GLOBALIZATION IN BRAZIL
Geographies of Globalization – GEO1-3802 30th June 2011
Brazil is the fifth largest country in the world, population and geographical wise. The country, however, is still a developing country. Being plagued with several economic crises, and astronomically high inflation rates the economic situation of Brazil over the years has been far from good. As economic globalization is becoming a more and more important phenomenon in the economic world, we are going to look at economic globalization in Brazil, and especially on the effects it has had, and still has on the country. We are going to do this by first explaining the many different political and economic reformations that have happened in the country in the last 26 years. We divided these 26 years over the period 1985 to 2002 and the period 2003 until now. Why we do this will be explained in the corresponding sections. Following these two sections will be a short summary of the different reformations made in the 2 covered periods that have an influence on globalization. The next section will cover the current economic state of Brazil, and will compare it to the past 26 years. Where necessary we explain what and why things happened that can be seen in the provided graphs and data. The section thereafter will combine the previous two sections by explaining the effect globalization has had on the country, and especially different regions within the country. We do this by looking at the concentration of economic activity within the country and by looking at the income distribution within the country. Finally we will summarize and thereby answer our main question: What was and still is the effect of economic globalization on Brazil?
Brazil from 1985 to 2002
The years covered in this chapter are characterized by inflation, and the economic stabilization plans aimed at reducing it. The period has had several presidents, and even more economic stabilization plans. Some describe the period as having the same pattern over and over again, with a new president introducing a new plan. That plan would then fail, causing the president to be replaced the next election. This would then repeat. Figure 1 shows five of the different stabilization plans introduced in this period, and the effect they had on inflation within the first 11 months after their introduction. The following sub-chapters will cover different stabilization plans and their corresponding presidents.
Political reformation and President José Sarney In 1985 the military regime that had been ruling Brazil since 1964 fell. The country proceeded with forming a civilian government, and voted for Tancrado Neves to be president of Brazil. Neves, however, was never to become a real president due to becoming sick, and eventually dying before even taking the presidential oath. He was succeeded by José Sarney, the former vice-president whom had taken over the presidential tasks when Neves got sick. The sitting government still had the burdens caused by the military regime. The 5 years following 1985 are therefore also called transitional years.
As Nevez had wanted it, Sarney proceeded taking the steps needed to change the constitution of the country that were still based on the military regime. In 1988 Brazil adopted its new constitution, restoring civil rights and public rights like elections, freedom of speech, economic freedom and a universal health system. The constitution also divided the governing body of the country over different states, hereby decentralizing the government.
This caused for great fragmentation of the Brazillian state, causing the autonomy and institutional capacity of Brazil to diminish even further than when it was under military rule. Clientelism also increased under the Sarney regime. Given the poverty and low educational level of many voters the distribution of small-scale benefits continued to yield considerable electoral dividends. As traditional...
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