Economy of Brazil
Developing Natural Resources
Brazil is a country that could be a world power because of all its plentiful resources. Poor organization and leadership and inefficient methods have led to large debts. Brazil’s Amazon rain forest is called the “World’s Medicine Cabinet” because of all the plants that can only be found in Brazil. They have only studied and found out about 10% of the plants in the rain forest. Many scientists feel that the cure for aids will be found in the Amazon if the plants aren’t destroyed by deforestation and pollution. Brazil’s land is also rich with a wide selection of gold, minerals and semi-precious stones. In order to get these things, though; they must cut down large sections of the rain forest. Poor leadership and organization have contributed to many of these resources being wasted and destroyed.
History of the Economy
Brazil’s economy has a lot of potential for growth. Brazil however, is struggling because of poor management in the past. Brazil’s first big industry was sugarcane.Then they had a brief gold and diamond boom. In the late 18thcentury, Brazil started growing coffee. It is still a very important industry today. Brazil had a very powerful rubber industry in the 1800s. In 1888, the rubber boom was at full speed and Manaus was the center of all the action. The coffee barons gained control of Brazil which ensured the rich became richer. Fortunately, this ended after only a short time. This and other industries have used slavery in the past. Later in the early 90's Brazil was trying to industrialize, but the country had insufficient funds. They got a large loan from the World Bank. Then, their industries lost power and Brazil was left with a large debt. Brazil is still struggling with that debt today.But now,Luis Inacio da Silva,Lula did good things for the country. The best of them was not to let the PT lead his government. Lula managed to stop them. But what about Dilma? When Lula took office, Brazil was still taking early steps on the road to becoming a solid economy.But things changed almost the moment Lula took office. Fears of a turn towards socialism subsided as he announced not just his first social programme in favour of the country's poor, Zero Hunger, but also a tough fiscal stance which tightened the strict economic principles of his predecessor.After that, Lula's Brazil rode a strong wave in the global economy. He attracted investment and strengthened the real. And he accumulated foreign currency reserves, which now stand at 270 billion dollars, an amount that far outweighs the country's foreign debt of 235 billion dollars.From Lula's second year in office, Brazil had again found the path of economic growth. Growth stayed at around 3.5 per cent per year on average until last year,when the South American Giant faced some stagnation from the global economic downturn.The government's countercyclical measures, including tax cuts on products like cars and the provision of cheap public loans to keep up economic activity, meant Brazil was among the first countries to get over the crisis. Impressive growth above 7 per cent is expected this year.Credit expansion for consumers and minimum-wage increases above the annual rate of inflation, together with financial aid for some 48 million poor through the social programme Bolsa Familia (Family Grant), gave rise to a new legion of consumers, which experts estimate at 29 million people in the populaton of nearly 200 million. They boosted demand at home, making up for lagging export demand.While challenges remain, Brazil's outlook is very good as a new president prepares to take office. International studies point out that Brazil will be the world's fifth-largest economy by 2014, up from its current position of eighth.Lula's is definitely a hard act to follow, whoever his successor.Rousseff has stressed that she aspires to improve health, education and security so that in the future 'the whole of Brazil is made up of a strong consumer middle class.' Serra, in turn, promises to fight corruption and to ensure a more efficient use of state resources for the benefit of the people.Lula's economic and social successes have also put Brazil in a privileged situation in the international political sphere.The south American Giantt is among the leaders of the Group of 20(G20),that brings together industrial and emerging economies. It was a top source of policy suggestions to overcome the recent global crisis, and it remains a key player in the Doha Round of talks at the World Trade Organization (WTO).It remains to be seen whether Brazil's next president can rise beyond the title of 'Lula's successor' and make a name for him or herself in the global stage.
