Brazil`s Evolution

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Short Project – John Nelson, Lucas McCloud, Meidy CandiaLeyva, Tomaso Veneroso and Zuzana Bartosova
* Economics – Brazil’s economy is world’s seventh largest and expected to
rise to fifth within the next few years.
* GDP – Average quarterly growth from 1996 -2011 was 0.80% attributed to
strong agricultural, mining, manufacturing and service sectors.
* Politics -
Active leader in various regional and international forums as
UNASUL, MERCOSUR, IMF, WTO and the UN.
* Population – Largest in Latin America - 205 million (fifth in the world).
* Resources – 8.5 million sq km, 14% world’s renewable fresh water. Home
of world’s largest rain forest, the Amazon.
* Unemployment decreased significantly. Estimated in January 2012 at 5.5%
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* Agriculture- Major sector in economic outlook. In 2004
agricultural GDP was $60.4 billion, 10% of total GDP.
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* Has world’s largest
cattle herd (170 million
animals in the livestock
sector) and is the leader
in agricultural products
(soybean).
* Has high quality land, a
developed industrialized
system, modern
agricultural practices
and a developed
information structure.
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* Brazil is the
strategic partner
in the
international
agricultural
trading scene.
* Key Trading
Partners are
European Union,
China, United
States, Argentina
and Japan.
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* Leadership – Brazil heads technology and science
in biofuels, deep sea oil production and
agricultural research.
* Poverty – Currently 28% of population continues to
live under the poverty line.
* Continued struggles with disparate income
distribution in country.
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What were the tipping points that led to Brazil’s growth?
Transformation in Politics
* Past regimes, protectionism, Latin American
ideology.
* New regime- “out with the old in with the new”.
* Non-traditional foreign affairs model, new ideas
in politics.
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What were the tipping points that led to Brazil’s growth?
Economic Strategies
* Trade Policies - Brazil is an advocate of
liberalization in agricultural trade policies.
Removed trade barriers, quotas, taxes and
export licenses.
* Domestic Agricultural Policies – PRONAF, micro
loans and minimization of stockholdings such as
(PEDRO).
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What were the tipping points that led to Brazil’s growth?
Economic Strategies Continued
* Market access battles – “Some won some
lost”.
WTO, Doha Round Trade Talk, (IBSA), G-20, G-11
* New partnerships in agricultural trade with
China, Israel, Turkey and Egypt.
Q. What should Brazil’s role be in the regional and
international arena?
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“Are the poor poorer and the rich richer?”
* Joaquin Bento de Souza’s model derived data from the 2001
Brazilian Input-Output Matrix from government figures and
the Brazilian Agricultural Census to test current and future
agricultural affairs in Brazil.
* Souza’s data confirmed majority of population 53% receives a
minor percent of total income at 16.8% while the highest
income group at 46% is comprised of only 10.9% of the
population. See table 1.
* This data according Souza placed Brazil at the worst country
in terms of income distribution in the world.
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* The impact of agriculture in alleviating poverty is key as agriculture
hires the most unskilled labor.
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* Brazil has in a context removed many of the barriers to
agricultural trade. How much more can it do?
* Per Souza’s model using Doha & NAMA agreements as
well as Tomaso’s model on animal protein and bio fuels,
interesting findings where discovered simulating a world
with no barriers to agricultural trade.
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Finding
* Severity of poverty within household incomes reduced, thus
reducing some income disparity but not in tremendous numbers.
Why?
* Both the small farmer and commercial agribusiness supplier would
see gains. But distribution would not occur in every region equally.
* Strong increases in food prices would offset gains made.
* World population derives the bulk of protein from meat with an
inevitable rising price in staple foods and inevitable increases in
poverty (soy bean case).
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Recommendations for Brazil
* Support domestic policies to promote agriculture and make
investments in the education of its domestic workforce to
compete in technologically advanced agri-sectors.
* Continue to develop new relationships in agricultural trade.
Diplomatically seek to continue removing market barriers
imposed by nations like the Japan, US and EU.
* Increase governmental support in the form of credit and
investment, so small scale producers can increase their
productivity to meet rising demand for goods.
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Recommendations for Brazil
* Continue to pursue great investments and strategic relationships in
ethanol and biofuels. Even though skilled labor is highly demanded
in this sector, investments will not necessarily address income
disparities in the long run in Brazil.
* In long term, overall agricultural trade liberalization is overstated,
while the cost to small scale farmers in developing countries is
often high.
* Our Long Project will dive further into the world of Brazilian
ethanol, Biofuels, sugar production and climate change in Brazil.
Stay tuned….
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