Government Policies And Strategies For Economic Growth And Development

However in 2011 it had so far been devastating to the dollar. Thru late July, 2011, the dollar dropped as little as R $1.5310, its lowest level since way before 2008 when the global financial crisis began. In April, 2010, the Brazilian Central Bank increased interest rates in the country, which took as its outcome the alliance of the real and the weakening of the dollar. The real touched quarterly in height of 1.7205 in April 2010, two days after the Brazilian Central Bank raised up the benchmark interest rate 0.75 percentage point to 9.5 percent. Later at that time, the Brazilian Central Bank has raised the standard interest rate to 12.5% in an effort to curb inflation. Although some do not see the central Bank raising the00201interest rates again in 2011, there should be many who would think at least one more raise of 0.25% before the end of 2011 if increase continues.

On April 1, 1991, Argentina’s Congress, with Domingo Cavallo as Minister of Economy, enacted the Convertibility Law (or Ley de Convertibilidad) legally adopting the currency board (Hornbeck, 2002). This legislation essentially pegged the Argentinean peso to the U.S. dollar. The government guaranteed the convertibility of the peso to U.S. dollar at a one-to-one exchange rate, limiting the printing of pesos to only those necessary to purchase dollars in the foreign exchange market. Thus, the central bank was required by law to hold foreign reserves to cover its peso liabilities (Hanke and Schuler, 2002). With this fixed exchange rate, the Argentinean government was hoping to preserve the value of their currency and stabilize inflation. The peg was initially successful, as it cured hyperinflation that occurred at the end of the 1980s and provided price stability needed for economic growth in the early 1990s. However, by the late 1990s,

The process of integration of economies around the world, known as globalisation, has catalysed the development of Brazil as a powerful emerging economy, through the expansion of trade and investment. Emerging countries are defined as those progressing toward becoming more advanced, through rapid growth and industrialisation. Consequently, Brazil’s rapid economic growth has secured its place in BRICS, an association of five major emerging economies, Brazil, Russia, India, China, and South Africa.

The significance of the republic policies were great, they brought a lot of growth in the 20’s allowing the market to strive over lots of trading and the purchase of shares, but was also an unstable market, as the government had no control over what it did and was left up to the

For More than two decades Brazil suffered badly from high inflation, economic decline, domestic and foreign debt. In 1993 country’s Inflation reached 30 percent a month and as a result the country wouldn’t sustain growth. After many unsuccessful plans to control the inflation, finally Real Plan of Fernando Henrique Cardoso, minister of finance, worked out and brought the inflation down to a single digit.

By setting a certain price in a certain currency (in this case Brazilian real) a company can avoid problems if there is any case of rising currency rate. The price for a asset is already set for the future contract so no matter what condition the market is in the price of the asset will remain the same.

collapse, the Argentine government adopted the Convertibility Plan, which was a currency board arrangement that fixed the nominal exchange rate between the local and foreign currency at parity. This meant that the Central Bank would hold an equal amount of dollars in its reserves to the amount of pesos in circulation.

NE Brazil has long lagged behind the rest of the country in terms of technology and income. However, economic reforms instituted by Finance Minister Cardoso has seen the

BRIC countries have been projected by economists to be some of the emerging economies in the near future. There is increased market potential in those countries hence leading to the possibility of more firms developing their roots in those countries. These projections are facilitated by the high population growth rate being experienced in those countries hence providing market and cheap labor for production.

The primary question that Brazil faces as it moves into the 21st century is whether the Brazilian style of capitalism, which harnessed their economy towards growth as a developing economy, is sufficient to drive them as a developed country. Averaging 3.8% GDP growth over the last decade, this transition seems inevitable; Brazil has shifted from an agricultural giant to a country in which 90% of the population works in the industrial and service sectors. However, as they make this conversion, they must examine their economic policies to ensure that they are still applicable and advantageous. For example, Brazil must keep promoting their industrial policies. Brazil may fall back into a commodity-driven economy if raw

This can be used by the government to revitalize the economy and drive growth in the long run without impacting inflation. Secondly, it will act a warning shot to all the people with illegally acquired wealth to shut shop and start doing things the right way for it may not be worth to amass wealth again to lose it to a similar policy in the future. Third, it will put an end to the politician-bureaucrat-criminal nexus which thrives on black money. And last but not the least, the elimination of counterfeit currency has already dealt a heavy blow to terrorism (including Maoist violence) in the

Along with the large spending incurred by the Salinas administration, the Mexican economy was further burdened by the excessive consumer spending due to the overvaluation of the peso. The peso was left unchecked as devaluation of the peso would weaken the Mexican citizens buying power, causing displeasure and thus risking

The BOP of Brazil (exhibit 5) shows that since 2000 the country was constantly a net exporter until 2014. The profile of its exports consists mainly of raw materials such as crude oil, iron, raw sugar, soybeans, etc. The collapse of commodities prices (exhibit 9) in the middle of 2014 reduced the ability of Brazil’s economy to end 2014 with a positive current account. The fall of oil prices also strongly contributed to that and Brazilian economy finished 2014 with a deficit in the Balance of goods of nearly $ 4 billion. Brazil’s GDP as expected finished 2014 with just 0.1% growth, announcing that tough times would follow.

Around the 1930s, Brazil and Latin American began following the process of Import Substitution Industrialization, which lasted until the end of the 1980s. The ISI policies devaluated the currency in order to boost exports and discourage imports, followed by adopting different exchange rates for goods (Watkins). ISI in Brazil had an interesting effect; it created a three-prong system of governmental, private, and foreign capital being directed at the infrastructure and heavy industry, manufacturing goods, and the production of durable goods. The program worked at first but then became a serious economic problem. When the 1980s came around Brazil realized that ISI policies lead to inefficient industries because of their lack of exposure to

This paper defines and explains endogenous growth theory. The paper will try to explain what endogenous growth theory is, the criticisms of endogenous growth theory and the policy