Sustainable Growth
After being discovered by Portugal in 1500, it was only in 1808 that Brazil obtained a permit from the Portuguese colonial government to set up its first factories and manufacturers.
In the 21st century, Brazil reached the status of 8th largest economy in the world. Originally, the export list was basic raw and primary goods, such as sugar, rubber and gold. Today, 84 percent of exports consists of manufactured and semi-manufactured products.
The period of great economic transformation and growth occurred between 1875 and 1975.
In the last decade, domestic production increased by 32.3 percent and agribusiness (agriculture and cattle-raising), which grew by 47 percent or 3.6 percent per year, was the most dynamic sector — even after having weathered international crises that demanded constant adjustments to the Brazilian economy.
The Brazilian government also launched a program for economic development acceleration called Programa de Aceleração do Crescimento, aiming to spur growth.
Brazil’s transparency ranking status in the international world is 75th according to Transparency International. It is equal with Colombia, Peru and Suriname.
Control and Reform
Among measures recently adopted in order to balance the economy, Brazil carried out reforms to its Social security (state and retirement pensions) and Tax systems. These changes brought with them a noteworthy addition: a Law of Fiscal Responsibility which controls public expenditure by the Executive Branches at federal, state and municipal levels.
At the same time, investments were made towards administration efficiency and policies were created to encourage exports, industry and trade, thus creating “windows of opportunity” for local and international investors and producers.
With these alterations in place, Brazil has reduced its vulnerability: it doesn’t import the oil it consumes; it has halved its domestic debt through exchange rate-linked certificates and has seen exports grow, on average, by 20% a year.
The exchange rate does not put pressure on the industrial sector or inflation (at 4% a year), and does away with the possibility of a liquidity crisis. As a result, the country, after 12 years, has achieved a positive balance in the accounts which measure exports/imports, plus interest payments, services and overseas payment. Thus, respected economists say that the country won’t be deeply affected by the current world economic crisis.
Consistent Policies
Support for the productive sector has been simplified at all levels; active and independent, Congress and the Judiciary Branch carry out the evaluation of rules and regulations.
Among the main measures taken to stimulate the economy are the reduction of up to 30 percent on Manufactured Products Tax (IPI), and the investment of $8 billion on road cargo transportation fleets, thus improving distribution logistics. Further resources guarantee the propagation of business and information telecenters.
The Policy for Industry, Technology and Foreign Trade, at the forefront of this sector, for its part, invests $19.5 billion in specific sectors, following the example of the software and semiconductor, pharmaceutical and medicine product, and capital goods sectors.
Mergers & Acquisitions
Between 1993 and 2010, 7.012 mergers & acquisitions with a total known value of $707 billion USD with the involvement of Brazilian firms have been announced.
The year 2010 was a new record in terms of value with $115 bn. of transactions. The largest transaction with involvement of Brazilian companies has been: Cia Vale do Rio Doce acquired Inco in a tender offer valued at $18.9 billions.
Income in Brazil
The minimum wage set for the year of 2011 is R$7,080.00 or R$545 per month plus an additional 13th salary in second half of December. The GDP per capita in 2008 was $10,465.
The median income of the ministers of Supreme Federal Court is more than R$ 300,000. The city of Araporã, Minas Gerais, has the largest median income of Brazil, R$ 260,000.