And Now.... BRAZIL
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• Why do some economists speak of Brazil as a "developed nation" that is "still developing"? • What challenges is Brazil taking on in the new millennium? • How much value does it place on free-trade agreements with other nations? • What role is Brazil likely to play in the 21st century? Here’s some background for your research into those questions.
Just say "Brazil" to a world traveler, and you’re bound to hear praise for its unique culture — for its music, art, architecture, festivals, and cuisine. Mention it to sports fans, and they’ll rave about the Brazilian soccer team’s capture of five World Cups (an unmatched record). But ask about Brazil’s gross domestic product (GDP), and you may draw a blank . Many people are unaware that Brazil has the world’s tenth largest economy. Or that it has become an estrela em ascensão — a rising star — among nations. Here’s the story.
Big assets. Brazil is one of the world's leading manufacturers of aircraft and automobiles. It ranks among the top five nations in the production of iron ore, coffee, and soybeans. And it is a major exporter of such commodities, too. Brazil's greatest asset, however, is its people. Over the centuries, millions of Portuguese and other Europeans — as well as Africans, Asians, and Arabs — arrived in Brazil, mingled with its native peoples, and built a vibrant culture. Now their 182 million descendants are hard at work: expanding industries (steel, petrochemicals); building new roads across the vast interior; and constructing utilities. The hydroelectric plant at the Itaipu Dam is the world's largest.
Big challenges. Expansion has created some challenges, however. The new lumber,
farming, and grazing industries in the Amazon rainforest are good sources of jobs. But
overcutting this forest could threaten Earth’s single largest source of atmospheric
oxygen and its single biggest source of living species. To offset such threats, Brazil has adopted tough policies: It cut subsidies to cattle farmers in the Amazon region. It requires developers to keep four fifths of their land forested. And in 2000, it agreed with world conservationists to set aside 10 percent of the huge rain forest as a permanent reserve.
Passing such laws takes courage. Brazil has only
recently tamed inflation (under 10 percent in 2002, it was 900 percent
in 1994!). Its cities are crowded. Per-capita income is $7,600. And the
big income gap between the wealthiest and poorest Brazilians concerns
economists. All this could make development of the rainforest seem more
important than preserving it. But Brazil has other options....
Regional power. In today’s world, top GDP nations seek global markets, and most choose to join — rather than compete with — neighbors in this search. The European Union (EU) is one example. The North American Free Trade Agreement (NAFTA) is another. And in 1991, Brazil, Argentina, Paraguay, and Uruguay formed the Southern Common Market, to reduce tariffs among themselves and set matching tariffs for external trade. (The Market’s name is abbreviated as MERCOSUL in Portuguese, MERCOSUR in Spanish.) By 2001, trade among the four nations had quadrupled, and Brazil's export market was still growing.
And now.... Today, Brazil is a key global trader. Its growing export markets in the USA, China, and elsewhere are creating new jobs at home. The EU is pursuing free-trade agreements with Brazil and its MERCOSUL partners. And Brazilian President Luis Inácio Lula da Silva is optimistic that "the great majority of [other] South American countries" will soon join MERCOSUL, too. Keep watching! "Team Brazil" is on the field....
Research Tip. Researching Brazil's trade goals? See Juan Forero's article in The New York Times: "Brazil Pushes for South American Trade Pact." (September 17, 2003.)
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