1. DEVELOPMENT EXPERIENCE
By:
Adrita Bagchi
Aishwarya Jain
Jahnavi Ghelani
Shweta Varma
Vidhi Jain

2. BRAZIL

3. STRUCTURE OF BRAZILIAN
ECONOMY UPTO 1980

4. T
I
Early 1950
M 1957-62
E
1974-80
1968-73
L
I
N
E
1945-47
1840 -1930
1822
Late 1930
1500
1700 1807 Early
1930

5. 1500
 Colonized by Portugal
 Sugar first major export product.
 Cattle industry developed
1700
 Precious metals discovered.
1807
 Napoleon occupied Portugal

6. 1822
 Independence achieved.
 Population – 3.9 million
 Coffee accounted for 19% of total exports in 1821-30 which
increased to 63% in 1891.
Year Decadal coffee exports (1000 bags
each of 60 kg)
1821-30 3178
1831-40 10430
1841-50 18367
1851-60 27339
1861-70 29103
1871-80 32569
1881-90 51631
Source: Prada Junior, Historia, p.160

7. 1840-1930
 Tariffs increased reaching an average of over 30% in 1844.
 Rubber exports rose from an annual average of 6000 tons in
1870s to 21000 tons in 1890s.
 Cotton exports rose by 73% in 1850-1900.
 Irregular expansion of light industries.
 Average yearly growth of industrial output fell from 4.6%
in 1911-20 to 3% in 1920-29.

8. Early 1930
 Exports fell from US$445.9 mn in 1929 to US$180.6 mn in
1932.
 Decline in coffee economy and an an excess capacity of coffee
production created in the 1920s.
 Terms of trade fell by 50%.
 Value of imports to decline from US$416.6mn in 1929 to
US$108.1 mn in 1932.
 Change in the role of government
Late 1930
 Output increased
 Steel capacity grew with appearance of small firms but there
was little industrial and infrastructure investment.

9. 1945-1947
 Trade liberalization was short-lived.
 Industrial production grew at an annual rate of 5.4% in 1939-45.
 In 1945, No quantitative restrictions on imports and forex freely
available for most capital transactions.
Early 1950
 the government adopted an explicit policy of import-substitution
industrialization.
 in 1953 a more flexible, multiple-exchange-rate system was
introduced.
 Imports and most exports were retained in the official market and
controlled by the CEXIM (export-import dept of the Banco do Brazil)

10. 1957-1962
 government enacted the Tariff Law of 1957.
 Advalorem tariffs increased to 150%.
 the average annual rate of growth of the GDP exceeded 7%.
 the structure of the manufacturing sector experienced
considerable change.
 In 1962, phase of intense import substitution, especially of
consumer goods, with basic industries growing at significant
but lower rates.

11. 1968-1973
 the average annual rate of growth of GDP jumped to 11.1%, led
by industry with a 13.1% average.
 personal income became more concentrated and regional
disparities became greater.
 Brazil suffered drastic reductions in its terms of trade as a
result of the 1973 oil shock.
 the price of petroleum quadrupled .
 Country’s import bill rose and trade balance changed from a
slight surplus to a deficit. Current account deficit increased.
 the rate of inflation had declined steadily
 Government expenditure as a proportion of GDP increased
from 17.1% in 1947 to 22.5% in 1973.

12. 1974-1980
 In 1979, a economic package was introduced which included
maxi-devaluation of the currency by 30%, elimination of tax
incentives and export subsidies among others.
 Between 1974 and 1980, the average annual rate of growth of real
GDP reached 6.9 percent and that of industry, 7.2 percent.
 The foreign debt rose from US$6.4 billion in 1963 to nearly
US$54 billion in 1980.
 Since 1973, a upward trend of inflation began. The rate more than
doubled from 1973 to 1974, and was in the 30-48% range in the
next 4 years. It doubled again in 1978-79 and crossed the 100%
mark in 1980.

13. JAHNAVI

14. Change in Structure of Economy

22. THE SECOND PHASE
The Plano real

23. Socio economic policies
 six key policy goals
 price stability
 efficiency of the taxation System
 provision of long-term finance
 investment in research and development
 education of the workforce
 selective investments in infrastructure

24.  enacted a series of contractionary fiscal and monetary
policies
 restricting its expenses
 raising interest rates

25. Govt’s macroeconomic policies
 achieved through tight controls of growth in
expenditures
 Vigor in generating revenues
 Throughout the first half of 2003 interest rates were
kept at very high levels as the Lula government
continued its policy of reassuring the international
community.

26.  Discovery of Tupi oilfields.
 The discoveries have made Brazil one of the world's
top 10 oil producers.

27. ECONOMIC OVERVIEW OF BRAZIL
SINCE 2002

28.  Brazil has become the sixth-largest economy in the
world.
 The economy grew at 2.7% last year.
 The Brazilian economy is now worth 2.5 trillion
dollars (£1.6 tn).

29.  In 2010 the Brazilian economy expanded by
7.5%.While it slowed to expected growth of 3.5% in
2011, this was caused by external factors, primarily the
financial crisis in the Eurozone hitting the wider
economy.
 The currency, Brazilian real, fell 11% against the US
dollar last year. That is after two years of huge gains -
up 5% in 2010 and 34% in 2009.

30. GDP GROWTH RATE OVER THE YEARS

33.  However, the country still struggles with inequality.
The country's Gini coefficient, a measure of income
inequality, peaked at 0.61 in 1990 - but 2010's figure
was a historic low of 0.53.
 There has been a rise of a new middle class, whose
purchasing power has been fuelling Brazil's continuous
economic growth amid declining industrial output and
weak global economic activity

34.  The country’s interest rates are among the world’s
highest for a large economy. Currently Brazil is
changing this policy and has cut its interest rates seven
times in the past year to a record low of 9%.
 With substantial oil and gas reserves continuing to be
discovered off Brazil's coast in recent years, the
country is now the world's ninth largest oil
producer, and the government wishes to ultimately
enter the top 5.
 Brazil is today the world’s third-largest exporter of
agricultural goods.

35. MACROECONOMIC INDICATORS
GDP (current US$) - 2.4 trillion dollars
Income level - Upper middle income
Per Capita Income – US$ 11,500
Exchange rate - 1 Brazil real (BRL) = 0.492053 U.S.
dollars or 1 USD = 2.032 BRL
Current interest rates – 8.5%
Inflation rate – 4.92%
Population – 195 million

36. References
 http://www.mapsofworld.com/brazil/economy/history.
html
 http://www.bbportuguese.com/economic-history-of-
brazil.html
 The Brazilian Economy by Werner Baer
 http://data.worldbank.orgWorld Bank data 2012
 http://www.oecdobserver.org/news/archivestory.php/ai
d/1582/Brazil_92s_Economy.html
 http://www.bbc.co.uk/news/business
 http://www.business.illinois.edu/Working_Papers/pape
rs/05-0108.pdf

37. THANK YOU