Brazil needs transport investment to boost economy

Speaking at the Brazil Supply Chain and Logistics Summit in Sao Paulo, Prof John Manners-Bell, Ti’s Chief Executive, outlined some of the challenges facing the country’s transport and logistics infrastructure.

At a side meeting of the conference attended by a range of senior supply chain executives, he said that amidst the criticism levelled at the development of the country’s ports, airports, railways and roads, it would be easy to forget how far Brazil had developed over the past decade in terms of its economy.

However according to metrics such as the World Bank’s Logistics Performance Index, the country has fallen precipitously in the rankings from 41 in the world in 2010 to 65 today and neighbours Chile and Argentina are now ranked higher.

Of the transport infrastructure projects planned to facilitate the World Cup and Olympics, it is estimated that half of the projects have been abandoned. These projects are essential to reducing the proportion of GDP which is spent on logistics, presently between 15-18% – far higher than in developed countries.

At the same time, only 1.5% of GDP is invested in transport infrastructure compared to a global average of 3.8%. A key reason for the lack of investment is the level of bureaucracy associated with planning.

As Prof Manners-Bell said at the event, ‘Brazil must learn the lessons provided by China, which is after all Brazil’s largest trading partner. The Chinese government understood that improving its connectedness with the rest of the world was critical to its long term economic development. The Brazilian economy badly needs a shot in the arm to cope with the forecast downturn and investing in transport would be a key way in which it could boost its prospects.’

Manners-Bell concluded, ‘The private sector needs to be involved in these investments, but for more partnerships to develop the Brazilian government has to create an attractive environment free from corruption and political intervention.’

About ‘Latin America Transport and Logistics 2015

Ti’s latest report provides research and analysis into Latin America’s key industries along with country and top logistics profiles. New to this report is a comparative analysis of leading logistics providers. In addition, the report includes Ti’s market sizing of the region’s contract logistics, e-commerce, express/small parcel and freight forwarding sectors.

To find out more about the report please contact Michael Clover.