Brazil

The land of never ending resources continues to grow at an incredible rate, despite class disparities greater than in any of the other BRIC countries. Brazil began as a Portuguese colony that supplied the mother country with much needed natural resources. The colony was ruled by capitanas, governors in charge of tending the land, but Portugal retained ownership of the land. Because the capitanas had no incentive to care for the land they were governing, they took little caution when removing natural resources to make quick, high-dollar profits. This get-rich-quick mindset continues to reside in Brazil.

Brazil is home to an abundance of natural resources, including oil, natural gas, sugar, cattle, and many more. Historically, it has been primarily and agriculture based economy. The rich in Brazil would purge the land of its natural resources and sell them until they became depleted or the domestic and international markets became saturated. Because of Brazil’s abundance of resources, the rich were able to continue this pattern for several decades. The military dictatorship continued this pattern whenever they took control of Brazil. But after elected presidents enacted plans for diversification of resources and income, the industry sector gained a higher percentage of their GDP than agriculture. Now, Brazil has the best off-shore oil drilling technology in the world, a positive feature of their natural resources.

Of all the BRIC countries, Brazil has the largest gap between the rich and poor classes. One Brazilian professor coined the term “Belindia” to describe the class separation in Brazil. This term means that the richest people in the country live like the rich in Belgium while the poorest Brazilians live like the poor in India. This is an accurate depiction of the class situation in Brazil. According to a Brazilian student in my class, the people in Brazil do not seek to change the class differences due to the short-term mindset of Brazilians. The poor would rather spend all their money on a float displayed in Carnival, the largest party in the world, for ninety minutes than obtain a well-paying job. Carnival demonstrates another issue standing in the way of success for Brazil: it has a short-term thought culture. People are concerned with the here and now and how they can achieve greatness today, but do not properly plan for long-term growth.

As far as government intervention in the economy goes, Brazil began with a protectionist mindset to develop their businesses. As the country developed and their businesses grew, Brazil opened their borders to foreign direct investment (FDI) and joint ventures (JV) with Brazilian companies. By bringing in FDI and JVs, Brazil increased competition, efficiency, and effectiveness at producing better products and developing better technology. There has been a recent resurgence of import substitution to further develop Brazilian businesses. If they choose to pursue this, they will decrease the competitiveness that has driven them to success.

In summary, Brazil’s economic growth is dependent on its ability to diversify its investments, properly use its natural resources, and survive in the long-run. If Brazil is able to overcome these daunting tasks and continue to use FDI, they have to potential to be a contender with China and the U.S.