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Behind Brazil's Shrinking Billionaires Club

Behind Brazil's Shrinking Billionaires Club

Posted by Juan Gavasa on December 30, 2014

It wasn’t long ago when Brazil was making headlines for being in the middle of a social and economic transformation that was finally paving the way for the South American nation to leave its longtime status of “country of the future” behind at the same time it minted new millionaires and billionaires like never before.

Now the situation is quite different with the Brazilian economy in peril and its promising future still a distant dream. Recent setbacks include a credit boom that has resulted in low and middle-class Brazilians in more need of cash than ever, a weakening currency and corruption scandals within the boundaries of Brazil’s main state-controlled firms — including oil behemoth Petrobras — and a gorged government that keeps getting bigger.

Another consequence of the latest Brazilian mess is that the country’s billionaires club shrank for the first time since 2008 and after reaching a record number of 65 individuals in last March’s FORBES World’s Billionaires list.

Eleven Brazilians have lost their billionaire status since then, while two have passed away (Moise Safra and Antonio Ermirio de Moraes). There are now 52 Brazilians left with a net worth of $1 billion or more each, and even though FORBES is in the process of updating its billionaires database for our new issue to be released early next year, it is unlikely that any new names from Brazil will join the ten-digit club in 2015. If anything, more Brazilian billionaires are facing the possibility of being left out of the list as well.

Even those who have been added to the ranking after the list was released in March, including education entrepreneur Jose Janguie Bezerra Diniz, banking heir Maria Angela Aguiar Bellizia and four members of the Maggi family, owners of one of Brazil’s largest agricultural conglomerates, have seen their fortunes drop below $1 billion more recently.

The main reason for the wiping out of Brazilian billionaires is the strong devaluation of the Brazilian real this year, with the currency falling to a 9-year low as investors keep growing suspicious of the huge budget deficit of the federal government and its inability to tackle the situation.

Brazil’s battling industry, which should close this year with deflation of 1.5%, is also to blame for the dissipation of billionaire fortunes in the country. Collectively, and excluding the net worths of the Brazilian billionaires who died this year, the total wealth of the Brazilian billionaires is down from $186.3 billion in March to the current $158.7 billion.

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