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AN EMERGING ECONOMY
GROUP MEMBERS
SABINA NISAR ZAIN ALI BAKIR ABIR AFRIDI SHAMIM ORAKZAI TAHIRA HUSSAIN
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.
BRIC
An emerging market is 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 According to The Economist many people find the term outdated, but no new term has yet to gain much traction.
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 worlds fresh 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)
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 problem until 1994. 1994 - Fernando Henrique Cardoso (The Real Plan).
EMERGING OF BRAZIL
The Real Plan The Plan introduced a new currency (the Real), deindexed the economy (prices were no longer hooked to the rate of inflation), tightened monetary policy, introduced a managed floating exchange rate regime, and increased taxes. There were also provisions to lower tariff barriers for foreign importers whose competition, in theory, would prevent Brazilian monopolies and oligopolies from raising prices unilaterally. Tariffs ultimately fell from an average of 51% in 1988 to 14% in 1994. It was also successful in raising the standard of living throughout the country by lowering inflation from 45% in 1994 to less than 1% in two years.
EMERGING OF BRAZIL
1999 - Real Crisis 2002 Lula 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
IMPORTANT SECTORS
Contribution to GDP
Agriculture (5.4%) Services Industry (67.2%) Banking Industry Manufacturing industry (27.4%)
AGRICULTURE
2nd soya beans producer & #1 exporter. 1st Coffee producer & #1 exporter. Major other products: Sugarcane, potatoes, cocoa, peanuts, Rice, beef, Cattle, pork, Oranges, Wheat, Dry Beans, Cotton, Tomatoes Sugarcane :- contributes US $ 36 billion to Brazils GDP. GDP: 5.4%
MANUFACTURING INDUSTRY
NATURAL RESOURCES
2nd Ethanol (fuel) producer . 4th Timber producer . 3rd Largest iron producer & 4th Largest iron reserve. 3rd Largest 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).
GREEN ENERGY
PHARMA MARKET
Brazil primarily imported chemical products, machinery, oil, and transportation equipments.
Period Brazil
2008 8,623
2009 8,373
2010 10,978
2011 12578
2012 11340
The average per capita income of Brazil increased. Revenues $911.4 billion (2012 est.) Expenses $846.6 billion (2012 est.)
GDP
GDP per capita $12,789 (2013)
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.
QUESTIONS/ QUERRIES
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