Brazil Country Analysis

Topics: Brazil, Automotive industry, Poverty Pages: 5 (1508 words) Published: January 20, 2011
Historical overview
After more than 300 years under Portuguese rule, Brazil gained its independency in 1822. From this time were maintaining a monarchical system of government until the abolition of slavery and the subsequent proclamation of a republic by the military in 1889. Although a republic was proclaimed, Brazil was ruled by military dictatorships. This period ended with a military coup that placed Getulio Vargas, a civilian in 1930. Until 1961 Brazil had democratically elected governments, who were making some efforts to balance the national budget and provide some social reforms (reduce living costs, increase salaries), and economic development plan. But the industrial development slowed down, the inflation was growing, prodding social unrest which resulted in frequent strikes and riots by workers and students. After a military coup in 1964, Brazil had a series of military governments. João Baptista de Oliveira Figueiredo became president in 1979 and managed a return to democracy in 1985. By the end of the military totalyitarisme there was a nationwide wave of optimism, but the political situation in the country stayed difficult for many reasons: the first democratically elected president, Neves died a few months later of his elections, in 1992 le president Collor de Mello had to resign because of a corruption scandal. Although the system politic was stable, Brazil faced big economical problems during the 80th and 90th. PESTEL analysis

Political System

The political system of the country is Federal Republic with three independent branches: executive legislative and judicial. The president heads the executive branch. Since 1985 le system politic is stable, the elections are democratic. There are many fiscal incentives to attract foreign investors, but the tax system is complex, there are many employee related regulations with high taxes and social charges.

Economical situation
Brazil has a well developed agricultural, mining, manufacturing and service sector and permanently expanding his presences in world markets. The infrastructure system and distribution channels are established in the industrialized areas. The privatization is in a late stage. In the 80th and 90th the country faced with big and deep economic problems. The administration system was too big, the country had too many debts and the inflation became high. The government’s actions didn’t have the adequate effects and the inflation went out of control. In 1990 the inflation rate was 30377 %. In 1995 they installed the new money the Real, and his currency was fixed to the US dollar. Because of the economical crisis and financial problems in 1999 Brazil had to let the currency float witch devaluated the real at one time with 40%. In 2002 the IFM landed $30 billion to avoid the further economic problems.

Sociological System:
The population of Brazil is almost 200 million which is the 5th biggest population in the world. The population is young, only 6,4 % is over 65 years of age, and 27% of the population is under 15. Brazil’s inequality level is still among the highest of the world. It has the worst values of income distribution: about 45 % of the national wealth is concentrated in the upper 10% of population, and the lowest 20% controls only 2,4 % of the wealth. But during the last several years, poverty reduction and income distribution indicators have dramatically improved. The full poverty rate fell from 34% of the population in 1995 to 25.6% in 2006. Although the labour force is semi-skilled and unskilled in certain developing areas, there flexibility and competitive cost is a big opportunity.

The main industry sectors in Brazil the textiles, shoes, chemicals, cement, iron, ore, steel, aircraft, motor vehicles and parts and other machinery and equipments. In South America Brazil is the leader in science and technology. The researches in the bio fuels, in agriculture, in deep-see oil production are important and...
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