr. Zalkin, 39.
For those with even the dimmest memories of Brazil’s own debt crisis in the 1980s, the global order has been turned on its head. The American economy may be crawling along, but the economy of Brazil grew at its fastest clip in more than two decades last year and unemployment is at historic lows, part of the nation’s transformation from inflationary basket case into one of Washington’s top creditors.
With compensation rivaling that on Wall Street, so many foreign bankers, hedge fund managers, oil executives, lawyers and engineers have moved here that prices for prime office space surpassed those in New York this year, making Rio the costliest city in the Americas to lease it, according to the real estate company Cushman & Wakefield.
A gold rush mind-set is in full swing, with foreign work permits surging 144 percent in the past five years and Americans leading the pack of educated professionals putting down stakes.
Businessmen have long been drawn to Brazil, along with get-rich-quick confidence men, dreamers of Amazonian grandeur and even outlaws like Ronald Biggs, the Briton who absconded here after his 1963 Great Train Robbery.
But now schools catering to American and other English-speaking families have long waiting lists, apartments can cost $10,000 a month in coveted parts of Rio and many of the newcomers hold Ivy League degrees or job experience at the pillars of the global economy.
Once here, they find a country facing a very different challenge than do the United States and Europe: fears that the economy is getting too hot.
One particular shock for newcomers is the strength of Brazil’s currency, the real. That may help Brazilians snapping up apartments in places like South Beach in Miami, where properties cost about a third of their equivalents in Rio’s exclusive districts. But it also hurts the country’s manufacturers and exporters.
So in a bid to prevent it from going even higher, Brazil is now one of the biggest buyers of United States Treasury securities, becoming a larger stakeholder in the ailing American economy. That is a sharp break from the past, when Washington helped cobble together bailout packages for Brazil’s financial crises.
“Brazil is doing great, but honestly, every other week I ask myself, ‘When is this going to end?’ ” said Mark Bures, 42, an American executive who moved here in 1999, just in time to see an abrupt devaluation of the currency and other sharp swings in Brazil’s fortunes.
A few veteran American expatriates even remember Brazil’s last economic “miracle” in the early 1970s, when The Wall Street Journal quoted an ebullient banker at the start of a front-page article who predicted, “In 10 years, Brazil will be one of the five great powers of the world.” Instead, the country ended up with daunting levels of foreign debt.
The recent commodities boom and growth in domestic consumption, the result of an expanding middle class, helped turn Brazil into a rising power that bounced back handily from the 2008 global financial crisis. The economy grew 7.5 percent last year and is expected to register about 4 percent growth this year — slower, but still enviable in the United States.
Yet Brazil offers many challenges to give newcomers pause. Labor legislation favors hiring Brazilians over foreigners, and the lengthy process of obtaining a work visa can surprise those unaccustomed to Brazil’s gargantuan bureaucracy.
Some economists consider the Brazilian real the world’s most overvalued currency against the dollar and inflation has climbed (as evidenced by $6.16 Big Macs and $35 martinis). Interest rates remain stubbornly high and analysts debate whether a credit bubble is forming as consumers continue a multiyear spree on everything from homes to cars.
Brazil is hardly immune to the turbulence in global markets, and its currency has weakened a bit this month. Rio’s real estate has been bustling as soccer’s World Cup in 2014 and the Olympic Games in 2016 approach, but its infrastructure is inadequate. Violent crime, though falling in some areas, plagues big parts of the country and Rio, which suffered through a traumatic bus hijacking this month.
Still, foreigners are arriving, and work authorizations for them jumped more than 30 percent in 2010 alone, according to the Labor Ministry.
“I had very basic Portuguese, but I could tell this place was booming,” said Michelle Noyes, 29, a New Yorker who organized a hedge fund conference in São Paulo. Shortly after, she made the leap to Brazil for a job at a São Paulo asset management firm.


“I moved from the periphery of the industry to the center,” said Ms. Noyes, citing five other Americans, two from New York and three from Chicago, who are moving to Brazil this month to try their luck.
Americans form the largest group moving here, followed by contingents of Britons and other Europeans. Some are on temporary assignments. Others are starting ventures big and small.
David Neeleman, the American founder of JetBlue Airways, recently created Azul, a low-cost Brazilian airline. Corrado Varoli, an Italian who oversaw Goldman Sachs’ Latin American operations from New York, now runs his own São Paulo boutique investment bank. New Brazilian dot-coms like, an online diaper retailer founded this year by two American cousins fresh out of business schools like Wharton and Harvard’s, sometimes give Brazil a bubbly feel not unlike that of the United States in 1999.
Others foreigners take jobs at Brazilian companies thriving from a boom partly created by Brazil’s trade with China.
“Our salaries here in Brazil are at least 50 percent more than salaries in the U.S. for strategic positions,” said Jacques Sarfatti, country manager for Russell Reynolds, a company that recruits business executives.
Foreigners compete with Brazilians returning home from abroad. “It’s really obvious that the labor market is so bad elsewhere,” said Dara Chapman, 45, a Californian who is a partner in a Rio hedge fund, Polo Capital. She said she was receiving so many résumés from would-be transplants from the United States that they were a “dime a dozen.”
Brazil’s huge deep-sea oil discoveries have also drawn investors and foreigners, including thousands of Filipinos working on ships and offshore oil platforms. For its other industries, Brazil needs an estimated 60,000 new engineers, some of whom must come from abroad, given the country’s lagging educational system.
“I moved from Beijing a year ago and find the potential for professional development incredible,” said Cynthia Yuanxiu Zhang, 27, a Chinese manager at a technology company. “I’m already planning to extend my time here well into this decade.”

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