Brazil: National Context

Topics: Macroeconomics, Investment, Tax Pages: 10 (3652 words) Published: October 8, 1999
GeographyBrazil occupies almost one-half of the entire South America continent, and is the fifth largest country in the world. It borders all Latin American countries except Chile and Ecuador. The 9,170km coastline and the 50,000km navigable inland waterways provide great potentials for water transportation which has not been well developed. Brazil is topographically relatively flat. 40% of the land is under the Amazon Rain Forest. Most of the arable land is found in the South, but the process of land development for agriculture is pushing into the Central-West and the North as well. The climate is mainly tropical and sub-tropical, and is particularly humid and rainy in the Amazon region and along the coast. Temperate climate is found in the south and on the higher lands. The nation is free from earthquakes, hurricanes and cyclones, but rainstorms, drought and frost occasionally cause considerable damage. Demography and Social PatternsPopulation is around 155 million and growing at about 2% per year. It is concentrated in the southern states of Minas Gerais, Sao Paulo, and Parana. Almost 60% of the total population live on 20% of the land.(See Table 1) 80% of the population is urban and 20% are rural dwellers. 55% is under 20 years of age and less than 10% is over 60. The average life expectancy is 63 years old. The majority of Brazilians are of European or African descent. Besides the original Portuguese settlers, other significant ethnic groups include Africans, Germans, Italians, and Japanese. The official language is Portuguese, but English is widely used in the business community. The predominant religion is Roman Catholicism. There is religious freedom, and religion is not a source of social unrest. The general level of education requires much improvement. About 75% of children above ten years old are considered to be literate. Around 5% of enrolled students go on to higher education. As a result, most of the labor force are semiskilled or unskilled. There is a shortage of managerial, supervisory, and technical personnel. Living StandardsThe gross domestic product(GDP) per capita in 1993 was about US$3,000 per annum. There exists a wide income gap, with '1% of population stinking rich, 20% stinking poor'. 10 million families are roofless, while the 12 million homeless peasants seek shelters in peasant squatters in the countryside where land is so unequally distributed. Substantial funding are needed for public housing, health care, schools, and infrastructure. Other major social problems include violent crime and corruption. ResourcesBrazil is rich in natural resources. It has some of the largest iron ore deposits in the world and is now one of the biggest gold producers. Other metals and minerals are also mined on an increasing scale.(See Table 2) The extensive river system provides great hydroelectric potential, as evident in the Itaipu dam project. Since the oil crisis in the 70s, Brazil embarked upon the ProAlcohol program for alcohol fuel manufacture from sugar cane to reduce the country's reliance on foreign oil. As for agriculture, Brazil is a major exporter of soybeans and orange juice in addition to the traditional coffee and cocoa. The fishing potential along the coastline is significant but has not been fully exploited.(See Table 3) The natural scenery and favorable climate also foster a prosperous tourist industry. Political Climate and ForcesBrazil remained a Portuguese colony for more than 300 years until it became a republic(Federative Republic of Brazil)in 1889. The latest Constitution was promulgated in 1988, and it is still under review. Brazil is composed of 27 states and the Federal District of Brasilia, the capital city. The states are divided into municipalities, which are further divided into districts. The federal government consists of three branches: the executive,...

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