Over the last decade, Brazil has grown to become the world's sixth largest economy by nominal GDP, a staggering feat fueled by a massive increase in its middle class ranks.
The nation has been rife for investment opportunity based on its fundamentals and strong commodity sectors, and finds itself as the leading BRIC (Brazil, Russia, India, China) emerging market.
But the recent wave of public protests over the last month could be signaling that Brazil has hit a major snag in its quest to displace France in the top five economies, and its opportunities for growth and fortune may be faltering as the nation experiences increased political turbulence.
The wave of protests began a month ago in Sao Paulo after the government increased bus fares by 10% (a rate that subway fares seem to rise in New York every other week). But the increases were quickly revoked in San Paulo and other major cities after the protests became much larger than about mere bus fares.
Residents have been especially frustrated by a lack of transparency across the country, and the government's increased taxation and decreased returns to average Brazilians in the form of basic and essential services.
Brazil has spent approximately $30 billion to showcase itself to tourists during the 2014 World Cup and 2016 Olympics. Meanwhile, the nation's anti-poverty programs have a mere annual of budget $10 billion in a nation of 191 million.
The widespread demonstrations have produced a national movement to demand better education, healthcare, and transportation services. Despite the protests, the country simply can't meet these obligations at this time for one simple reason: government can't keep up with economic expansion.
Brazil provides one important economic lesson that no one talks about when it comes to rising middle classes in emerging nations.
Many governments are not prepared for population shock or the shock of economic growth.
And while this stands to create a wave of new problems for investors looking abroad for investment opportunities in Brazil, it also teaches a valuable lesson and opens new doors to wealth in South America.