Summary: What Impact Does Brazil Have On The Global Economy

In 1996 FDI inflows had increased to 11 Billion and in 2011 FDI inflows stood at their peak of 66 Billion US dollars. Through FDI inflows employment was created as transnational corporations such as L’Oreal and FIAT group began expanding into the Brazilian market. Lowered unemployment combined with reductions in income in-equality among the people of the Brazil provided sought after government revenue. This government revenue allowed for the Brazilian government to fund national activities in the areas of transportation, industry and trade as well as energy and mining which all helped in the growth of Brazils manufacturing industry.

The increasing integration of trade between economies resulting from globalisation has stimulated high levels of economic growth for Brazil, minimising the country’s current account deficit (CAD). However, a recent steep decline in Brazil’s trade surplus, which narrowed to $2.6 billion in 2013 from $19.4 billion in 2012, has widened the current account deficit to $81.37 billion

Brazil with a population around 201,032,714, is the largest South America’s country. Brazil’s most important components of its GDP are service revenues, wide industry sector and its successful agriculture.

To determine the cost of doing business in Brazil, its future economic status, and business practices, first we must briefly examine its geographical area, culture, and government.

Brazil is made up of 200.4 million people and the already the estimated number of people unemployed is a close to 10.4 million during December-February. This impacts the Brazilian economy critically as this leads to higher payments from state and federal Governments (Stephan D. Simpson, 2013) and with big events for Brazil; the country is looking further into spending a lot more money than

In the past 20 years the Brazilian economy and government have overcome many difficult and major monetary problems. During the period of time from the 1980s to the 1990s Brazil experienced widespread inflation, leading to the devaluation of the Brazilian currency. This in turn hindered efforts at economic expansion and growth. The politicians and economists of the time did not know how to stop inflation from growing, and the GDP of Brazil in the 1990s fell by more than 80 percent, hitting an all-time low. In addition to monetary problems, like other South American countries Brazil was battling high rates of government corruption. In fact President Collor de Mello was impeached due to charges of corruption during September of 1992. Inflation was running very high in the midst of the 1990’s for Brazil and though many government leaders had promised to combat it since the 1980s, unfortunately their plans failed to work (The Real Plan, 2013, January 1). Thankfully, one man came up with the “Real Plan” which in fact worked and eliminated high inflation. After a successful recovery under the Real plan, Brazil would be hit in the future by two more economic crises: the South American economic crisis of 2002 and economic crisis of 2008, which had originated in the U.S. The economic crisis of 2008 was felt throughout the world, but thankfully Brazilian experience with the high inflation rates and economic crisis during the 1990’s helped them better prepare for the economic problems

Perhaps it’s bad timing that Brazil’s GDP growth has stagnated amid a time of numerous scandals in the government. Or maybe they’re connected; and that’s what the Brazilians are thinking. The recent arrest and jailing of Brazil’s treasury minister, along with the leader of the senate using a government plane to fly to see a surgeon to solve baldness, has combined to not just be embarrassing for the administration, but fuel the anger of the Brazilian people. From 2002 on to 2012, with brief downturns during the recession of 2009, the GDP of Brazil soared through the billions of US dollars, hitting the trillion mark in 2007, then two trillion mark in 2011. Dilma Rousseff, the President of Brazil, assumed office in 2011, with initial praise

Brazil has the third-biggest production zone inside the Americas. Accounting for 28.5 percentage of GDP, Brazil's industries includes cars, steel and petrochemicals to computers, aircraft, and consumer durables. With accelerated monetary stability supplied by means of the Plano Real, Brazilian and multinational agencies have invested heavily in new device and technology, a large share of which has been purchased from

The top export categories in 2013 were: Machinery ( $5.5 trillion), vehicles ( $3.5 trillion), Electrical Machinery ( $2.3 trillion), optical and Medical instruments ( $2.2 trillion), and Aircraft ( $1.9 trillion).

After their independences, and de-centralization and re-centralization, Brazil and India have advanced from socialist-inspired policies. These systems were theoretically in favor because they were believed to hold the potential to lift the economy and consequently the people. Unfortunately, these socialist-inspired policies did just the opposite: the economic growth rates in both countries slowed, authority was incoherent, and foreign investment was discouraged. Upon liberation from these systems and entering into the globalization and the free market did these two countries started to thrive rapidly. Interestingly, both Brazil and India decided to stay away from globalization and the free market when the rest of the world was getting

How does Trade and the environment effect Brazil? In Brazil according to Stanford studies “soybean production has become a significant force for economic development in Brazil, but has come at the cost of expansion into non-protected forests in the Amazon and native savanna in the Cerrado. They continue on by saying, “For more than three decades, deforestation in the Amazon has been driven by the expansion of pasturelands for cattle production. Pasture area also expanded rapidly because soils found throughout much of the region are poor in nutrients following forest slash and burn, and crop production cannot be maintained in the face of degradation of soils and lost vegetation productivity”

When one examines the components of a successful economy, it becomes apparent that forward thinking and restrained leadership are the two essential elements that determine a country 's future. Like many other emerging markets, Brazil has embodied these traits that have fostered immense financial growth over the past decade. The Brazilian government has demonstrated a commitment to pro-business policies and taken advantage of the fact that their government can act swiftly on behalf of their financial well being, while so many other developed nations find themselves stuck in a political bureaucracy. The global economy has taken an interest is Brazil which is why the country is consistently ranked in the top 20 emerging markets by world renowned business publications over the years (need citation). In order to understand how Brazil developed into the seventh largest economy in the world one must examine how the expansion of global knowledge and communication has affected the country over the years. The last five years have brought significant changes to the Brazil 's international trade which give clues as to the direction that country is headed. In order to understand what makes Brazil so desirable to the world, one must look at the country’s primary exports and imports.

During the 2000s, the economy of Brazil had expanded rapidly because of its consumer boom and commodity exports, making the country the attraction of international markets. Nevertheless, the product growth, together with the rise of inflow of foreign capital, exerted upward pressure on the Brazilian Real. The government introduced capital controls in 2008 to prevent extreme inflow of foreign capital. Dilma Rousseff was elected to minimize the interest rates, increase investment in the country and improve productivity. In the first year of Rousseff presidency, the cost of labor in the country increased swiftly. The failure of increase in productivity growth resulted in the costs of unit labor being pushed upwards. The rise in the relative cost of production in the country led to greater incentive for enterprises to import products rather than purchasing them domestically. At the beginning of 2011, growth in industrial production weakened. In an attempt to improve the economy, the government introduced several stimulus packages to revive industrial production (The Economist,, 2012).

By 2013 china had accounted for 15.4% of GWP and 10.5% of exports of goods and services around the world. The expansion of china’s exports and imports from 2005 to 2012 is phenomenal. In 2005 exports were valued at $762 billion and in 2012, it was rated at 2,048.8 Billion. Imports during this time increased from $660 billion in 2005 to 1,818 billion in 2012. However in 2009 china took a small hit as the GFC effected the world economy and the export value from 2008 to 2009 dropped from $US1,430 billion to $US 1,201 Billion. In 2014 the biggest exports from china were electronic equipment, machinery, clothing and accessories and furniture, thus showing the major use of the manufacturing sector in china.

While researching text written on the effects of global financial crisis 2008-2009 on Brazil?s economy, I found some financial analysts that had published documentations in reference to the impact on the Brazilian economy. These authors discussed in research papers, financial journals, newspapers, pamphlets, and brochures on how Brazil?s state and local-owned banks, international banks and its government and monetary policies reactions to the global financial crisis 2008-2009. My goals in this paper, is to examine the impacts of the global financial crisis on the Brazil?s economy, and measures taken by government regulatory and banking policies that led to mitigating the impact of the global financial crisis of 2008-2009.