Ongoing Petrobras Scandal

Brazil has seen its share of economic downturn in the past century. Brazil’s economy has gained strength since. In 90’s many economic reforms were put in place including tax reform, privatization, deregulation, strict fiscal policy, trade liberalization and a structural and legal framework was set up to attract foreign investment. Introduction of new currency the Real, in 1994 helped cut inflation. Market reforms turned Brazil to become an open economy and began growing again in 2009. Access to most sectors is generally favorable through imports, local production or joint ventures.

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.

However, the economy recovered rapidly during 1968 to 1973 with averaging over 10 percent per annum. The GDP also increased at a rate above 5 percent per annum between 1974 and 1980, except for 1978 (see Exhibit 2). However, Brazil had incurred an extremely high level of indebtedness due to the support of this massive development program. The high interest rates on dollar funds and the unwillingness of foreign lenders to advance additional loans caused a deep economic recession in Brazil. Interest rates directly affect the credit market (loans) because higher interest rates make borrowing more costly. As a result, Brazilian government who aimed to balance the payment had to ask the International Monetary Fund (IMF) for funds.

The purpose of this paper is to demonstrate how Brazil, a country with an extremely high rate of inflation and low growth, positioned itself as the 7th largest economy of the world and what are the challenges that the country is facing. First of all the Real Plan of Fernando Henrique Cardoso and how it helped the country to stabilize its economy and drop down the inflation rate will be discussed. Secondly how his successor’s policies, Luis Inácio Lula da Silva, improved country’s economy. At the end the challenges that Dilma Vana Rousseff, the current president, is facing

Following the Olympics in Brazil, Senate opened the impeachment trial against President Dilma Rousseff, the first female leader, who is suspended. The reason for her suspension is accusations of illegally doctoring accounts ahead of her re-election in 2014 to hide a budget shortfall and to keep funding popular social programs. The first two days of trial, witnesses will testify and Rouseff will present her defense on Monday. Voting will be held tuesday, her impeachment is widely expected to happen. This all began in May, since then her vice president, Michel Temer, is the interim president. Massive protest across Brazil have happened because of the political corruption and Brazilians demand Rousseff’s impeachment.

Brazil is currently an upper middle class developing country that has positioned itself as the leading economy in South America and the ninth biggest economy in the world. The country’s economy is composed of three big sectors: services which account for approximately 72% of GDP, manufacturing that generates 22.7% of GDP and lastly agriculture generating 5.2% of GDP. Despite being able to sustain steady economic growth and hitting a peak of 7.5 % annual GDP growth on 2010, Brazil has entered a depression and its annual GDP growth has declined in the past five years to -3.8%. Other economic indicators such as inflation and unemployment rate rose to 10.7% and 12% respectively.

Brazil has an unequal society with a large income gap between the rich and the poor. Since Brazil’s transition to democracy, there has been minimal change in its political and social inequalities. The answer to Brazils Petrobras corruption scandal focuses primarily on the country’s consistent political clientelism and patronage.

Dilma Rousseff, the first lady to be elected as president of Brazil, has had her part of career good and bad times. Rising costs, back warding economic performance and ceaseless corruption - there are numerous explanations behind Brazilians to be disappointed. What's more, it appears that more of them are considering President Dilma Rousseff in charge of the circumstance. In the most recent survey led by the surveying institute Datafolha, just 8% of Brazilians said they were content with Rousseff's policies. 71% of those questioned classified her policies as "terrible," or "awful." Rousseff clarified why she, more than any other person, is being considered dependable by the Brazilian people: "It is a concern that numerous individuals believe

Contracts with Petrobras increased the need for new employees in the companies, mainly experts in various areas of engineering: piping, mechanical, hydraulic, civil, petroleum and gas, in addition to new designers and IT experts. It is worth emphasizing that the IT park of the companies investigated has undergone significant changes based on the contracts with Petrobras, due to the specificity of the software dedicated to its projects. With the new employees, new departments and new working routines were created, which were intended to leverage different areas of engineering.

The article of discussion is been published in The Economist on 7th Feb 2015, it’s about the Brazil’s oil industry’s major player Petrobras ( 'Pitfall at Petrobras ', 2015). Petrobras is tangled in scandals money laundering, commissions paid to politicians for favour’s, and targeted for artificially inflating the company real vale from the investor to raise debit which eventually led for the resignation of the only women CEO of oil an company .Will the change in such top ranking official fix the problems of this oil giant and how will it effects on its economy, global image and future investments, in such a volatile market were the price of oil is highly dependent on the consumer demand internationally. Real change in company’s culture & strong Global leadership skilled CEO (Expert power) is needed to bring the change.

The extent of his popularity can widely recognized especially after his presidency. Not only did he enjoy an 80% approval rating in the last year of his presidency, there was also talks of changing the Brazil Constitution to allow for a third term (Newsweek). His popularity helped secure the rise and presidency of his mentee, Dilma Rousseff, who previously lacked national name recognition. Despite Lula being one of the most popular politicians on Earth, his legacy is currently being threatened by the oncoming Petrobras scandal in which he is accused on participating in a kickback scheme with the country’s state-owned oil company. It will be extremely interesting to see how the speculations will affect Lula and the popularity that he has carefully promoted and preserved. Furthermore, if current president Rousseff is impeached, Lula could seize power of the party and run for election in 2018. Whether or not he succeeds will be the ultimate test of his popularity and legacy in a country that he built as a 21st century regional

The population in Brazil consists of 144 million people. Brazil is one of the fastest-growing nations in the Western Hemisphere. Its population is increasing at the rate of about 2 % a year. The constitution of Brazil gives the president tremendous powers. For example, the president may intervene in affairs of Brazil's states. The chief executive may even create new states from existing ones.

I have been progressively severing my ties with Brazil over the last few weeks, not without paying a psychological price. As I wrote before, I had decided to close KBR’s operations there and transfer all my business activities to the US. This was my last month of a double life. I was planning to close my bank accounts by the end of the month.

If you live in our neighborhood, you 've got to look at Argentina. It 's going through a major crisis today, but it is the second largest market in South America.1 — Francisco Gros, CEO, Petrobras

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