Anyone here from Brazil? Whats the reason for country’s lack of economic progress. It seems that it has great infrastructure. Rio and other cities look pretty comparable to many western cities.
What are the institutional and cultural hinderences facing Brazil.
I have been trying to answer that question myself, unsuccessfully. And would very much like to know the answer. Brazil does not appear to have distinct ‘socialist’ economic policies, i.e. nationalization of industry, as many poor nations such as Bangladesh had. Latin America generally has poor property rights, which is the first condition for capitalism. Much of the third world is poor because they have no secure property rights. But I’m not sure about Brazil specifically. There seem to be some problems with inland transportation. And from skimming the history, Brazils pre-war governments seem to have been mostly despotic dictatorships.
This is a flawed index but it’s a start:
The answer is that there has been tremendous economic growth in Brazil. Having travelled to Brazil on business maybe 25 times over the past 10 years I have seen the country expand its infrastructure and productive capacity.
The country does have a mildly socialist bent but the current and previous MSINO (Mostly Socialist In Name Only) administrations have not gone hog wild by consuming capital through taxes and inflation as they have tended to do in their neighbor Argentina.
If the government of the USA wasn’t collectively insane; And would instead of killing Middle Easterners and impoverishing the US population through regulation and inflation, just drop all trade restrictions with Brazil it would open up the second largest market for USA exports and get cheaper imports for all of us.
Money is being created out of thin air like crazy through easy lending. What’s incredible is that even with interest rates over 11%, it’s still not enough to combat the inflation. Right now there is a boom in the auto industry, for example, due to increased lending towards consumers for new automobiles. There are also government programs that essentially hand money to the poor to buy a house. There are many public housing projects as well in Brazil.
Tariffs are ridiculous. If you do a straight exchange, for example, to purchase a PS3 it would cost over $1100 USD. If it’s not produced in Brazil, it’s going to be incredibly expensive. Walk through a mall and you’ll see that almost every store gives you the ability to purchase an article of clothing, for example, in the form of a payment plan, simply because the item is very expensive. I purchased a t-shirt for about 70 reals that probably would have been $20 in the states.
Foreign investment is currently being fround upon by the government. Right now foreign investment is being taxed because the government believes that it is making the real stronger, which is apparently bad. This way of thinking is backwards but that is how they look at it.
Bottom line is, there is a lot of potential with the country but it is being held back by way too many horrible policies and laws by the goverment (surprise!). From time to time I’ll have a conversation with someone who says “I’ve been reading that Brazil is doing very well” and I just say, first you need to visit the country and see it for your own eyes and second, they are going through a bubble of their own. I say give it a few years and we’ll start to see some of the “good times” from the easy lending start to show their true colors.
waves
I’m from Recife, northeastern coast.
waves back
Hows the urban rural divide? And which industry employs the most people in Brazil? Property rights are in bad shape in every country except the first world.