Brazil is rising up due to its political stability, big population, size and natural resources. But there is awarning in their structural investments: a high speed growing of the construction sector could kill the goose that lays the golden egg.
Brazil is preparing to host the 2014 World Cup soccer tournament and the 2016 Olympic Games. The country is making a special effort to solve infrastructure challenges. But the consequence of this is an increase of the dependence on the construction sector and rising public debt.
Last December 2012, President Dilma Rousseff launched the "Logistics Investment Program: Airports", a set of measures to improve the quality of airport services and infrastructure, expanding the supply of air transportation to the Brazilian population.
The actions focused on airports form part of the Logistics Investment Program, launched in August for the rail and road sectors and in early December for ports across the country. Airports are the icing on the cake for the "Logistics Investment Program”.
Regional Aviation Plan
To strengthen and expand the network of regional airports, the Federal Government will invest US$3.5 billion in the first stage of the Regional Aviation Plan. 270 regional airports will be included in this first phase.
Logistics Investment Program: Ports
Approximately US$ 26 billion will be invested in new leasing operations and Private Use Terminals, of which US$ 14.9 billion will be invested by 2014/2015 and US$ 11.2 billion by 2016/2017.
Logistics Investment Program: Highways and Railways
Brazil’s national “Logistics Investment Program: Roads and Railways” was launched by the federal government on 15 August 2012 and has planned investments of US$ 65 billion.
A majority of the investment earmarked for the 21 announced concessions will be made in the first five years of the program (US$ 38.5billion).
2014 World Cup stadiums
Last December, The Castelão Stadium was the first to be inaugurated. It has 63,903 seats and received investments in the order of US$248.6 million.
Brazil is building twelve stadiums with a total investment of US$ 3.25 billion.
What will happen after 2016-2017?
Brazil will have millions of specialized workers in the construction sector, but all the big infrastructures will be finished(airports, ports, roads, railways, stadiums). There will remain public debt and unemployment in the sector.
This must be a call for Brazilian institutions since it affects the economic health of the country. They really have to ensure that Brazil achieve sustainable growth which also allows them to look beyond the 2016-2017 horizon.
In my opinion, Brazil must take care of their investments, prioritizing industry and commodity exporting sector.
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