Subject Line: The Need for Higher Education in Brazil
This memo is divided into four sections. With the first three sections being informative regarding the current economic and educational landscape in Brazil and the opportunities for market penetration. The final section is unfortunately constrained given that Laureate is a private company, but we have included a cost analysis created by our analysts.
Section I: Introduction
Rough Roads Ahead for Brazil:
The prosperity of Brazil in the recent years has created a flourishing middle class. For an extended amount of time, Brazil was experiencing growth well above 4% (Graph 1) . However expectations of bad grades ahead (modest GDP growth) coupled with high inflation have significantly cut growth expectations. So no matter how much effort is put into reverting inflation back to normal levels, it is unreasonable to expect the government to reduce its expenditures, tax exemptions and other subsidies for education sector any time soon. Since investing more and establishing new infrastructures is timely and costly, a government with clear budget constraints won’t be able to provide much flexibility to the educational system. Providing this economical flexibility for the educational system would be like cutting to the bone when what this country really needs is its muscles and brains right now. For a country struggling to emerge from its status as a middle income country, the lack of flexibility and tremendous need for education looks to be on two different ends of the table. The question then becomes how is education going to improve if the government’s priorities are more short term than long term? Concurrent with the emergence of a strong middle class, the need for quality ...
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