In terms of gross domestic product, Brazil has the sixth largest economy in the world, one spot ahead of the United Kingdom. Brazil has a nominal GDP of $2.517 trillion. The annual G.D.P growth rate of Brazil as of 2011 estimates is 2.7%. The per capita G.D.P of the country in 2011 was $12,916. A C.P.I inflation of the country in 2011 was estimated to be around 5.24%. 8.5% of the population is below the poverty line. 5.7% of the Brazilian labor force is unemployed.
The costs of living in Brazil are very high. These costs of living are not commensurate with the average wages of the workers which are very low. However, in many developing countries, the standards of living are equally high. For instance, the costs of living in Brazil are almost as high as those in Australia. This could be proof that the country is on the right path to development and to become an industrialized nation in a short while. This period, as estimate by minister of finance for Brazil Guido Mantega, could be anywhere from ten to twenty years.
Part of the reason as to why the Brazilian economy will grow much faster than many other countries is because Brazil is a developing country, still. The economic crisis that struck in 2007 mainly affected advanced economies such as those of the United States, Japan and Germany. Even though all countries were affected by this, the developed (industrialized) countries were affected more than the developing countries. Despite this, the country’s social economy still needs to be improved. Mr. Mantega pointed out that the country needed to improve on such things as employment and also improve the wage rate of Brazil.
The distribution of wealth in a country is an important indicator of the economic development levels of a country. Brazil has the highest pay in the world. The highest paid executives in Brazil earn an average salary of $600,000 per month. The minimum salary (wage) for Brazilians was recently increased from US $ 335 per month for the year 2012. However, over the same period, the population of Brazil has greatly increased. For instance, in Rio de Janeiro’s favelas, the population increased by 27.7% while for the rest of the city, this population grew only by 3.4%. This indicates an ever widening gap between the city’s haves and have nots.
The Bolsa Familia gives financial aid to over 45 million Brazilians. The amount of money that a family receives from this program usually varies depending on a family’s average income, the number of children in the family and the age of those children.
Poverty in Brazil can mostly be seen in the favelas, i.e. the slums. These slums are most common in the urban and metropolitan areas of the country such as Sao Paulo and Rio de Janeiro. However, they can also be found in the rural areas as well, although to a much smaller extent. In 2003, President Luis Inacio Lula da Silva initiated a hunger eradication problem called the ‘Fome Zero’ . The Bolsa Familia is a program that is under the Fome Zero. The program gives money directly to families. This program was widely successful. It reduced poverty by up to 19.8% between 2002 to 2006.
Poverty in Brazil can mainly be attributed to the economic inequality in the country. According to the Gini coefficient, Brazil is one of the world’s most unequal countries. The extremely poor, people living on less than a dollar a day, are 13% of the population. Should Brazil maintain the same level of poverty reduction, by the year 2016, Brazil may achieve social indicators that are the same as those of developed countries.
In terms of gender inequality, Brazil is placed at number 80 out of 146 countries. However, in recent years, laws have been made to make sure that there is fairer treatment of both men and women and that people of both sexes enjoy the same rights. Popular opinion among Brazilians holds that women should be free to choose their own husbands with the family having little say in the choice that a woman makes. In 2003, a new Civil Code was introduced which ensured that a child’s father and mother both have equal rights as far as child custody is determined in a court of law. The rights when it comes to inheritance of property are the same for both sons and daughters. However, despite this, many people in rural areas show some discrimination towards women as far as inheritance is concerned. There are laws against sexual harassment in public places as well as the workplace. However, efforts to counter this are set back by the women themselves. This is because many women fail to come forward to complain about such cases when they occur.
The ‘Maria de Penha’ law was passed in the year 2006. This law was the first to clearly define domestic violence in Brazil. The sentence for domestic violence was also tripled under this new legislation. A four year campaign with a budget of $ 1 billion was launched in the same year aimed at dealing with domestic violence in Brazil.
The crime rates in Brazil are very high as compared to other nations with which it is on the same development level. Official statistics show that for every 100,000 people there are 23.8 homicides. Other forms of crime such as muggings, kidnappings and rape are commonplace. The National Public Security Forces (FNSP) was established in June 2004 to deal with the rising crime rates in the country.
Global warming is an important factor to be put under consideration for any country that is on the path of development. This is due to the impact that industrial factories have on the country. As a country grows economically, it will have to increase it production capacity. This increase in productivity by a country can be achieved through the establishment of factories. These factories are usually put up to produce various goods and services. Whenever these factories are fully established and start being operational, there is a lot of smoke that they produce. This smoke usually contributes to the carbon print of not only the country but the world in general.
A country therefore has to put the issue of global warming among the top items on its agenda. There are numerous effects of global warming such as flooding of coastal areas due to the melting of polar ice caps; an increase in the cases of skin cancer and numerous other concerns such as climate change. To show the extent to which this is important, China recently refused to sign a pact that would put a cap on its industrial emissions. The reason it gave for refusal to sign the pact is that the other countries, such as the United States, Germany, France, Britain and Canada have all had their share of industrial emission on their path to economic development. Therefore, China was in fact, asking to be allowed to continue the carbon emission in order to achieve the levels of industrial development of other countries.
Brazil, being a country that is heavily dependent on agriculture, has lately been greatly affected by global warming. One of the greatest fears of global warming on the economy is that it is said that it will reduce grain production by up to 50% over the next century. It is expected that there will also be a decrease in land for cultivation over the same period. It is for these reasons that Brazil needs to be greatly concerned about global warming. A drought in Amazonia, the region in which the Amazon river flows, in 2005 led to a decrease in the amount of rainfall in Brazil. Another common effect of global warming is countries experiencing climate change. This means that there are irregular weather patterns and certain areas that do not experience some weather patterns or elements, start experiencing them.
This was seen in Brazil around the same time that the drought in the Amazonia struck. Even though Brazil is a country in which hurricanes are not a common occurrence, in 2004, there were strong hurricanes (including Hurricane Katrina) in Brazil that led to the destruction of a lot of crops. The highest temperature ever recorded in Brazil was recorded in this period in the year 2005. In the northern town of Bom Jesus, a temperature of 44.6 degree Celsius was recorded. (This is an equivalent of 113 degrees Fahrenheit.)
These changes have greatly affected crop production in the country. Soy production in 2008 dropped by over 10% as compared to the year 2005. This is because the climate in the region during this period was very dry. This did not only affect the crops themselves. The soy is also used for feeding domestic animals as it serves as a base for most of their foods. It is also used as a raw material for fuel and a form of bio-diesel. Therefore, the decrease in the production of soy has led to a decrease in the productivity of domestic animals (especially pigs and birds) and the amount of fuel used by numerous poor families.
Compared to other countries, Brazil has weathered the storms of the world financial crisis fairly well. The country felt the impact of the crisis the most at the end of the year 2008 and industries all over the country were affected. However, in the second quarter of the year 2009, the economy began to show signs of improvement. In the year 2008, G.D.P fell by as much as 2.9%. However, in the first quarter of the year 2009, the G.D.P fell by only 2.9%. The economy continued to grow from this point onwards. Two factors have been important in ensuring that the economy in Brazil withstands the financial crisis. These factors are – a very cautious monetary policy and an institutional framework that is very strong. These factors have led to a decrease in the rate of inflation in the country.
Another factor that has made Brazil withstand the effects of the world financial crisis is that in the year 2006, Brazil was experiencing rapid growth and production. Most companies in many sectors of the economy were financially strong and in an idle capacity. There were also numerous short term liability consumers and the level of consumer debt in Brazil was much lower than in many countries. Compared to places like the United States and Europe, the levels of housing mortgage in Brazil were very low. In December 2008, mortgage loans accounted for only 2.8% of the G.D.P. Ever since the Brazilian banking crisis of the 1990s, the Central Bank of Brazil had put in place stringent measures to see to it that a similar thing does not happen again.
One of the factors that affects the economic development of many countries is corruption. Corruption among government officials has a lot of negative effects on the overall productivity of the economy. Through corruption, under-qualified people are given key government positions, some of which have a direct link with the country’s economic policies. Economic also sees that government development projects and tenders (such as those meant for the servicing of roads and other social amenities) are given to companies that have quoted high prices yet have very poor quality work. Also, corruption leads to improper and poor collection of taxes by the exchequer and even the little that is collected in terms of taxes goes into the pockets of private citizens for use that is not for public amenities and projects.
There have been numerous corruption scandals in Brazil over the past several years. For instance, there is an ongoing investigation that the head of the Brazilian mint was taking bribes from the suppliers of the institution. The man, Mr. Luiz Felipe Denucci Martins, was accused of transferring over $25 million, money he received as kickbacks from individuals, into offshore banks in the Virgin Islands in order to avoid detection by the authorities. In terms of corruption, Brazil is ranked number 69 out of 178 by Transparency International. Corruption in Brazil is said to trace back to the days of Brazil under colonial administration by the Portuguese. It is said that many Portuguese officials knew that being posted on assignment to Brazil meant an opportunity for numerous illegal financial gains.
President Janio Quadros was removed from power in a military coup because he failed to rid the country of corruption as he had said he would. The military rule that had supplanted president Quadros in 1964 also failed in its efforts to eradicate corruption. One of the biggest corruption scandals in Brazil came to be known as the mensalao (big monthly payment scandal). Investigative journalists revealed that President Luis Inacio Lula da Silva’s advisors had been receiving bribes from parastatals.
Crime in many countries usually has a direct link to economic productivity of a country. High levels of crime imply an increase in the country’s productivity. However, these very crime rates see to it that the economic progress stalls or decreases altogether. For instance, many developing countries rely on tourism for their economic growth. These countries need the millions of tourists who flock into the country’s hotels to earn the country foreign exchange. However, if there is an increase in the levels of crime in the country, tourists are going to shun the country for other safer countries. This will mean that the country loses millions of dollars in foreign exchange, thus having a negative impact on the country’s economy altogether.
Crime is rife in Brazil. Many people have dubbed Brasilia ‘The Capital of Crime’. The high rates of homicide in Brazil have been directly linked to drug trafficking. Many foreign companies are concerned about personal security and increasing crime levels. High rates of crime, ransoms and kidnappings are commonplace in Brazil. Even though the government has acted to reduce crime rates in Sao Paulo and Rio de Janeiro, this crime has spread into other smaller cities on the outskirts of these cities. On the major roads of Brazil, law enforcement is very poor and cases of thieves stealing cargo from moving cars and trucks are not uncommon.
References:
Baer, W. (2001) The Brazilian Economy: Growth and Development. New Jersey: Greenwood Publishing Group.
Brainard, L. (2009) Brazil as an Economic Superpower? Understanding Brazil’s Changing Role in the Global Economy. Cambridge: Brookings Institution Press.
Chaffee, W. (1998) Desenvolvimento: Politics and Economy in Brazil. New York: Lynn Riener Publishers.
Huggins, M. (1985) From Slavery to Vagrancy in Brazil: Crime and Social Control in the Third World. Chapel Hill: Rutgers University Press.
Kent, S. (1996) Restructuring Patriarchy: The Modernization of Gender Inequality in Brazil, 1914-1940. New York: UNC Publishers.