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Brazil

Speech
Globalisationcan be defined as the movement and potential movement oflabour, investment,
finance, technology and trade across national borders. Increasingglobalisationin recent years has
had a significantimpacton thesize and structure of economiesaround the world, including
Brazil,and thepolicy responses of these governments.Over recent years, the Brazilian
government has embracedglobalization, while still ensuring protection forlocal
industries.Economic reforms have been put in place which reap the benefits of having both an
interconnected market economy and strong domestic production.However, just 30 years ago
Brazil wasamilitary dictatorship, struggling with a debt of US$95 billion and 222% inflation
rate.

Economic growth is defined as the increase in the capacity of an economy to produce goods and
services, compared from one period of time to another. Recognized as a developing country,
Brazil has improved its economic performance significantly sincethe 1990s. After opening up its
industries, Brazil has achieved high rates of growth as well as improving its public
finances.Brazil has experienced 6.12% annual GDP growth since 1990, and proved resilient to
the external downturns of the GFC and Asian financial crises.This growth can be attributed to the
increased openness of the Brazilian economy, which hasattractedincreased foreign direct
investment (FDI).
Followingthe Global Financial crisis of 2008,Brazilintroduced a floating exchange
rate,protectingitself from future financial instability.Brazil hasalsobuilt large foreign currency
reserves, a strategy implemented by emerging economies to provide a safeguard against
instability.Fromless than$50 millionUS in 2005,reservesincreased to over $350 million US in
2012.Furthermore, Brazil has set a ceiling on public debt at 120% followingthe massive foreign
debt of the 1980s and1990s.
Globalisation,particularlythe trade in agricultural products,hashad a profound impact on the
environment in Brazil.By 2012, soybean production alone had destroyed 21 million hectares of
the Brazilian rainforest.Deforestation of the Amazon may result in permanent and significant
biodiversity loss, as well as contributing to the ever pertinent global warming issue.

Economic development can be defined as the sustained, concerted actions of policy makers and
communities that promote the standard of living and economic health of a specific area.Strong
economic growth combined with successful government policies have allowed for an increased
standard of living, as well as thedevelopmentof more infrastructure. Poverty has been
significantly reduced, down from 21% in 2005 to just 9% in 2009, while life expectancy has
increased from 68 years in 1995 to 74 in 2012. This is due in largepart tothe Governments
recent investment in health, education and poverty reduction. TheBolsa-Familia, introduced
11years ago, is a social welfare program designed to provide assistance to poor Brazilian
families.The schemecombatsBrazils socialdisadvantagein the short term by direct cash
transfers andin the longer-termby increasing the human capital throughconditional cash
transfers.
Despite these improvements,iBrazilspoornfrastructure,, remains an area of much concern
toitseconomic development. During Brazils struggle with inflationin the 1980s, infrastructure
was overlooked, leaving it well behindother nations. As of 2013, Brazils infrastructure made up
just 16% ofthe value of itsGDP, while other advanced economies averaged 71%.At the moment,
Brazil spends just 1.5% of its annual GDP on infrastructure, and will need to triple this for the
next 20 years to catch up to the advanced economies of the world. To increase this spending, the

Brazilian government implement theProgramadeAceleracaodoCrescimento, which aimsto


stimulate private investment in the improvement of infrastructure through tax exemptions.

Historically, Brazilhas beencharacterizedasa country with high levels of inequality. However,


the increased economic growth and policy developments have meant consistent progress, shown
in the reduction of the Gini co-efficient from .6 in 2000 to .53 in 2011.During his time in power,
President Lula da Silva(dates would be good here)implemented several policies, including
theBolsa-Familia(which I mentioned previously) andincreasedminimum wage rates. These are
regarded as being some of the most successfulanti-poverty policies in the world. Despite this,
Brazil still ranks 12 lastin the world for the Gini Index,reflectedinthe fact that the richest 20%
of the population hold 59% of the total wealth.
th

The structure of the Brazilian economy and its employment has changed sinceitsopening
toglobalisation. A lot of this change can be attributed toincreased FDI and solid economic
growth.For Brazil, this FDI has been focused on improving the tertiarysetor, seen in the growth
ofthe service industryby 10% since 1990.This is a positive sign for Brazil as more economically
advanced countries are characterized by having strong service and tertiarysectors.

Globalisationhas had a profound impact on Brazil and its economy. After initial hesitation,
Brazils decision to embraceglobalisationhas resulted in significantly improved economic
growth and stability, particularly in reducing inflation and returning to budget surplus. Thanks to
the commodities boomand various government initiatives, Brazilhas beenable to improve social
and economic infrastructure. However,if Brazil wants to become a global economic power in the
near future, significant economic development will have to
occurtoimproveinfrastructure,reduceinequality andimprovehuman capital of the lower class
members of society