I caught up with a friend from a U.S. consulate in Brazil this weekend, and as could be expected the topic turned to the vast numbers of Brazilians plying the streets of Miami and New York these days.
My friend is part of an innovative program the State Department launched several years back to increase the number of visa officers in key consular districts across Latin America, beginning in São Paulo and Rio de Janeiro, and now expanding to Bogotá and Mexico City. Their main job is to evaluate and interview B-2 visas, which allow foreigners the ability to come to the US for up to 180 days for non-business activities. The program has slashed visa wait times, which could last months in the past, to days or weeks, giving more opportunities for Latin Americans to cut through the sometimes turgid visa process and to part with their cash.
I wrote on this topic, particularly in light of the immigration reform hot mess, several months ago for the Americas Quarterly blog. To paraphrase the piece, last year, Brazilians overtook Britons as the second largest group of foreign tourists in Florida (number one if you don’t count Canada). They spend more than other foreign tourists, stay longer than American tourists, and often return to the same places. Plus, it’s estimated that for every 65 Brazilian visitors, a new job is created in the state.
Although some are coming to take in cultural treasures like the Met and visit newer cultural icons like Disney World, most come with several empty suitcases in tow and wads of cash for shopping. It’s a familiar sight, from Century 21 bags full of the latest, greatest fashion leftovers to families yelling at each other in Portuguese rolling said suitcases across the selling floors of Macy’s and Bloomingdales. Even the Hasidic owners at B&H on 9th Avenue have translated their website into Portuguese and hired dozens of Brazilians to attend to the tour buses that regularly pull up to their sidewalk. In Florida, never to be outdone by New York in bizarreness, the thieves have caught wise to how much cash Brazilians carry around with them.
One characteristic of Brazil’s growth that has long set it apart from its fellow BRICs is its penchant to spend. Instead of oversaving like the Chinese and Indians do, or falling to immiserizing growth like Russia, Brazilians compete with South Africa for the bottom rung of BRICs savings rates and save less than Venezuelans and Bolivians, not to mention Argentines, Mexicans and Chileans.
So while many decades ago it was de rigeur to be “rich as an Argentine“, these days retailers that hear Portuguese on their floors flock to spendthrift paulistanos and cariocas like moths to the flame. And given how distorted the consumer products market in Brazil, it’s hard to blame them.
This is, after all, a country where the retail price of a Playstation 4 is five times that in the United States and Europe, and Sony had to issue an explanation and detailed breakdown of the reasons behind the astronomical price. (Hint: there are more than $1000 in taxes on a $400 console)
But one thing my friend told me really distressed me. According to her anecdotal evidence, and of she of course couldn’t provide any numbers, many of these Brazilians are on incomes far below those one would expect for these types of trips. Also, many are financing their trips on credit cards with 24 months of payments for the airfare, and many months more of payment for any additional purchases while here.
Since U.S. consular officers often have access to a whole host of financial information about prospective visitors, they see more clearly than U.S. retailers how many Brazilians are blowing their savings and increasingly setting themselves up for years of debt for fleeting trips to expensive destinations.
At the end of the day the U.S. doesn’t pay much mind to Brazilians that choose a week with Mickey Mouse over a healthy savings account. After all, many Americans have made that exact same choice over the past several decades. But Brazilians should be taking note, from the banks that issue this unsustainable credit to the government that will have to clean up after defaults, to families that should be seeing tougher times ahead in Brazil’s growth trajectory.
What’s most likely is that many free-spending Brazilians, particularly at the higher end, know how these cycles begin and end, and want to enjoy the good times while they can. What’s more worrisome is the millions of Brazilians who have spent their savings or indebted themselves for years to achieve the trappings of middle-class life, and will only have photos and memories to show for it.
In the meantime, American airlines, hoteliers and retailers will be rolling in the reais.