I have been visiting Recife, located in the Northeast corner of Brazil, for over 10 years now, and have been surprised by the recent rapid changes for the better (in terms of economic development). Yes, this region is still economically challenged, but much less so than just a few years ago.
What has happened to make this sudden change:
- Large-scale investment in the Port-region (investments include petro chemical complex, a ship-building company, and others)
- Large-scale government program targeting poverty ("Bolsa Famila" and other programs to encourage education).
- Investments in large-scale cultural events (Carnaval, Sao Joao, and others)
The MIXTURE of programs is important. Number one is the " Bolsa Familia" or direct handouts to the poor. This gave them purchasing power, which then attracted companies to the region (food, consumer products, auto, etc). With large investments in petrochemicals and other heavy industry near the port region, there was both an influx of migrant workers to fill new jobs, and an increased pressure on the real estate market. The result has been a mini-boom in real estate, extra wealth for construction companies, and local residents that owned property.
Shopping malls are more full than ever, and car dealerships are selling more cars than ever. From an educational standpoint, there is more demand than ever for schools, which is attracting entrepreneurs to this space.
If you are looking to find models of development, and for lessons to be learned, then I really suggest taking a closer look at what is happening in emerging markets. This is where you find policy in action, and where you can see the greatest impact from the good mixture of policies and actions that are surely required.