A renowned economist recently said that the year 2021 was almost over in Brazil. Although we are still in April, the delay in the vaccination chronogram to fight coronavirus and the growing political and economic crises in the largest country in South America are putting more and more investors and companies on hold.

A few days later, I watched a virtual presentation by the CEO of a German company in which he showed that every crisis creates opportunities. And he was in a hurry. He reported the advance of competitors in emerging countries and the need to increase investments in start-ups currently creating new technologies for the post-Covid world.

I also read an interview, in the “Wall Street Journal”, with a hedge fund manager from the United States who stated the interest in investing in assets in Brazil, Chile, Mexico, South Africa and Russia. According to him, the devaluation of local currencies against the dollar made companies cheaper, generating growth opportunities with more appealing margins.

If on the one hand caution and pessimism are there in some bank reports, the real economy, in turn, is moving fast. Mergers and acquisitions have increased since last year, ignoring the Covid-19 crisis. They have an eye on key sectors to enable growth in the coming years. And right in the middle of this strategy are start-ups, companies in a growth stage that have technology as the core of their business.

Distrito, one of the main innovation platforms in Brazil, projects investments of at least US $ 5 billion in start-ups this year in Brazil. The figure is 42% higher than the US $ 3.5 billion calculated last year. International investors are interested in new solutions for sectors such as finance, online retail, healthcare and logistics.

In 2020, mergers and acquisitions involving start-ups and large corporations totalled 174 operations. In 2021, this figure is due to reach 250 operations, data from the District point out. Combinations of business and investment should transform part of these start-ups into unicorns, thus reaching a value of at least US $ 1 billion. There is potential for Brazil to jump from the current number of 12 to 20 unicorns. It may seem a small number given the size of the Brazilian economy, but it will be quite an achievement, considering that this figure has the potential to almost double in twelve months alone.

But the real economy is not just start-ups. Infrastructure projects are also on the radar of institutional investors worldwide. The list of initiatives the government intends to privatize throughout 2021 includes concessions for highway, railways, airports, port terminals and sanitation companies. It’s a package with more than 50 options that should generate investments of US $ 24 billion.

Given the uncertainties as regards the direction of the economy, investors have been putting pressure on the government to make events more appealing and to put more flexible rules in place. This strategy appears to be working. In the telecommunications sector, companies such as the Brazilian Oi, the Italian TIM, the Spanish Vivo and the Mexican Claro complained and managed to get the Chinese Huawei on board as the supplier of infrastructure equipment for the 5G network at a time of blockade in several countries around the world.

As the 5G auction is expected to take place in the middle of this year and cost around the US $ 6 billion, which includes the purchase of frequencies and mandatory coverage investments in the inner areas of the country, companies keep exerting pressure behind the scenes for further reduction of requirements.

Negotiating is part of the competition, even more so in the current scenario. Rio de Janeiro, for example, will host one of the largest privatisations in the country, with the sale of the public water and sewage company. The amount involved? About US $ 7 billion, a preliminary number that includes the payment of the grant and mandatory investments. Investors are now trying to reduce that amount claiming, as it was expected, that it is “unpayable”.

And there’s more. In the second half of March, the Brazilian Congress finally approved the new regulatory framework for the gas market, an initiative that will allow generating more competition in the sector by breaking the monopoly of state-owned Petrobras. The next project in line is the establishment of new rules to modernize and attract more investments in the navigation system between national ports.

The year 2021 is just beginning.