Brazil as Emerging Economy

8/13/2019 Brazil as Emerging Economy

1/27

AN EMERGING

ECONOMY

BRAZIL


2/27

GROUP MEMBERS

SABINA NISAR

ZAIN ALI BAKIR

ABIR AFRIDI

SHAMIM ORAKZAI

TAHIRA HUSSAIN


3/27

INTRODUCTION

Emerging economies have rebounded relatively quickly

from the financial crisis, and despite various challenges

they face resulting from the European sovereign debt crisis,

they face bright economic futures. While many observers have focused on China and India,

Brazil is an emerging economy that has enjoyed increasing

visibility. This Article examines Brazils evolution into an

emerging economy.


4/27

EMERGING MERKETS & BRIC

Emerging markets were characterized by growing

economies and increased wealth with low-to-middle per

capita income.

Such as the East Asian Tigers of the 1980s (South Korea,Singapore, Hong Kong, and Taiwan), were emerging

because they were becoming significant players in the

modern global economy.

in 2001, Goldman Sachs singled out Brazil, Russia, India,and China - the BRICs - as countries that, because of their

increased global clout.


5/27

BRIC

An emerging marketis a nation with social or business

activity in the process of rapid growth and industrialization.

The economies of Brazil, Russia, India and China are

considered to be the largest. According to The Economistmany people find the term outdated, but no new term has

yet to gain much traction.


6/27

WELCOME TO BRAZIL

Largest and most popular country in South America.

5th largest country geographical area 8.5 million km2.

4th most populous democracy in the world.

Top 5 investment destination.

12% of worldsfresh water is with them.

Has fertile soil for farming & good access to ports for trading.

5th most populated country

193.9 m people in 2012 50 years

72.7 million in 1960 Change 167%

Population growth rate 0.9% annual change (2011)


7/27

STUCK IN THE MUD

Colonialism:

22April 1500 -7 Sep 1822 A.D

Royal system:

1822-1889

Autocratic Governments:

1889-1985


8/27

ON ITS WAY UP

1982 - IMF loan (focus on industrialization).

1985 - military regime over.

1989 - Fernando Collor de Mello.

A liberal international trade regime (i.e., lower barriers

to imports) and privatized many state-owned businesses

the first in a decade of reform that set the stage for Brazils

current growth and wage freezes, price freezes, and a fixed

exchange rate. Inflation (45%) continued to be a problemuntil 1994.

1994 - Fernando Henrique Cardoso (The Real Plan).


9/27

EMERGING OF BRAZIL

The Real Plan

The Plan introduced a new currency (the Real), de-indexed the economy (prices were no longer hooked to therate of inflation), tightened monetary policy, introduced a

managed floating exchange rate regime, and increasedtaxes. There were also provisions to lower tariff barriers forforeign importers whose competition, in theory, wouldprevent Brazilian monopolies and oligopolies from raisingprices unilaterally. Tariffs ultimately fell from an average of

51% in 1988 to 14% in 1994.It was also successful in raising the standard of livingthroughout the country by lowering inflation from 45% in1994 to less than 1% in two years.


10/27

EMERGING OF BRAZIL

1999 - Real Crisis

2002Lula

Very liberal and appease foreign investors

protect private property

assert fiscal discipline

increasing tax collection

Interest rates fell to 6%

Higher capitalization standards protected banks

Public sector revenues were rising money to pay debts

Increased agricultural production kept food prices stable


11/27


12/27

BRAZIL IS BEING DYNAMIC

Four main policies have played, and continue to play, an

important role in pushing Brazil forward:

1) its emphasis on building the infrastructure necessary to

support a diverse and fully developed economy.2) a commitment to reducing poverty and inequality to

ensure the maximum number of citizens can contribute to

economic growth.

3) an increasing openness to the world.4) its movement to reform domestic institutions to foster

efficiency.


13/27

IMPORTANT SECTORS

Contribution to GDP Labor force employment

Agriculture (5.4%) (20%)Services Industry (67.2%) (66%)

Banking Industry

Manufacturing industry (27.4%) (14%)


14/27

AGRICULTURE

2ndsoya beans producer & #1 exporter.

1stCoffee producer & #1 exporter.

Major other products: Sugarcane, potatoes, cocoa,

peanuts, Rice, beef, Cattle, pork, Oranges, Wheat, DryBeans, Cotton, Tomatoes

Sugarcane :- contributes US $ 36 billion to Brazils GDP.

GDP: 5.4%


15/27

MANUFACTURING INDUSTRY


16/27

NATURAL RESOURCES

2ndEthanol (fuel) producer .

4thTimber producer .

3rdLargest iron producer & 4thLargest iron reserve.

3rdLargest manganese Reserve & 6th Largest producer .

Reserves of Iron ore, Bauxite, Nickel, Granite, limestone,

clay, sand, tin, Gold, platinum, Uranium, Gems, Petroleum,

Phosphates, Timber.

Amazon River (Roots of trade, Hydro electric power, easy

access to brazil).

Rain Forest (Rubber, gloves, mattresses).


17/27

GREEN ENERGY


18/27

PHARMA MARKET


19/27

EXPORTS & IMPORTS

Brazils 60% exports are manufactured and semi-

manufactured goods.

The total value of Brazils exports are.US$199.7 billion.

Brazil primarily exports electronics, soybeans, footwear,transport equipments, automotive parts and coffee.

The total value of Brazils imports are US$187.7 billion.

Brazil primarily imported chemical products, machinery,

oil, and transportation equipments.


20/27

INCOME PER CAPITA

According to the World Bank data, the average per capitaincome for the period 2008-2012 was:

Period 2008 2009 2010 2011 2012Brazil 8,623 8,373 10,978 12578 11340

The average per capita income of Brazil increased.

Revenues $911.4 billion (2012 est.)

Expenses $846.6 billion (2012 est.)


21/27

GDP

GDP per capita $12,789 (2013)


22/27

GDP GROWTH RATE


23/27

TOP 5 INVESTMENT

DESTINATION


24/27

4THLARGEST ECONOMY BY

2050


25/27

WHY ISNT BRZAIL THERE

YET?!

The most commonly mentioned problems Brazil faces are:

1) policy failures that inhibit economic activity.

2) a cumbersome regulatory and legal framework that

limits efficiency.3) excessive inequality that prevents full and equal

economic participation for all Brazilians.

4) external factors that inhibit Brazilian economic interests.


26/27

WINDIND UP

Brazil has come a long way since its days as home to the

Western Hemispheres lowest GDP per capita. The prudent

leadership of Presidents Fernando Henrique Cardoso and

Luiz Incio Lula da Silva has resulted in quick growth,declining poverty, and an increased say in international

affairs.

Brazils goal of becoming an advanced economy has not yet

been met. It must continue to diversify its economy, reduce

regulatory and legal inhibitors to efficiency, and fight

poverty through social spending and education.


27/27

QUESTIONS/ QUERRIES

THANKYOU !

Documents

Brazil as Emerging Economy