Fears over violence in Brazil

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Brazil enters the new decade in relatively buoyant mood, especially in light of the impressive economic performance under president Luiz Ináício Lula da Silva over recent years.

Nevertheless, a growing regional power on a still sometimes troubled continent, it faces a myriad of policy challenges. For foreign investors there remain several issues, not least the high barriers of entry for foreigners. These take the form of conflicting regulatory frameworks across different states, high taxes, and local companies aided by state subsidies. Some of Brazil's largest and most successful businesses remain firmly in state hands. From an internal security viewpoint, one of the major problems the country faces, and an intractable one at that, is gang violence. Brazil will be forced to address this issue over the coming years, particularly in the run–up to high–profile events such as the FIFA World Cup in 2014 and the 2016 Olympic Games in Rio de Janeiro. Rio, in particular, is home to favelas, dominated by notorious gangs, and often the location of drug–related violence and killings. Brazil has traditionally experienced little or no insurgent or paramilitary activity on its territory, especially when compared to the scale of those problems in neighbouring Colombia and Peru. However the Latin American curse of the regional drug trade continues to present problems and significantly increases security risk weightings. Business Monitor International, in its Brazil Defence and Security Report Q2 2010, expects the outlook for the Brazilian economy to be bright, although it will be influenced by the presidential election race in October 2010. Nevertheless, the economy appears set for robust recovery in 2010. That said, economic policy may become increasingly politically charged, with loose fiscal policy likely to remain in place for longer than needed. For further details on the Brazil Defence and Security Report Q2 2010 visit: http://www. companiesandmarkets. com/r. ashx? id=XD058G60W269148&prk=1357e95c9693d958d6f17dc3d669dbad

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