BRAZIL: KEY FACTS

Brazil Overview:

  • Brazil is the dominant country in South America, accounting for slightly more than half of the continent’s total population and GDP.
  • Brazil’s economy has had a history of boom and bust periods that have held back economic growth in recent decades.
  • In recent years, Brazil’s political and business sectors have been rocked by a series of massive corruption scandals.
  • Brazil is home to the Amazon Rainforest, the largest rainforest in the world.

 

Key Facts and Data:

 

  • Official Name – Federative Republic of Brazil
  • Capital – Brasilia
  • Government Type – Federative republic
  • Head of State and Government – President Michel Temer (since 2016)
  • Population – 205,824,000
  • Land Area – 8,456,510 sq. km
  • Total GDP (US$) – $1,770 billion • Per Capita GDP at PPP (US$) – $15,496
  • Currency – Brazilian real

 

Table of Contents

Current Events

 

  • Recent Political Events
  • Recent Economic Events
  • Other Recent Events

 

Political Outlook:

  • Overview of the Current Government
  • Leadership Profile
  • Summary of the Most Recent Elections
  • Leading Political Parties
  • Forecast for the Next Elections
  • International Relations Outlook
  • Potential Conflicts
  • Military Capabilities
  • Key Political Issues
  • Political Risk Outlook

 

Economic Outlook:

  • Economic Overview
  • GDP Growth Forecasts
  • Key Sector Forecasts
  • Inflation Forecasts
  • Foreign Trade Forecasts
  • Foreign Investment Forecasts
  • Exchange Rate Forecasts
  • Outlook for Key Sector
  • Key Economic Issues
  • Economic Risk Outlook

 

Demographic & Environmental Outlook:

  • Population Overview
  • Population Characteristics
  • Development of Leading Urban Centers
  • Key Demographic Issue
  • Topography and Climate Overview
  • Environmental Threat Summary
  • Key Environmental Issues
  • Demographic and Environmental Risk Outlook

 

Current Events and Recent Changes Overview

 

Key Political Events and Changes:

 

  • President Temer’s approval rating doubled in polls taken in early 2018. However, it remained the lowest of any world leader at just 6%.
  • In late 2017, the Congress once again voted against putting President Temer on trial to face charges of corruption. The vote was 233 in favor of putting the president on trial, and 251 against, as supporters of the president remain in control of the Congress.
  • In January 2018, Brazilian police called on President Temer to answer 50 questions regarding an investigation into alleged corruption linked to bribes made in order to change regulations governing the country’s ports.
  • A federal judge announced that the massive Car Wash investigation that has spread to so many of Brazil’s leading politicians, businesses and public figures was nearly over.
  • President Temer began to reshuffle his cabinet. This move was due to the fact that one of the parties in the coalition government, the centrist PSDB party, began to withdraw its members from the cabinet due to President Temer’s record-low approval rating.

 

Key Economic Events and Changes:

 

  • Brazil’s economy expanded by 1.4% on a year-on-year basis in the third quarter of this year, the highest rate of year-on-year growth in Latin America’s largest economy since early 2014.
  • Economic output in Brazil is not forecast to return to 2013 levels until at least 2021.
  • Brazil’s inflation rate rose slightly to 3.0% year-on-year in December 2017.
  • The country’s central bank cut interest rates by 50 basis points to 7.0% in December 2017.
  • The unemployment rate in Brazil fell to 12.0% in November 2017.
  • Fears continued to rise in recent months over the declining likelihood that the government will be able, or willing, to make major reforms to Brazil’s costly retirement system. These fears have been stoked by Brazil’s upcoming presidential election later this year and the very low levels of support for current government. As a result, investors are growing concerned about the state of Brazil’s financial health.

 

Key Economic Issue (part one): Can Brazil Bounce Back?

Summary – In recent years, no large economy has performed worse than Brazil, a country that has just now emerged from a devastating recession that began ten quarters ago.  In all sectors of the Brazilian economy, confidence levels have been at rock bottom, battered by Brazil’s endless corruption scandals and a business climate adversely impacted by a series of negative internal and external factors. Furthermore, while Brazil has managed to finally pull out of its long recession, there are many concerns still facing the Brazilian economy.  Add to this mix the dysfunctional nature of Brazilian politics, and it is clear that any recovery for the Brazilian economy will be tentative at best, and possibly even short-lived.  This is a far cry from the soaring rates of economic growth that Brazil was able to record in the early years of this decade, a time when Brazil believed that it was on the verge of recording China-like long-term rates of economic growth.  Now, any growth in Brazil is welcome news, and a sustained recovery is certainly not assured.

A Major Recession The numbers from Brazil’s recent recession are truly staggering, given the fact that there was not a worldwide crisis at the same time.  Between the start of 2015 and the beginning of this year, the Brazilian economy contracted by more than 8%, a worse performance than any other large economy, including recession-hit Russia.  Since early 2014, Brazil’s economy has contracted by an even worse 10%.  In fact, while most emerging markets outside of Asia struggled over the past few years, few of them approached the scale of the downturn seen in Brazil.  So far this year, growth has managed to return to Brazil, but year-on-year growth rose to just 0.3 in the second quarter of this year, the first time this figure was positive since early 2014.  These poor results have battered the already fragile confidence in the Brazilian economy and the sluggish recovery has done little to boost this confidence.  Only the recent run of higher foreign investment inflows has done anything to boost the weak Brazilian economy, but internal confidence levels will need to rise for Brazil to make a full and sustained recovery.

 

Key Economic Issue (part two): Can Brazil Bounce Back?

Many Reasons for Brazil’s Struggles A number of factors have resulted in Brazil’s poor economic performance in recent years.  First and foremost, Brazil’s level of economic competitiveness fell precipitously over the past two decades, particularly when compared with China and other emerging markets in Asia.  Even within Latin America, Brazil’s competitiveness has waned.  For example, Mexico’s level of economic competitiveness improved markedly against that of Brazil in recent decades, resulting in Mexico winning much of the foreign investment in manufacturing that used to go to Brazil.  Furthermore, Brazil was adversely impacted by the sharp decline in commodity prices in recent years, as much of the growth recorded earlier in the decade was the result of soaring food and mineral prices that followed a surge in demand for such commodities in Asian markets, particularly China.  Add to these factors the fact that the Latin American market has not grown as fast as had been hoped for and it is easy to see why foreign investment levels in Brazil have largely disappointed in recent years.  When all of these factors combined to weaken Brazil’s economic growth potential, confidence levels plunged.  When the scale of Brazilian government’s corruption scandals and economic mismanagement became apparent, consumer, business and investor confidence levels fell through the floor.

A Difficult Recovery For Brazil’s economy, it appears that the worst is over and that growth is set to return, and to accelerate somewhat over the course of the next couple of years.  However, this recovery appears to be weak at best, with growth forecasts showing that it will take three to four years before Brazil’s economic output rises to the level that it reached prior to the recent recession.  This is due to the fact that all of the factors that contributed to the deep recession in Brazil remain in place, and none of them will be remedied over a short period of time.  Furthermore, the process of improving Brazil’s economic competitiveness and removing the pervasive corruption found throughout the country’s political and business systems will be long and difficult.  As a result, we are not forecasting a return to the levels of growth seen in Brazil in the early part of this decade at any point in the next few years.  Instead, Brazil will be faced with a period of relatively sluggish growth, resulting in the country falling further behind many of its emerging market competitors.  This growth will be disappointing for a country that was, not long ago, hoping to be the next fast-growing giant emerging market, and this disappointment could fuel political and social unrest in the years to come.

 

Other Key Events and Changes:

  • In January 2018, the World Health Organization (WHO) warned travelers against the risk of contracting yellow fever in the city of Sao Paulo.
  • Nine inmates were killed in a prison riot in the state of Goias in January 2018.

 

Brazil Political Outlook

 

Brazil: Current Government

Overview:

 

  • In September 2016, the Brazilian Senate voted in favor of dismissing suspended President Dilma Rousseff by a margin of 61 votes to 20 at her impeachment trial, bringing an end to 13 years of rule by the Workers’ Party. As a result of this decision, interim President Michel Temer will serve out the remainder of President Rousseff’s term in office, which is finished at the end of 2018.

 

Key Members of the Government:

  • Head of State and Government – President Michel Temer
  • Vice President – vacant
  • Minister of Foreign Affairs – Jose Serra
  • Minister of Finance – Henrique Meirelles
  • Minister of Planning, Development and Management – Dyogo Oliveira
  • Minister of Justice – Alexandre de Moraes
  • Minister of Defense – Raul Jungmann
  • Minister of Labor – Ronaldo Nogueira
  • Minister of Industry, Trade and Services – Marcos Pereira
  • Minister of the Environment – Sarney Filho

 

Profile of Suspended President Dilma Rousseff

Background:

Dilma Rousseff was elected president of Brazil in late 2010, succeeding the very popular Lula da Silva, who hand-picked her to be his successor.

  • Prior to becoming president, she served as President da Silva’s chief of staff between 2005 and 2010.
  • In 2016, President Rousseff was suspended faced impeachment proceedings as her government was engulfed by a series of corruption scandals and charges of abuse of power.

During Brazil’s military dictatorship, President Rousseff was a member of various left-wing militant groups that waged a low-level insurgency against the government.

  • She was imprisoned for two years by the military government during this period.
  • She was a founding member of the Democratic Labor Party (PDT), but left that party in 2000 and joined the more powerful Workers’ Party (PT).

 

Outlook:

President Rousseff could find herself impeached as she fights for her political life. • Prior to her impeachment hearings, her approval ratings had fallen to less than 10%.

 

Despite a weak economy and a number of corruption scandals, President Dilma Rousseff was able to win a second term in office, narrowly defeating her center-right rival, Aecio Neves.  President Rousseff’s center-left coalition also maintained its majorities in both houses of the Brazilian parliament.

 

Brazil’s Leading Political Forces: Workers ’Party (PT)

History:

The Workers’ Party and their former leader, Luiz Inácio Lula da Silva, stormed to power in the 2002 elections.

  • The party was formed in the late 1970s by autoworkers in Sao Paulo.
  • The party has led the victorious coalition to victories in each of the past four national elections.

 

Key Policies and Stances:

 

  • The elimination of poverty is the main platform upon which the entire party speaks with one voice.
  • Many in the party support a market-economy with large public services, though this is opposed by more leftist elements.
  • The party is split on the issue of economic reforms, with many directly opposing Lula’s reform attempts.

 

Outlook:

The PT remains the leading party in Brazil, despite a series of scandals and a poor performance by the Brazilian economy in recent years.

  • President Rousseff has failed to match the level of support of her mentor, but poorer Brazilians continue to back the party.

 

Brazil’s Leading Political Forces: Brazilian Democratic Movement Party (PMDB)

History:

 

The PMDB was largest opposition organization in the days of the military dictatorship.

  • The party reached the height of its success in the mid1980s, but has faded to some degree since that time.
  • The PMDB won the second-largest number of seats in the Chamber of Deputies in the past three national elections.

 

Key Policies and Stances:

  • The PMDB remains a key component of the current center left government.
  • The party lacks a true ideological foundation, therefore it is often willing to work with the government.

 

Outlook:

The PMDB also faces the challenge of dealing with the crowded middle ground of Brazilian politics. 

  • Without a true charismatic leader, the party will find it difficult to expand its popularity to new segments of Brazil’s voting population, despite its pivotal role in the legislature.

 

Brazilian Social Democratic Party (PSDB)

History:

The PSDB was founded in 1988 and has been a major player in Brazilian politics ever since. • It was the party of former President Fernando Henrique Cardoso.

  • The party remains one of Brazil’s leading parties, though many rivals have adopted many of its key stances.

 

Key Policies and Stances:

  • The party is the champion of social democratic ideals in Brazil.
  • The PSDB has also been the leading proponent of economic and political reform.
  • The party advocates a strategic role for the government in managing Brazilian economic affairs.

 

Outlook:

The crowding of the middle ground in Brazilian politics threatens the position of the PSDB, particularly as politics are becoming dominated by personalities and not parties.

  • The party remains the most powerful force on Brazil’s center-right and should remain in this position for the foreseeable future.

 

Democrats (DEM)

History:

The Democrats (formerly the Liberal Front Party) was founded in 1984 by political dissidents. • The party was one of the strongest in Brazil for most of the 1990s. • However, the Democrats have suffered major losses in support in each national election thus far in the 21st century.

 

Key Policies and Stances:

  • The Democrats are one of the most conservative of the large political parties in Brazil.
  • The party supports market reforms in Brazil and a reduced state involvement in the economy.

 

Outlook:

The Democrats future in Brazilian politics is in jeopardy due to the party’s steady loss in support over the past two decades.

  • Without a change in direction by the party, it is likely to continue to lose support.

 

Brazil: International Relations Outlook

 

Key International Disputes:

  • Despite rivalries with many of its neighbors, particularly Argentina, Brazil has been a champion of regional integration in South America.
  • Moreover, Brazil has been a champion of the expansion of Mercosur to include the countries of western South America.
  • In the meantime, it remains wary of US intentions in the region.

 

International Relations Outlook:

  • Brazil will continue to play a larger role in the affairs of Latin America and the developing world, with the government pushing Brazil to the forefront of the developing world’s negotiations with the developed world.

 

Military Spending

 

Strengths and Weaknesses

On a regional basis, Brazil is easily the most powerful country in South America.

  • However, on a global basis, Brazil’s military spending ranks only 11th in the world.
  • With no immediate threats along its borders, Brazil has not had to maintain large armed forces.

Brazilians have generally shown little interest in expanding the country’s military capabilities.

  • Moreover, the government continues to exercise relatively little control over the military.
  • Moreover, the military ruled Brazil from 1964 until 1985 and it remains relatively autonomous.

 

Outlook

With no immediate strategic threats to its security, Brazil will continue to spend only a small percentage of its fiscal budget on the military.  • However, in the long-term, future governments may decide to enhance Brazil’s standing in the world by developing greater military capabilities, particularly with regards to power projection.

 

Political Risk Outlook:

  • Despite its size and disparities, Brazil faces relatively low levels of political risk.
  • Looking ahead, political risk levels will remain at present levels, unless a major economic crisis leads to widespread opposition to the government.

 

Brazil: Economic Overview

Economic Summary:

 

Brazil’s economic had shown signs of emerging as a high-growth developing economy, but the country’s has struggled to record high levels of growth in recent years.

  • While Brazil has avoided a collapse along the lines of other Latin American countries, it has struggled to enact the reforms needed to boost its economic competitiveness.

The greatest threat to Brazil’s economy remains the country wealth disparity.

  • Vast segments of the population continue to live in absolute poverty.
  • However, a sizeable middle class is emerging in Brazil and this could provide a basis for solid growth on the domestic market.

Brazil’s size gives it a major advantage over its South American neighbors as foreign investors are finding Brazil the most attractive location in the region. 

  • Moreover, its size means that both domestic and export potentials are significant.

 

Key Wealth-Related Issues and Trends

Brazil’s per capita GDP levels are near the average for Latin America.

Brazil is home to some of the world’s greatest wealth disparities.

Poverty remains a major problem for Brazil and threatens the country’s future stability.

 

As population growth slows sharply, Brazil will have the opportunity to improve living standards for its poorer segments of society.  However, this will only be achieved through sound economic management and improvements in Brazil’s social infrastructure.

 

Brazil has some of the world’s highest rates of wealth inequality, with nearly three fourths of the country’s population living in poverty.  At the same time, Brazil has the largest upper class in Latin America, although this accounts for just a small percentage of Brazil’s population.

 

Brazil: GDP Growth Outlook

 

Current Outlook:

  • Brazil’s economy fell into a deep recession in recent years, with economic output falling by nearly 10% between 2014 and 2017.
  • A lack of export competitiveness, coupled with a collapse in confidence in Brazil’s economy, has led to this severe recession.

 

Future Outlook:

  • Economic growth has returned, but will remain relatively weak over the near-term.
  • However, Brazil’s longer-term outlook will slowly improve thanks to the growing strength of the country’s domestic market that will help to shield the country from external shocks.

 

Brazil: Key Economic Sector The Automotive Industry

Summary:

Brazil has by far the largest automotive industry in South America.

  • Argentina is the only other South American country with a sizeable auto industry.
  • Brazilian-made vehicles are shipped throughout South America.

As the South American economy struggled earlier this decade, automotive companies in Brazil looked to export more products outside of the region.

  • However, automakers have found that Brazil’s export competitiveness levels have not improved as they had originally expected.

 

Outlook:

Exports will benefit the Brazilian automotive industry in the short to mid-term. 

  • However, for the industry to thrive in the long-term, demand for automotive products must grow in South America, particularly as the industry’s investment turns increasingly to China and other emerging markets.

 

Brazil: Key Economic Sector The Steel Industry

Summary:

Brazil is the second-largest steel producer in the Americas, after the US.

  • It accounts for more than half of the steel production in South America.
  • 60% of Brazil’s steel output consists of flat products, while 40% is long products.

International steel companies continue to be very active in Brazil.

  • The world’s leading steel company, Arcelor Mittal, is a leading investor in Brazil’s steel industry.

Brazil is threatened by the growing protectionism in the steel industry.

  • Exports to the United States are the major source of growth.

 

Outlook:

Brazil’s steel industry faces an uncertain future as protectionism grows and international competition from steel producing countries such as China, South Korea and Russia increases. 

  • Moreover, South American steel consumption will grow, but not at the rate seen in other developing regions.

 

Brazil: Industrial Production Growth Outlook

Current Outlook:

  • Industrial production has trended downwards in recent years as export demand has fallen sharply and Brazilian manufacturers are not able to compete with foreign competitors

 

Future Outlook:

  • Unless the South American market for manufactured goods shows a marked improvement, industrial production growth in Brazil will remain well below its potential.
  • Nevertheless, returning growth on the domestic market will allow for an increase in manufacturing output later in the forecast period.

 

 

Manufacturing Location Rankings by in Latin America

Current Situation:

 

  • With the exception of Mexico, Latin American countries have struggled to develop major manufacturing industries that continue to expand in the 21st century.
  • A key problem facing the region is export competitiveness, due to poor infrastructures and a lack of access to key export markets.

 

Future Situation:

  • Latin America’s recent economic woes have stunted domestic market growth in the region, and this has hurt many of the region’s main manufacturing industries.
  • Moreover, with the exception of Mexico, it is unlikely that the region will be able to develop competitive export-oriented manufacturing industries in the coming years.

 

Brazil: Inflation Outlook

Current Outlook:

 

  • Inflationary pressures had been in place in 2015 and 2016, adding further downwards pressure on the embattled Brazilian economy during that period.
  • Inflation rates fell over the course of 2017 to their lowest level in more than a decade.

 

Future Outlook:

  • Barring any major shocks, inflation rates will remain under control over the remainder of the forecast period, although some upward pressures will remain.

 

Brazil: Foreign Investment

Foreign Investment Climate:

Over the past decade, Brazil has received the largest share of all of the FDI flowing into South America.

  • Brazil’s domestic market has been an attractive target for foreign investors in recent years.
  • Moreover, foreign investment has poured into many sectors involving natural resources, as demand from Asia has been a major plus for natural resource exports from Brazil.
  • Finally, successive Brazilian governments have taken major steps to liberalize the Brazilian economy and open it to more foreign investment.

 

Outlook For Future Foreign Investment:

Brazil’s size and potential will allow it to be one of the world’s leading emerging markets in terms of foreign investment attractiveness. 

  • Moreover, closer trade ties with North America in the future will lead to even more investment in export operations.
  • In the meantime, investments destined for the domestic market will rebound as the country’s economy improves.

Brazil is easily the largest recipient of foreign investment in South America, although its per capita FDI inflows are far below those of most other major emerging markets.  Chile is the region’s second-largest recipient of foreign investment and leads the region by a wide margin in terms of per capita FDI inflows.

 

Brazil: Labor Force

Labor Force Overview:

Brazil’s labor force is easily the largest in Latin America.

  • With population growth slowing and women’s participation already high, Brazil’s labor force will not grow much more.

The government has taken major steps towards improving the education and skills of the Brazilian workforce.

  • This has helped to allow the Brazilian economy to modernize and diversify.

Unemployment rates had fallen significantly until the collapse of the economy in recent years.

  • Inflation rates reached nearly 14% in recent years as Brazil remained mired in a deep recession.

 

Outlook For the Labor Force:

Brazil’s unemployment rate is likely to remain dangerously high over the near-term.

  • This situation could lead to more labor unrest that could discourage some foreign investors.

 

Fiscal Policy Overview

Current Outlook:

  • Brazil’s fiscal deficit soared in recent years as the recession led to a sharp decline in government revenues in recent years.

 

Future Outlook

  • Growing opposition to the government’s spending cuts will intensify, forcing the government to backtrack as it loses support from its more leftist elements.

 

Mercosur Trade Agreement

The Mercosur Trade Agreement is the pre-eminent trading group in South America and has four permanent members (Brazil, Argentina, Uruguay, and Paraguay). 

  • Mercosur was created in 1991 by the Treaty of Asuncion.

 Mercosur’s first expansion has come about through the possible full membership of Venezuela, who awaits full ratification by Brazil and Paraguay. 

  • In addition, an associate member status was created for Chile, Bolivia, Colombia, Ecuador, and Peru.

Mercosur is designed to boost free trade between member states, with the ultimate goal of full South American economic integration.

  • Mercosur has aimed economically to reduce the high tariffs of member countries as well as the income inequalities between the countries.
  • The agreement also tries to eliminate the technological obstacles limiting member countries from bringing products to the market.
  • The possible introduction of Venezuela has increased speculation that Mercosur may begin to act increasingly as a political body rather than exclusively as an economic grouping of countries

 

Largest Companies in Brazil

Leading Companies:

 

Brazil’s largest companies consist of banks and energy companies that are active primarily on the domestic market.

  • Some large Brazilian companies have started to expand their presence in the Americas.
  • Embraer, an aircraft manufacturer, has become Brazil’s most high-profile exporter, with clients all over the world.

Brazilian banks are the leading banks in South America.

  • In recent years, they have faced greater competition from US and Spanish competitors.

 

Outlook for Domestic Companies:

Brazilian companies will continue to play a leading role in South America’s economy, with some even expanding their presence outside of the region. 

  • However, competition will be fierce in many sectors, particularly as large companies from emerging markets such as China will eventually have to be taken into consideration.

 

Forecast Assumptions and Risk

Assumptions:

 

Near-Term Global Growth to Remain Stable The near-term forecast for the global economy calls for overall economic growth rates to remain near current levels, with developed economies continuing to grow faster than in previous years.

 

Mid-Term Economic Risk Levels to Rise A number of risks (share price corrections, Chinese debt, political gridlock) will rise to more dangerous levels by 2019, jeopardizing the recent run of steady growth for many large economies.

 

Asia Drives Global Growth Asian emerging markets, led by China, India and Southeast Asia, will generate nearly half of the world’s economic growth over the near- and midterm.

 

Brazil’s Competitiveness Struggle Will Continue Brazil’s manufacturing sector has been battered by a sharp decline in Brazil’s export competitiveness in recent years, causing the country to lose export market share to other emerging markets.

 

 

Risks:

A global power vacuum.Whether by design or due to internal political unrest, the United States’ ”America First” policies are resulting in power vacuums forming in many of the world’s most volatile regions.

 

Major Power Conflicts The risk of conflicts between large- and mid-sized powers is rising in the Middle East, Asia and East Europe, and any of these could have the scale needed to severely disrupt the global economy.

 

Corruption Scandal Continues The massive Car Wash scandal has continued to widen in recent years and there is a growing risk that few leading politicians in Brazil will be able to remain above this scandal.

 

 Social Unrest Intensifies The potential for massive social unrest in Brazil remains very high and could become a more disruptive issue in the future.

 

Brazil: Economic Risk Outlook

  • Economic risk levels in Brazil have trended upwards in recent years as growth rates have fallen and export demand as weakened.
  • Without an improvement in domestic demand in Brazil, economic risks levels will not fall very far in the coming years.

 

Composition of Brazil’s Population

Brazil is one of the world’s most ethnically diverse countries.

  • White Brazilians come from a variety of backgrounds.
  • Nearly half of the country can claim some African descent.
  • Large Japanese and Arab communities also live in Brazil

 

Brazil is the only Portuguese-speaking country in the Western Hemisphere.

  • It is also the world’s largest Portuguese-speaking country.
  • On a continent dominated by the Spanish language, Brazilians tend to be able to understand some Spanish.

 

The Roman Catholic Church is Brazil’s leading church.

  • In Brazil, traditional African religions have had a great deal of influence on Catholicism.
  • Protestant churches have grown rapidly in recent years.
  • Brazil has one of the largest Muslim populations in the Americas.

 

Brazil: Leading Urban Centers

 

  • Brazil’s cities continue to grow as urbanization and population growth continue.
  • However, Brazil’s slowing population growth will result in a gradual easing of the population expansion in the cities.
  • Sao Paulo and Rio de Janeiro will remain two of the largest cities in the world.

 

Key Demographic Issue in Brazil:

Brazil’s Overshadowing of the Rest of South America

 

Brazil’s massive size and population has allowed it to play a leading role in South America.

  • Brazil’s size gives it political clout extends across the continent.
  • It is easily the leading recipient of foreign investment due to its market potential and this foreign investment has been essential in allowing Brazil to diversify its economy in recent decades.
  • This is a situation similar to China’s relationship with Southeast Asia.
  • Brazil managed to remain united in the post-independence era whereas most of the Spanish colonies fragmented after independence

Continuing regional integration will eliminate some of Brazil’s scale advantages as free trade in the region spreads.  Nevertheless, Brazil’s unity and size will continue to be in stark contrast to many other countries in South America. 

 

Brazil: Topography and Climate

  • Brazil is easily the largest country in South America and as a result has a number of different geographical regions.
  • The most famous, and important, is the Amazon Basin which contains the world’s largest rainforest and river system.
  • In the south, the land is covered in mountains and hills.
  • The Amazon Basin has a tropical climate with large amounts of precipitation.
  • Along the coast and further south, the climate is subtropical with less rainfall.
  • Only in the highland regions and the far southeast is the climate temperate

 

Key Environmental Issues:

Large-scale logging projects, both legal and illegal, continue in Brazil’s vast rainforests.

  • One reason for this is the dramatic expansion of agricultural land in Brazil.
  • The other leading reason is that the demand for timber continues to grow around the world.

Cities such as Sao Paulo suffer from some of the world’s worst air quality.

  • This air pollution is the result of traffic levels and cheap fuel being used.
  • Improvements have been made in recent years as the result of a government initiatives.

 

Key Geographic Issue in Brazil

Protecting the Amazon Rainforests

 

Estimates range from 5% to 15% of the Amazon Rainforest having already been destroyed.

  • In recent years, the rate of deforestation has increased to its highest level since the mid-1990s.

The spread of agricultural land is the main cause of deforestation in Brazil.

  • In particular, soya farming in the southern Amazon has spread rapidly.
  • Soya farming is very profitable for farmers as Asian demand continues to soar.

The government has been unable to curb the clearing of the forests.

  • Financial constraints and the demand for agricultural demand are largely to blame.

 

The Amazon Rainforest is home to nearly one-third of all the plants and animals on earth and has a major impact upon the world’s weather patterns.  As a result, the continued destruction of this rainforest will have far-reaching effects not only for Brazil, but for the entire world.

 

Brazil: Demographic and Environmental Risk Outlook

Demographic Risk Outlook:

  • Poverty and crime are huge risks for Brazil’s future prosperity and security and could destabilize the country if they are not handled.

 

Environmental Risk Outlook:

  • The Amazon Rainforest is in major danger and this is not only a threat for Brazil, but for the entire world.
By | 2019-01-04T11:30:36+00:00 January 4th, 2019|Uncategorized|0 Comments

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