Is Brazil About to Become a Food and Energy Superpower?

As the world faces crucial geopolitical and economic shifts, two trends seen as long-term important topics are already coming to discussion as subjects of the global future, these are: the growing demand for food and the transition to sustainable energy.

The reasons are crystal clear. On one hand, the global population continues to grow every year at least 0,86%, especially in regions with the highest birth rates such as Asia and Africa, and with it, the need for reliable food sources. On the other hand, simultaneously, the race for clean energy is intensifying, as an outcome of climate change, electric vehicles, AI infrastructure demands, and even protectionist trade policies.

In this context, Brazil finds itself in advantage of moving through a course to an unique and prosperous position.

Why Brazil Matters?

The South American nation holds all the natural and geographic conditions to achieve sustainable growth in this new era.

First of all, Brazil holds a vast coastline, from the north of South America to the south, and a large land with diversified geography. Additionally, the country cited is located in a tropical region with a high degree of solar hours per year and very strong winds, mainly in the Northeast region of the country, which is ideal for renewable energy. The country also holds fertile soil and abundant water reservations, having one of the biggest rivers in the world, perfect for agriculture. Brazil is rich in natural resources including rare minerals which are crucial for green technology. The nation already makes use of these natural advantages by owning the status as one of the world’s largest producers of both food and energy.

Moreover, it is essential to affirm that leading companies in both sectors already target Brazil as a strategic production hub. From advanced and sustainable farming development to renewable energy investments, Brazil slowly becomes a key part of global supply chains in two of the most promising and vital sectors of our society. As a proof of high potential in these industries, Brazilian agribusiness exports reached USD 166.5 billion in 2023, accounting for 49% of total exports. Also, Brazil achieved 93.1% of power generation from renewable sources in 2023. Such a fact highlights the aim of Brazil to be both a energy leader and a top petroleum producer, creating a challenging transition, according to the Petrobras CEO, Magda Chambriard.

But Here’s the Problem…

Despite the vast advantages previously mentioned, Brazil’s progress to achieve such promising status suffers a major setback as internal challenges erupt among the political landscape. The poor governance and mismanagement of resources held by public institutions are seen as one of the oldest and most serious issues in Brazil, among experts. Such aspects come with the lack of strategic planning to better serve the national interests. Additionally, the state-owned enterprises -such as Petrobras- disturbed by sequential political interference and corruption scandals, reflect to international investors the magnitude of such internal challenges.

Brazil also faces a global diplomatic dilemma which its current position is considered by many analysts underneath to its potential. Such a negative reputation damages Brazil’s future business outcomes. Together with the weak political and economic institutions that restrict pluralism and transparency - scoring 36/100 on the corruption perceptions index (Transparency, 2023)-, the current national scenario frightens possible foreign investors from operating in the country reinforcing the deep-rooted corruption system (The Guardian, 2024). Brazil’s serious socio-political issues including inequality, high crime rates and institutional fragility are held as the main negative aspects which set back the country from high levels of development and growth, especially in sectors where the South American nation owns great potential and promising prospects.

All in all, Brazil holds a unique opportunity to emerge as a key global player in two industries that shape the 21st century’s economic growth: energy and food. No other country owns such a natural privileged position, geographically and in terms of resources, to respond to the demands.

However, while geography and resources are destiny in potential, without serious structural reforms, institutional maturity, and long-term vision, Brazil risks missing out on its moment.

The question which remains: Will Brazil rise to meet the opportunity? Or will it continue to waste a privileged global position gifted by nature, but threatened by politics?