The “country of soccer” is currently enjoying

a dynamic democracy, although one that is

still being consolidated. Under this system,

the economic agents are heavily dependent

on the public decisions made by the different

levels of government (federal, state and

municipal) and they associate the survival

of their ventures with their respective capacity

to influence (and even take advantage of)

the public policies.



This influence is exercised through explicit

lobbies (even though they are illegal in Brazil)

or political pressures and agreements formed

secretly, which give rise to major corruption

scandals.



The great majority of the projects geared

toward the 2014 World Cup have surpassed

their initial budgets. This is the case of the Brasília Stadium, which with a final cost of R$ 1.5 billion (US$ 750 million) is the world’s most expensive. Its initial budget was R$ 680 million (US$ 340 million).

The large Brazilian entrepreneurs built their companies and their respective markets using a certain type of nebulous alliance with some sort of government sector. It is a rule upon which Brazilian executives base success stories and which make it a situation that should (or at least hypothetically) be taken into consideration by foreign executives when they arrive here and assess the context that influences negotiations with their potential local allies.



Upon the first contact, the foreign executive has the impression that what predominates is a healthy competition between the main players in the Brazilian market. This indeed is what happens in certain cases.
However, all these executives need to do is delve deeper into the negotiations in the main areas of business, such as telecommunications, public works, oil, pharmaceutical industry and infrastructure, to perceive – especially if they have well positioned Brazilian allies – the long-standing ties that these sectors maintain with the government agencies responsible for the markets in which they operate.



Therefore, transparently negotiating with their Brazilian counterparts requires them to dig into the hidden agendas. This is because the discourse is adjusted to international corporate governance standards, those focused on defending shareholder interests and alliances with major financial conglomerates. And in some cases during certain periods, this is the scenario that sustains the businesses.



However, when foreign executives establish long term projects, making the commitment to guarantee returns for their shareholders, it is important for them to realize (similarly, in fact, to what happens in any country around the world) the difficulties encountered to gain access the most complete scenario possible.



In the case of Brazil, most times the behind-the-scenes agreements that guaranteed the Brazilian executive access to the loan from the official banks, for example, will not be included in the reports that he or she will pass on to his or her foreign colleagues during the negotiations established over long lunches and discussions on strategic efficiency.
They will primarily leave out the access to the strategic information that will be confirmed (or not) through the political negotiations underway with the public agencies that have the power to determine the success (or failure) of a project negotiated with a foreign executive.