ECONOMY OF BRAZIL
ECONOMY OF BRAZIL

ECONOMY OF BRAZIL

Brazil is one of the key countries in the developing world. In terms of GDP, it ranks 1st in Latin America, and in terms of GDP per capita, it is 2.3 times higher than all PCs. Brazil accounts for 2/3 of the industrial potential of South America and over half of its scientific and technological potential. Brazil’s GDP is equal to half of the PRC’s gross domestic product, but it is two times higher than India’s and 1.7 times that of Russia. Brazil is currently a federal republic. The currency is the real (2.01 BRL / USD). The state language is Portuguese.

This is the largest state in South America, located in its central and eastern parts. By the size of the territory – 8.5 million km 2, it is second only to Russia, the USA, China and Canada. The population exceeds 170 million people, according to many socio-economic characteristics Brazil belongs to the PC, but it occupies a special place among them. With great economic potential and a fairly high level of economic development, according to the UN classification, Brazil belongs to the group of “newly industrialized states” and is one of the ten leading countries in the world in terms of GDP, 7.8 times less than industrialized countries in terms of GDP per capita population. The country produces about 2% of the world’s GDP.

The basis of Brazil’s current economic potential was created during a relatively stable development, beginning in the mid-1960s, when large infusions of foreign capital, new technologies and technologies were in its economy. During these years, a modern automobile industry was created (6th in the world), its aircraft industry (3rd in the world), oil production (Brazil is among the 20 countries – the largest oil producers and ten countries with the most developed oil refining); aerospace complex. Within the lifetime of one generation (from the mid-1970s to the mid-1990s), Brazil made a short leap in its development, turning into an industrialized agricultural country with a significant complex of modern industries. The share of industry in GDP is 24.3%, and agriculture is 5%.

Brazil possesses large reserves of minerals: iron (over 100 billion tons), manganese (100 million tons), uranium (256 thousand tons) ore, coal (21 billion tons), oil, etc. However, despite the rapid development and rich raw material base, the share of this industry in GDP is small. The country has a highly developed mining of apatite and iron ore, gold, silver, tin, diamonds and asbestos. The iron ore industry is mostly exported—ferrous metallurgy – on its ore and imported coke. The country is among the top ten global steel producers, which in 2010 reached 32.8 million tons.

The production of aluminium on its bauxite, as well as nickel and copper, is well developed. Proven oil reserves amounted to 14.25 billion barrels. The total oil reserves on the seabed were estimated at 64 billion barrels. Total gas reserves are estimated at 367 cm.

In the manufacturing industry, transport engineering is the most developed (primarily the automotive industry). Brazil produces over 1.5 million vehicles a year. The country is in the 3rd place in the world in the production of aviation equipment and the 4th in sea vessels’ construction. The radio equipment structure is developed, and electronic computers and software are growing at a high rate.

Machine-tool industry occupies a prominent place among the engineering industries, which can meet most machine tools’ demand. The Brazilian chemical industry is one of the largest pharmaceutical manufacturers.

Brazil has achieved significant success in developing the aerospace complex, has an equatorial (one of two on the planet) cosmodrome in Alcantara and has become the only PC member of the International Space Station project. Back in the 1970s-1980s. Brazil has created the most powerful military-industrial complex in Latin America.

In light industry, the most traditional industries are food, textiles and tobacco.

As for the energy sector, it should be noted that hydroelectric power plants produce up to 90% of all electricity in the country, there are two nuclear power plants, alternative sources are widely used (most of the cars run on alcohol), coal, and firewood. Thus, today Brazil has all the main industries and a complex of high-tech sectors, whose products are exported, including developed countries, and have a developed ITT sector.

Agriculture also traditionally occupies an important place in the country’s economy. In different periods, sugarcane, cotton, coffee were industrial raw materials. The share of agriculture in domestic production dropped to 5%, but the agricultural sector plays a huge role in the population’s employment. 23% of the workforce is concentrated there, slightly more than in industry. In the industry structure, crop production is the leader (60% of the value of all products). The main export crops – coffee, cocoa beans, cotton, sugar cane and soybeans – account for over a third of the cultivated area. Grain production reached 73-80 million tons, making it possible for Brazil to refuse international food aid. In terms of harvesting corn, it is second only to the United States, soybeans – to the United States and China. For more than a century, Brazil has been the largest coffee producer.

Brazil is self-sufficient in providing itself with food. Moreover, the country is a leading exporter of tropical crops. Unlike other countries in Latin America, Brazil has increased agricultural production while slightly expanding arable land.

Brazil came out on top in the supply of sugar cane due to the partial replacement of Cuban sugar globally and the rapid growth in ethanol production. Also, the country ranks 3rd in the production of corn. It is the world market leader for the collection of bananas and oranges, is the world leader in the production of cassava and beans, and ranks second in the world in terms of cocoa production. Brazil is the largest rice producer in the Western Hemisphere. Most of these crops go to the domestic market.

Brazil has one of the largest livestock in the world. Livestock in Brazil is mainly meat, accounting for about 40% of the value of agricultural products. Pasture cattle breeding prevail, as well as beef cattle breeding in combination with vegetable growing.

There are huge Amazonian forest areas in the North of Brazil, covering 60% of the entire country. But reserves of valuable tree species are used unconventionally and poorly.

Since colonial times, in the evolution of land use and land tenure systems, the institution of large land ownership – latifundia (80% of all cultivated land) has developed. Brazil still has the highest land tenure concentration: 45% of the cultivable land is owned by 1% of owners, while the largest farms do not use more than 40% of the land.

Also, mini funds are common. Although the latter’s share is small, they produce the bulk of food crops for domestic consumption: cereals, legumes, and potatoes. The preservation of archaic forms of management is the main cause of poverty and the rural population’s low living standards.

Modern economic development is directly related to building up scientific and technical potential. In the 1950-1960s. The Brazilian economy was almost entirely dependent on technology purchases from abroad, in the 1970s. The expansion of spending on the creation of a national research base began.

Over the past decade, Brazil has made progress in the development of R&D. However, and it lags behind industrialized countries in terms of the share of GDP allocated to R&D (0.7%) and the number of researchers per thousand inhabitants (9.3 per thousand inhabitants).

Brazil is the ninth-largest Internet market, but it is ranked 1st in Latin America for this indicator. The government has developed the PROGEX program to equip large and medium-sized enterprises with technologies that make them competitive in the international market.

Rapid changes in the structure of the economy have accelerated urbanization. The number of townspeople for 1950-1995 increased almost seven times and exceeded 80% of the population against 36% in 1950. The rapid growth of the urban population at the expense of people from rural areas exacerbated employment, crime and other social problems.

One of Brazil’s economic life is the sharp differences in regional development, especially between the North-East and the South. The South-East concentrates over 70% of the manufacturing industry. The state of São Paulo alone accounts for 59% of all industrial production.

In the early 1990s. The level of payment in the North-East was half that life expectancy was ten years shorter; the number of illiterates was two times higher. This area is home to 30% of the country’s population, but it produces 15% of GDP. The difference in wages between regions is significant, with the national average of 1,793.96 BRL ($ 896), which is 10-15% higher in the advanced areas than tropical areas.

The wage gap between men and women persists (women’s wages averaged 70% of men’s wages) and between representatives of the white and black populations (approximately two times). Wages in the public sector also exceed wages in private enterprises by almost two times (4000 versus 2181 BRL)

In general, over the 50 post-war years, Brazil has reached an average level of development. For a long time, her economy has shown a relatively high dynamism. For 1950-1995. GDP increased by 11.4 times. These growth rates outpaced population growth, making it possible to increase the production of gross product per capita by about 2.5 times. The country’s current GDP is BRL 4.403 trillion ($ 222 trillion), $ 236 trillion in PPP terms. The per capita income is 22,400 BRL or $ 11,900 at PPP.

About Zahid Shaukat

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