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Brazilian Economic Systems Strengths/Weaknesses

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Economic Strengths Edit

The most highly developed country out of all the South American countries, in regards to economics, is Brazil. Brazils auto industry is hiring large numbers of people and numerous computer companies where there are many industrial jobs being taken faster than the amount of jobs being offered. Brazil has a gross domestic product (GDP) of more than $1.838 trillion in purchasing power parity [1], and this is divided into 3 sections; agriculture, industry, and services. Brazils agriculture is about 5.1% of the GDP, including the export of cocoa, cotton, rice, sugarcane, corn, soybeans, and wheat. Brazil is also one of the largest exporters of lemons, mangoes, tangerines, guavas, and tobacco [2]. The development in export crops helped Brazil expand into one of the world's largest soybean and cellulose exporters. The top three export partners are the United States, Argentina, and China. Brazils industry counts for about 30.8% of the GDP and includes iron and steel production, automobile assembly, petroleum processing, chemicals production, and cement making [3]. Brazil mines and purifies petroleum with its 13 oil refineries and the ability to produce around 1,786,000 barrels per day [4].

Commerce, transportation, communications, finance, and professional services make up the service sector consisting of about 64% of Brazils GDP [5]. Brazil benefits from imports including machinery, electrical and transport equipment, chemical products, oil, and automotive parts.

Economic Weaknesses Edit

With a population of about 190 million people, 31% of the population is under the poverty line, many of these individuals being children [6]. The reason for this is because Brazil has such a large population. More than 70 percent of these (agriculture) workers lack contracts and social benefits and less than 40 percent are employed year round. There are also 4.8 million landless families who survive as tenant farmers, sharecroppers, and casual laborers [7]. Of the adults who fall under the line, the reason is closely related to the unemployment rate, which is at 9.8% [8]. One reason for a drop in the unemployment rate is because towards the end of the year companies hire temporary workers for the holidays but then are let go after the holiday season is over [9]. Domestic debt is a dilemma in Brazils economy. Debts went up from 1994 to 2003, but were controlled in 2006. The president, Luiz Incio Lula da Silva introduced economic programs to help maintain taxes and strengthen public investment [10]. The debt in 1995 was around US$213 billion, 36.8% of GDP [11] . The domestic debt is now around US$230.3 billion [12]. Inequality is another major problem in Brazil as a result of the large population. The wages paid are significantly lower than other countries because of the labor surplus. One solution to Brazils high poverty level and inequality is globalization. Companies, either inside or outside of Brazil, could start to invest in constructing factories to help maximize their revenue and to provide more jobs to people. Another solution is that companies who trade with the U.S. will have a less taxes or tariffs to pay if globalization succeeds.
http://www.time.com/time/magazine/article/0,9171,895429,00.html

Covering nearly half the surface of South America, and with half the continent's 140 million population, Brazil was the world's fourth largest nation (after Russia, China, Canada) until the U.S. added Alaska. With no deserts, tundra or rugged mountains, the nation is 80% rolling plateau, has the third greatest expanse of arable land on earth, more than all of Europe. But Brazil's potential is not yet scratched: It has the world's greatest hydroelectric potential, some 80 million kw.; yet installed capacity so far is only 5,000,000 kw., not quite enough to light the New York City area. With 16% of the world's forests, Brazil exports $90 million worth of pine a year with little effort, soon will produce all its own pulp and paper. But the Amazon's magnificent hardwoods (300 varieties v. 70 in the U.S.) rot on the forest floor, and its 600 varieties of palm trees, source of fiber, sacking, fuel, cattle feed and oilsstand unused. More than 1,800 kinds of edible fish swarm in Brazil's waters, but Brazilians still open Portuguese sardine tins, and they imported tuna until last year.

 Rubber is native to Brazil, which has some 600 million trees growing wild. The potential is more than 600,000 tons of natural rubber a year. Yet only 20,000 tons are tapped, and Brazil is building two petrochemical plants to cut its needs for imports of $40 million worth of Asian rubber a year. The world's greatest iron deposits push through Brazilian earth in mountains of solid ore65 billion tons, 35% of the world's total reserves, much of it the 60% hematite that steelmen call "filet mignon." Bauxite reserves run to hundreds of millions of tons, and are economically close to cheap power sites, but Kaiser and Reynolds development projects were vetoed by strident nationalism ("The aluminum is ours!"). The Amazon and Paran are two of the world's largest sedimentary basinstogether nearly 2,000,000 sq. mi. But of potential oceans of oil, only traces have been found; last year Brazil produced only 30% of its requirements from an old field at Bahia. With soil so rich that almost any crop will grow, Brazil is potentially one of the world's greatest agricultural nations. It exports cognac, champagne and wine to Argentina, the U.S. and Europeincluding 30 million liters last year to France. It is the world's No. 1 producer and exporter of coffee, ranks seventh in soybeans and rice; sixth in tomatoes, sweet potatoes and peanuts; fifth in jute; fourth in tobacco and cotton; second in sisal, cane sugar, cacao, corn, oranges. Yet its agricultural technology is primitive and its export potentiality (it grows more bananas and pineapple than any other country, but exports little) is barely tapped.

Read more: http://www.time.com/time/magazine/article/0,9171,895429,00.html#ixzz15u39hrIC

Information Technology in Brazil

Overall Analysis

Brazil is one of the most beautiful and interesting countries on Earth. They are an incredible people, who love life and enjoy every second of it. From time to time, the nation goes through a period of turmoil, from which the country always bounces back. There are many great features of the nation, as well as many issues that have yet to be resolved. Information Technology is just one part of economy for this huge country. The majority of the focus is put onto the companies involved in exporting the vast raw materials the land holds. The "new economy" is just emerging inside of Brazil. And in this new economy Brazil may eventually become a major player. The journey starts here.
Strengths

Brazil's biggest strengths in relation to Information

Technology are in the education of the people. Brazil offers excellent opportunities for gaining education. There are many great universities and secondary schools. (See IT Workforce). The federal government has come a long way to introduce and encourage usage of Information Technology. The Brazilian e-government website is a great example. This website rivals most other nations in functionality and features. (See EGovernment). Information Technology Clusters have also started for form. Some of these clusters are focusing on the great education in the local areas such as Rio de Janeiro. (See IT Geographics). These clusters will serve as a catalyst for research and development in the nation. They also attract foreign direct investment.
Weaknesses

On the negative side of things, Brazil has many issues to resolve before it can become a fully developed country. There are many pressing social issues that need to be worked on before the public will embrace major technological advancement. One of these issues is widespread poverty. Brazil is known for its stretching slums called favelas. These favelas are where millions of Brazilians live with little running water and electricity. This issue in itself creates a major internal battle in the country to provide economic funding for people living below the poverty line. The nation has also underwent many political changes that have made many good and bad choices on how to development and acquire foreign investment. (See National ICT Policy). This adds to the notion that Brazil is another Latin American country that is plagued by inflation and political instability.

There is also some evidence that much of the venture capital money that was used to expand the telecommunications infrastructure in the late 1990s is now gone. There is still FDI available but it is much more scarce today. (See IT Financing).