Speech regarding how globalisation affects Brazil and their economy.

1. Brazil
Speech
Globalisation can be defined as the movement and potential movement of labour, investment,
finance, technology and trade across national borders. Increasing globalisation in recent years has
had a significant impact on the size and structure of economies around the world, including
Brazil, and the policy responses of these governments. Over recent years, the Brazilian
government has embraced globalization, while still ensuring protection for local
industries. Economic reforms have been put in place which reap the benefits of having both an
interconnected market economy and strong domestic production. However, just 30 years ago
Brazil was a military dictatorship, struggling with a debt of US$95 billion and 222% inflation
rate.
Economic growth is defined as “the increase in the capacity of an economy to produce goods and
services, compared from one period of time to another”. Recognized as a developing country,
Brazil has improved its economic performance significantly since the 1990s. After opening up its
industries, Brazil has achieved high rates of growth as well as improving its public
finances. Brazil has experienced 6.12% annual GDP growth since 1990, and proved resilient to
the external downturns of the GFC and Asian financial crises. This growth can be attributed to the
increased openness of the Brazilian economy, which has attractedincreased foreign direct
investment (FDI).
Following the Global Financial crisis of 2008, Brazil introduced a floating exchange
rate, protecting itself from future financial instability. Brazil has also built large foreign currency
reserves, a strategy implemented by emerging economies to provide a safeguard against
instability. From less than $50 million US in 2005, reserves increased to over $350 million US in
2012. Furthermore, Brazil has set a ceiling on public debt at 120% following the massive foreign
debt of the 1980’s and 1990’s.
Globalisation, particularly the trade in agricultural products, has had a profound impact on the
environment in Brazil. By 2012, soybean production alone had destroyed 21 million hectares of
the Brazilian rainforest. Deforestation of the Amazon may result in permanent and significant
biodiversity loss, as well as contributing to the ever pertinent global warming issue.
Economic development can be defined as “the sustained, concerted actions of policy makers and
communities that promote the standard of living and economic health of a specific area”. Strong
economic growth combined with successful government policies have allowed for an increased
standard of living, as well as the development of more infrastructure. Poverty has been
significantly reduced, down from 21% in 2005 to just 9% in 2009, while life expectancy has
increased from 68 years in 1995 to 74 in 2012. This is due in large part to the Government’s
recent investment in health, education and poverty reduction. The Bolsa-Familia, introduced
11 years ago, is a social welfare program designed to provide assistance to poor Brazilian
families. The scheme combats Brazil’s social disadvantage in the short term by direct cash
transfers and in the longer-term by increasing the human capital through conditional cash
transfers.
Despite these improvements, iBrazil’s poor nfrastructure,, remains an area of much concern
to its economic development. During Brazil’s struggle with inflation in the 1980s, infrastructure
was overlooked, leaving it well behind other nations. As of 2013, Brazil’s infrastructure made up
just 16% of the value of its GDP, while other advanced economies averaged 71%. At the moment,
Brazil spends just 1.5% of its annual GDP on infrastructure, and will need to triple this for the
next 20 years to catch up to the advanced economies of the world. To increase this spending, the

2. Brazilian government implement the Programa de Aceleracao do Crescimento, which aims to
stimulate private investment in the improvement of infrastructure through tax exemptions.
Historically, Brazil has been characterized as a country with high levels of inequality. However,
the increased economic growth and policy developments have meant consistent progress, shown
in the reduction of the Gini co-efficient from .6 in 2000 to .53 in 2011. During his time in power,
President Lula da Silva (dates would be good here) implemented several policies, including
the Bolsa-Familia (which I mentioned previously) and increased minimum wage rates. These are
regarded as being some of the most successful anti-poverty policies in the world. Despite this,
Brazil still ranks 12th last in the world for the Gini Index, reflected in the fact that the richest 20%
of the population hold 59% of the total wealth.
The structure of the Brazilian economy and its employment has changed since its opening
to globalisation. A lot of this change can be attributed to increased FDI and solid economic
growth.For Brazil, this FDI has been focused on improving the tertiary setor, seen in the growth
of the service industry by 10% since 1990. This is a positive sign for Brazil as more economically
advanced countries are characterized by having strong service and tertiary sectors.
Globalisation has had a profound impact on Brazil and its economy. After initial hesitation,
Brazil’s decision to embrace globalisation has resulted in significantly improved economic
growth and stability, particularly in reducing inflation and returning to budget surplus. Thanks to
the commodities boomand various government initiatives, Brazil has been able to improve social
and economic infrastructure. However, if Brazil wants to become a global economic power in the
near future, significant economic development will have to
occur to improve infrastructure, reduce inequality and improve human capital of the lower class
members of society