Brazil is a member of diverse economic organizations, such as Mercosur, SACN, G8+5, G-20 and the Cairns Group. Its trade partners number in the hundreds, with 74% of exports mostly of manufactured or semimanufactured goods. Brazil's main trade partners are: the EEC (26% of trade), Mercosur and Latin America (25%), the United States (15.8%), and Asia (15%), Others (19.2%).
The owner of a sophisticated technological sector, Brazil develops projects that range from submarines to aircraft and is involved in space research: the country possesses a satellite launching center and was the only country in the Southern Hemisphere to integrate the team responsible for the construction of the International Space Station (ISS). It is also a pioneer in many fields, including ethanol production.
Brazil is also a pioneer in the fields of deep water oil research from where 73% of its reserves are extracted. According to government statistics, Brazil was the first capitalist country to bring together the ten largest car assembly companies inside its national territory.
When the Portuguese explorers arrived in the 15th century, the native tribes of current-day Brazil, totaling about 2.5 million people, had lived virtually unchanged since the Stone Age. From Portugal's colonisation of Brazil (1500-1822) until the late 1930s, the market elements of the Brazilian economy relied on the production of primary products for exports. Within the Portuguese Empire, Brazil was a colony subjected to an imperial mercantile policy, which had two main large-scale economic production cycles - sugar and gold. The economy of Brazil was heavily dependent on African slave labour until the late 19th century (about 3 million imported African slaves in total). Since then, Brazil experienced a period of strong economic and demographic growth accompanied by mass immigration from Europe (mainly from Portugal, Italy, Spain and Germany) until the 1930s. In the Americas, the United States, Argentina and Brazil (in descending order) were the countries that received most immigrants. In Brazil's case, statistics show that 4.5 million people emigrated to the country between 1882 and 1934.
Currently, with a population of 190 million and abundant natural resources, Brazil is one of the ten largest markets in the world, producing tons of steel, 26 million tons of cement, 3.5 million television sets, and 3 million refrigerators. In addition, about 70 million cubic meters of petroleum were being processed annually into fuels, lubricants, propane gas, and a wide range of petrochemicals. Furthermore, Brazil has at least 161,500 kilometers of paved roads and more than 63 million megawatts of installed electric power capacity.
Despite these figures, the economy cannot be considered developed. Although the economic changes since 1947 greatly raised the country's per capita income, in 1995 was still only US$4,630. Growth and structural change have not altered significantly Brazil's extremely unequal distribution of wealth, income, and opportunity. Despite impressive increments in economic growth and output, the number of poor has risen sharply. Most of the poor are concentrated in the rural areas of Brazil's Northeast Region, or in the country's large cities or metropolitan areas. The economic and political troubles of the 1980s and early 1990s have only complicated the task of correcting the country's development pattern.
|Main products||Coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus, beef|
|Agriculture growth rate||7.2% (2008)|
|Labor force||15% of total labor force|
|GDP of sector||3.5% of total GDP|
In the space of fifty five years (1950 to 2008), the population of Brazil grew by 51 million to approximately 187 million inhabitants, an increase of over 2% per year. In order to meet this demand, it was necessary to take the development of cattle and crop raising activities a step further. Since then, an authentic green revolution has taken place, allowing the country to create and expand a complex agribusiness sector. However, some of this is at the expense of the environment, including the Amazon.
The importance given to the rural producer takes place in the shape of the Agricultural and Cattle-raising Plan and through another specific program geared towards family agriculture (Pronaf), which guarantee financing for equipment and cultivation and encourage the use of new technology, as shown by the use of agricultural land zoning. With regards to family agriculture, over 800 thousand rural inhabitants are assisted by credit, research and extension programs. The special line of credit for women and young farmers is an innovation worth mentioning, providing an incentive towards the entrepreneurial spirit.
With The Land Reform Program, on the other hand, the country’s objective is to provide suitable living and working conditions for over one million families who live in areas allotted by the State, an initiative capable of generating two million jobs. Through partnerships, public policies and international partnerships, the government is working towards the guarantee of an infrastructure for the settlements, following the examples of schools and health outlets. The idea is that access to land represents just the first step towards the implementation of a quality land reform program.
Over 600,000 km² of land are divided into approximately five thousand areas of rural property; an agricultural area currently with three borders: the Central-western region (savanna), the Northern region (area of transition) and parts of the Northeastern region (semi-arid). At the forefront of grain crops, which produce over 110 million tonnes/year, is the soybean, yielding 50 million tonnes.
In the bovine cattle-raising sector, the “green ox”, which is raised in pastures, on a diet of hay and mineral salts, conquered markets in Asia, Europe and the Americas, particularly after the “mad cow disease” scare period. Brazil has the largest cattle herd in the world, with 198 million heads, responsible for exports surpassing the mark of US$ 1 billion/year.
A pioneer and leader in the manufacture of short-fiber timber cellulose, Brazil has also achieved positive results within the packaging sector, in which it is the fifth largest world producer. In the foreign markets, it answers for 25% of global exports of raw cane and refined sugar; it is the world leader in soybean exports and is responsible for 80% of the planet’s orange juice, and since 2003, has had the highest sales figures for beef and chicken, among the countries that deal in this sector.
|Main industries||Automobile industry, petrochemicals, cement and construction, aircraft, textiles, food and beverages, mining, consumer durables, tourism|
|Industrial growth rate||6.8% (2007)|
|Labor force||21% of total labor force|
|GDP of sector||29.7% of total GDP|
Brazil has a diverse and sophisticated services industry as well. During the early 1990s, the banking sector accounted for as much as 16% of the GDP. Although undergoing a major overhaul, Brazil's financial services industry provides local businesses with a wide range of products and is attracting numerous new entrants, including U.S. financial firms. The São Paulo and Rio de Janeiro stock exchanges are undergoing a consolidation and the previously monopolistic reinsurance sector is being opened up to third party companies.
Proven mineral resources are extensive. Large iron and manganese reserves are important sources of industrial raw materials and export earnings. Deposits of nickel, tin, chromite, uranium, bauxite, beryllium, copper, lead, tungsten, zinc, gold, and other minerals are exploited. High-quality cooking-grade coal required in the steel industry is in short supply.
|World Rank||Company||Logo||Industry||Revenue (billion $)||Profits (billion $)||Assets (billion $)||Market Value (billion $)|
|21||Petrobras||Oil & Gas Operations||87.52||11.04||129.98||236.67|
|101||Banco do Brasil||Banking||28.61||2.60||202.00||41.54|
|Gross Fixed Capital Formation (% of GDP)|
|Average Exchange Rate (BRL for 1 USD)|
The period of great economic transformation and growth occurred between 1875 and 1975.
In the last decade, domestic production increased by 32.3% and agribusiness (agriculture and cattle-raising), which grew by 47% or 3.6% per year, was the most dynamic sector – even after having weathered international crises that demanded constant adjustments to the Brazilian economy.
With these alterations in place, Brazil has reduced its vulnerability: it not imports the oil it consumes; it has halved its domestic debt through exchange rate-linked certificates and has seen exports grow, on average, by 20% a year. The exchange rate does not put pressure on the industrial sector or inflation – at 4% a year -, and does away with the possibility of a liquidity crisis. As a result, the country, after 12 years, has achieved a positive balance in the accounts which measure exports/imports, plus interest payments, services and overseas payment.
The Policy for Industry, Technology and Foreign Trade, at the forefront of this sector, for its part, invests R$ 18.5 billion in specific sectors, following the example of the software and semiconductor, pharmaceutical and medicine product, and capital goods sectors.
The above table indicates that in 2007, for example, the bottom 50% of the population earned only 19,07% of the total income while the richest 10% of the population earned 39.31% of the total national income. Inequality is a historic problem for Brazil, but has improved in recent years.