The Brazilian Government

Topics: Brazil, Tax, Luiz Inácio Lula da Silva Pages: 9 (3413 words) Published: July 11, 2008
Brazil entered the new millennium mired in economic difficulties. Macroeconomic conditions will have a great influence on political stability, what kinds of laws are passed, the ability of businesses to succeed, the pace at which new technology is used, the availability of jobs, and on incomes, poverty and crime. Brazil is a constitutional republic of federated states, the federal districts, and territories. This present constitution was proclaimed in October 1988, replacing a 1969 document. The states of Brazil have their own government with the powers in all matters not specifically reserved for the Brazilian government. The 1988 constitution abolished the national Security Law, which had been used to stifle political disagreement; outlaws torture. The National Security Law provided for various forms of popular voting, initiatives, and referendums; forbids virtually all forms of censorship; guarantees privacy rights and extends the right to strike to all workers. The military retains its power to intervene in the political system to preserve law and order. Brazil has long been recognized for its large population, great natural resources, bold ideas and potential for growth. It has made progress in economic adjustment over the last several years, opening trade, reducing inflation, succeeding with privatization and garnering investor confidence. However, there have been concerns inside and outside of the country about government finances and especially public pensions, political stability and political will, vulnerability to international economic and financial developments and to the return of high inflation, relatively low investment in export industries, and the social and political consequences of income inequality. Several studies on Brazilian public opinion towards this country's vulnerability and its domestic stability prove there is consensus that vulnerability is an impeding factor to the country's aspiration to a more strategic place among the world powers. The Brazilian elite views the interests of their country and those of the U.S. as essentially incompatible. During the Expansion of 1600’s, Gold was discovered. Brazil’s other natural resources are bauxite, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum, hydropower, and timber. General Electric is among the many powerful transnational corporations and UE employers with factories in Brazil. Economy overview is possessing large and well-developed agricultural, mining, manufacturing and service sectors, Brazil’s economy outweighs that of all other South American countries and is expanding its presence in world markets. The maintenance of large current account deficits via capital account surpluses became problematic as investors became more risk averse to emerging market exposure as a consequence of the Asian financial crisis in 1997 and the Russian bond default in August 1998. After crafting a fiscal adjustment program and pledging progress on structural reform, Brazil received a $41.5 billion IMF led international support program in November 1998. In January 1999, Brazilian Central Bank announces that the real would no longer be pegged to the US dollar. This devaluation helped moderate the downturn in economic growth in 1999 that investors had expressed concerns about over the summer of 1998, and the country posted moderate GDP growth. Economic growth slowed considerably in 2001-2002 to less than 2% because of a slowdown in major markets and the hiking of interest rates by Central Bank to combat inflationary pressures. Poor economic conditions may lead to resistance to external cultural influences, while improvement may mean greater acceptance of practices associated with success in other nations and more interaction with cultures that differ in behavior or values. Economic recovery and growth may ease the difficulties of restructuring business and public affairs and opening markets to competition. It may lead to...
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