Cash-rich Brazil is investing heavily in its information technology and security infrastructures as economic prosperity in key sectors demands greater protection and wider networks.

Current figures suggest the Latin American giant will spend $8.9 billion this year alone, Dublin-based Research and Markets said in its report on Brazil IT for the third quarter of 2010.

Brazil already commands a lead over many Central and South American nations in terms of IT-savvy individuals and businesses. For years, though, the businesses were hamstrung by inadequate cash resources. An upsurge in the country's economic growth, mostly spurred by commodity exports but also supplemented by diverse manufacturing, began to change all that two years ago.

As Brazil began discovering one lucrative hydrocarbon resource after another in deepwater drilling away from its coastline, fear of terrorism and a hunger for political prestige drove President Luiz Inacio Lula da Silva to start investing billions into defense regeneration.

Most of the military manufacturing programs moribund since Brazil's dictatorship days in the 1970s are back on track. Developments in the sector demand an extensive and sophisticated approach to expanding the IT infrastructure across the board.

The World Economic Forum ranks Brazil 53rd globally in the area of preparedness for IT, placing the country fourth in the region behind Chile, Barbados and Mexico. The government expects to have 37 million elementary school children -- in a population of 192 million -- to have access to broadband by 2010.

The government wants this boosted to 90 million broadband connections by 2014, reaching half of Brazilian homes. The plan could prove a boon for Brazil's computer market, as most broadband infrastructure is currently concentrated in major cities and towns, Research and Markets said.

The report said this year's Brazilian spending indicated a recovery after last year's slow growth.

Infrastructure investments following the award of the 2016 Olympic Games to Rio de Janeiro are also driving new spending on IT systems and solutions.

Brazilian PC market leader Positivo Informatica is leading multinational rivals like HP, Dell and Acer. Positivo has been the sales leader in Brazil for the last 22 quarters and reported a 31.8 percent year-on-year rise in revenues in the first quarter of 2010.

The Brazilian IT services market is competitive with multinationals such as IBM, HP, Accenture and Indian vendors Infosys and Tata Consultancy Services competing with local players like Politec, CPM Braxis and Stefanini.

Analysts said the government wants to encourage expansion of the IT sector as part of its plan to transform Brazil into a major outsourcing destination. Currently the country is disadvantaged against, for example, India because of its lower English-language knowledge base. But Brazil is fast catching up in the number of people who are bilingual in English and Portuguese or are trilingual with the addition of Spanish.