Brazil Will Eventually Become Economic Powerhouse Essay
Brazil Will Eventually Become Economic Powerhouse
Currently, Brazil with its population hitting 186. 6 million has the ninth largest economy in the world (Jaeger, p. 2). Since the beginning of the 21st century the country has been enjoying a well-established economic stability, low inflation, high productivity rates and developing macro-economic infrastructure. Currently, Brazilian economic indexes are gradually improving in their dynamics, though some of them still remain on the average level for Latin American region.
In particular, GDP growth in 2006 was hardly over 3% (Estevao). Since the middle of the last century Brazil was expected to develop shortly into “the world’s next economic power. ” However due to two-decade long economic stagnation and financial crises in the mid-1980s Brazil has lost its positions and fell short of expectations regarding its economic development, especially in comparison with rapidly progressing economies of the countries in Asian region, such as China, Taiwan or South Korea, etc. (Adrogue, Cerisola & Gelos, p. 3).
Nevertheless, in the 1990s a series of well-planned governmental policies were implemented and Brazilian economy went through a number of structural economic changes, which allowed achieving certain stability, especially on macro-economic level. Therefore, country’s inflation was taken under control, external debt was considerably decreased, and numerous measures directed on reformation of financial infrastructure, liberalization of trade, achieving price stability and stimulating general economic growth were undertaken (Jaeger, p. 5-6).
This way the country managed to improve its international image and gain a reputation of “trustworthy” nation again. As a result, since recent times Brazil has been receiving a lot of private investments. Foreign investors are attracted by high return of their funds and relatively low risks. Such significant factors, as good demographic situation in the country, high interest rates, stable political situation and prudent governmental policies regarding overseas trade, created absolutely favorable environment for foreign businessmen, who intend to invest their funds and start their businesses in Brazil.
Good investment climate and economic stability are not the only factors determining future rise of Brazilian economy. In addition to that, Brazil is very rich with various natural resources. Those are, first of all, huge territories of arable lands available for cultivation of a great variety of crops. Moreover, there are large mineral and plant resources including iron, copper and even gold, which have not been even properly explored yet. That is why there are great opportunities for different industrial and agricultural companies in Brazil.
Undoubtedly, there are some problems which require immediate attention and solution in order to fasten economic development and achieve high levels of social wellbeing. Those include corrupted educational system and problems with human capital, insufficient financial and fiscal systems, poverty and income disparities, etc. Certainly, such reforms are hard to implement within some short period of time, therefore, positive transformations are expected to become effective gradually.
Nevertheless, modern Brazil can be called the “country of the future” with its huge national market, cheap working power, abundance of natural resources, and many other factors determining a large long-term economic potential of the country (Jaeger, p. 2). Great economic stability and openness, steady increase in manufacturing and consumption, establishment of new international trade connections and other fundamentals will definitely contribute greatly to future prosperity and economic power of the country. Works Cited:
Estevao, Marcello. “Brazil Seeks to Unlock Economic Potential. ” International Monetary Fund. 26 Feb. 2007. 25 Nov. 2007 <http://www. imf. org/external/pubs/ft/survey/so/2007/CAR083A. htm>. Jaeger, Marcus. Brazil: Economic scenarios for the next 15 years. Ed. Maria L. Lanzeni. Deutsche Bank Research. Frankfurt Am Main: Deutsche Bank AG, 2006 Adrogue, Richardo, Martin Cerisola and Gaston Gelos. Brazil’s Long-Term Growth Performance -Trying to Explain the Puzzle. International Monetary Fund, unpublished manuscript, December 2006.