In the wake of a crippling economic recession and a slow and uncertain recovery, many of Brazil's most wealthy citizens are leaving the country. In 2017, two thousand millionaires left Brazil, marking the third consecutive year that Brazil ranked among the top ten countries for loss of high net worth individuals (HNWIs). About half of those who left the country last year came from the city of São Paulo.
China, India, Turkey, the U.K., France and Russia ranked ahead of Brazil for loss of HNWIs. The Global Wealth Migration Review reports on wealth migration patterns and has concluded that the migration of wealth is actually a better measure of a country's economic state than GDP numbers. The reasoning is that, "if a country is losing a large number of HNWIs to migration, it is probably due to serious problems in that country (i.e. crime, lack of business opportunities, religious tensions, etc.)." Earlier this month, Brazil's economists reduced financial growth forecasts from an already dismal 1.49 percent to 1.47 percent.
Brazil recently experienced its worst recession in nearly a century, which spanned a devastating two-year period from 2014 to 2016. The recovery has been very slow, with the economy gaining little traction. For example, in March of 2017, the unemployment rate was at 13.7 percent. During this same time period, the country was reeling from political uncertainty after the impeachment of President Dilma Rousseff. Furthermore, the subsequent Lava Jato investigations sent hundreds of the country's most powerful politicians and businessmen to prison for corruption. Many of Brazil's largest businesses, principal among them being Petrobras, declared bankruptcy or endured similar financial turmoil.
Against this scenario, violent crime in Brazil has risen drastically with the homicide rate reaching a record high of 62,500 murders in 2016. The upcoming election has divided the country into supporters of the Worker's Party (the party of impeached ex-President Dilma Rousseff and imprisoned ex-President Lula) and conservative candidate Jair Bolsonaro. Bolsonaro's rhetoric has led to chilling comparisons with Philippine President Rodrigo Duterte, creating a tense scenario nationwide that has already shown signs of erupting into pre-election violence. Neither candidate promises a strong economic plan that would be attractive to Brazil's top earners.
As the country's millionaires flee before the elections, it seems few believe that the next few years will bring about much improvement in Brazil's economic and social woes. Yet here is to hoping that at least some positive changes are on the horizon.
