ECONOMICS OF DEVELOPMENT- BRAZIL

Economics of Development- Brazil



Economics of Development- Brazil

Description of the Brazil's Economy

The Brazilian economy has experienced a sustained level of growth since the year 2000 after facing difficult decades in the past. The country's engagement with the global economy has played a vital role in their positive economic development. This particular aspect has it made it possible for Brazil to acquire a leading position in the World Trade Negotiations. During the same time, the country has also struggled to generate high amount of employment and labour incomes. The current unemployment rate of the country is 8%. The average earnings today are lower as compare to the period mid-1990s. The policymakers have made an extensive effort for suggesting suitable economic policies for the country (Cole, 2004). Therefore, all the issues related to the Economic Development of Brazil will be discussed in detail.

The status of Brazil as an emerging economy

The economy of the Brazil is the largest in South America and is also the tenth largest in the world. The statistics of the Brazilian economy states the GDP worth of $2.503 trillion and $12,789 per capita. The economy is reasonably diversified which consist of the well developed agricultural, mining, petroleum, manufacturing and services sectors. The recent discoveries of the large petroleum reserves show that the fact that the country will be able to avoid any kind of disruption that occurs because of the global oil price shocks. Brazil would emerge as a major petroleum exporter in this regard. The global financial crisis has created a negative impact on Brazil's withdrawal of the foreign investment, currency fluctuations and the shortage of trade finance. Though, the macroeconomic variables of the country are quite strong. Brazil has around $200 billion in foreign exchange reserves that provides a backup against any kind of external disturbance. The economy of Brazil does not have a deep integration into the global economy as compare to the countries. The production of the goods is usually carried out for the domestic market. Though, the exports can suffer if all the local production would be consumed in the economy. All the factors contribute towards the fact that Brazil is the emerging economy in the world (Barbosa, 2001).

Industrial Sector of Brazil

There is large number of industries in Brazil that contributes considerably towards the economy. The percentage of the industrial growth towards the entire GDP figure is 30%. The industries include Electrical machinery, Chemical Industry, Petroleum and Gas Extraction, Refined Petroleum Products, Automobile Industry and Metal/Steel Industry. This is the reason why the Brazil has the second biggest industrial sector in South America. Brazil had a period of economic stability because of the policy of the Plano Real. This is the reason why there are many Brazilian and multinational companies that made large investment in new equipment and technology. A large purchase has taken place from the U.S. firms in this regard. The industrial sector of the Brazil is very diverse and is quite sophisticated as ...