24-26 BRIC feature 30/1/09 18:44 Page 25
Brazil Russia
The Brazilian Government is predicting a growth
RUSSIA IS A VAST
Russia is the most vulnerable of the four Bric
rate of 4%, while experts say it will be nearer countries. Its economy is heavily reliant on the
2%-3% this year. It’s a dip from 2008, when it
COUNTRY AND
hydrocarbon sector, which has been hit hard by
reached 5.4%, but unlike western economies at EXTENSIVE tumbling energy prices.
least it is positive.
DOMESTIC
The ongoing gas war with Ukraine and instability in
Herman Carvalho, minister for tourism, says: “We Georgia have not helped either. In December,
do not have a credit crunch in Brazil. The world
TRAVEL IS A
unemployment reached six million, up one million on
economy is slowing and of course it affects ours but
NECESSITY FOR
the previous year, marking the end of five years of
our conditions are much better than those of most
BUSINESS, NOT
unprecedented prosperity, during which the country
countries. We still have a long way to go on credit.”
A LUXURY
enjoyed average annual GDP growth of 6.9%.
That is one of the key reasons why Brazil’s Predictions that Russia and its oligarchs would
economy is in such good shape compared to the rest escape unscathed by the credit crunch were wide of
of the world: no exposure to sub-prime mortgages, the mark – Chelsea FC owner Roman Abramovich’s
little indebtedness, and an efficient – and prudent fortune is reported to have decreased by $20 billion in
– banking system. one year. Foreign investors fled the country’s stock
The banks also have higher cash reserves ($203 exchange in fear of global recession, leading to a fall so
billion in October 2008) than debts and the culture of sharp politicians ordered the temporary closure of the
Brazil means the population saves rather than buys stock market to prevent further loss. With the exodus
things on credit. of foreign funds, it is not yet clear how this will affect
The main area of the country that has been the Russian economy this year – in 2007 foreign direct
targeted by international corporates is the booming investment made up 4.1% of Russia’s GDP.
north east, according to Felipe Cavalcante, president But despite the slowing economy, business travel in
of the Association for Real Estate and Tourism the region remains relatively buoyant. Galina Barykina,
Development. FCm Travel Russia’s marketing manager, says people
“There has been a real increase in the interest of are still travelling: “Our economy is experiencing a
top quality international companies in the north east slowdown, but it’s not in recession yet. Corporate
during 2008,” he says. “The demand was mainly travel has not been heavily affected because most
coming from investment funds and hotel brands companies based in Moscow, Russian or multinational,
that have never targeted Brazil before.” have branches or run operations in the provinces and
In terms of business air travel, Carvalho admits need to communicate regularly.
there has been a slowdown, but not as acute as to “Russia is a vast country and extensive domestic
North America for example. travel is a necessity for business, not a luxury.”
British Airways has actually increased frequencies But Barykina admits year-on-year volumes are down
to Brazil in its winter schedule, from four a week to by as much as 20%. Booking trends are similar to the
daily to Sao Paulo, and direct flights into Rio three UK, with air travellers downgrading from business
times a week. American Airlines, Delta, TAP and class to economy and rail being substituted for air
Emirates have also put on new services. where possible. TMCs are benefiting from Mice events
The country will get a further boost in visitor as companies are more inclined to stay in Russia.
numbers in May when Brazil hosts the ninth Barykina says expectations for this year depend on
Global Travel & Tourism Summit. oil prices but believes there is reason to be cheerful.
And the International Congress and Convention “Business development has not been curbed as more
Association ranked Brazil eighth worldwide in terms corporate clients keep coming to look for a more
of its importance in hosting international events. reliable travel booker in turbulent times.” L50480
ttgbusiness.com ❖ february/march 2009
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