Paulo Vicente

LCDR/USN

BRAZILAn Economic Success Story?

Presentation Overview

• Background– Country Profile

– Political System

• Economy– Macroeconomic Indicators

– Import Substitution

– Export Oriented

– Performance

• Challenges

• Economic Outlook

Background: Country Profile

Map Source: http://www.interworld-brasil.com

• Former Portuguese Colony

• Independence Sep 1822

• 188 Million

• W-53% M-38% B-6%

• Roman Catholic

• ½ Latin America Landmass

• ½ S. America Population

• 81% Live in Urban Areas

• 5th Largest Country

• 9th Largest Economy

• 3 Branches of Government

• 5 Administrative Regions

• 26 States + 1 Federal District

• 81 Federal Senate

• 513 Chamber of Deputies

• 1964-85 Military Regime

• Voting Mandatory

• 15 Parties Represented

• Dual Transition (Political & Economic)Map Source: http://en.wikipedia.org

Background: Political System

Economy: Macroeconomic Indicators

• Diversified Economy– Industry & Manufacturing (37% GDP)

– Agriculture (9% GDP)

– Services (53% GDP)

• Energy– Hydropower Power

– Nuclear Power

– Ethanol

– Foreign Oil

Economy: Import Substitution

Import Substitution Industrialization

Export-Oriented Industrialization Neoliberalism

Brazil’s Economic Transition

Mercantile Economy

Source: http://web.worldbank.org

$8B

$46BISI• Protectionism

• Productivity

• Consequences

EOI• Trade

• Investment

Economy: Performance (GDP)

Recession

87-94: Hyperinflation

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Shock Therapy

400% 2600%1700% <50%

Mexican Peso Crisis Asian Crisis

Russian CrisisInflation

Political ReformsPolitical Reforms Argentine Crisis

Challenges

• 22% Poverty

• Afro-Brazilians Poorest

• Literacy Rate 89%

• 1% Control 45% Farmland

• 1% gets 50% GDP

• Rising Crime Rates

• Public Security

Concentration of Industries

Half of Brazil’s Economy

Poorer Region

Economic Outlook

• Opportunities– Regional Integration

– Globalization

• Domestic Challenges– Fragile Political System

– Bureaucratic Barriers

– Public Debt

– Productivity

– Poverty & Inequality

• Global Challenges– Barriers to Trade

– Regional Competitors

– US & Global Economy

Economic Performance

Source: Bertelsmann Transformation Atlas (BTA) http://www.bertelsmann-transformation-index.de/atlas.0.html?&L=1

Is Brazil an Economic Success Story?CONCLUSION

Questions?

BACK UP SLIDES

Economic Performance

Source: Bertelsmann Transformation Atlas (BTA)http://www.bertelsmann-transformation-index.de/atlas.0.html?&L=1

Compared to Chile

Inflation