Political and Economic Climate of Brazil

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Brazil has one of the fastest economic growths in the world. Brazil is one of the BRIC (Brazil, Russia, India, and China) countries. Financial analysts project the BRIC countries to have immense influence on the global economy in future. Brazil is currently the sixth largest economy in the world. The country credits its rapid economic development to former president, Luiz Inacio Lula da Silva. President da Silva introduced several policies that helped in lifting millions of Brazilians from poverty to the middle class. Despite the global economic slowdown, Brazil’s economy continues to thrive. Therefore, Brazil offers a suitable ground for investment (Forest, 2011).

Brazil has a population of about 200 million. Approximately half of the population is part of the middle class. Since 2003, the government has introduced sound economic policies that have helped more than 40 million people join joined the middle class. Rapid expansion of the middle increased the disposable income of the population. In 2010, Brazil had an economic growth of 7.5%, whereas in 2011, it had a growth rate of 2.7%. The IMF anticipates Brazil’s GDP to grow by 3.5% in 2012 (Winter & Grudgings, 2011). The growth of local industries is unable to match the rapid increase in the spending power of consumers. This leads to a significant increase in imports (Forest, 2011).

Brazil has a stable political and economic climate. Brazil’s president, Dilma Rousseff, has introduced several policies that deal with issues facing the middle class. The policies strive to prevent the middle class from slipping back into poverty. Efficient implementation of the policies guarantees the medium term economic prosperity of the country. Few legal restrictions ease the process of investing in the country (Lamdin, 2011). The Brazilian Service of Support for Micro and Small Enterprises (SEBRAE) is the main agency that offers information to people who would like to invest in the country (Forest, 2011).

Brazil has one of the most diverse economies in the world. Some of the major industries in Brazil include Agriculture, petrochemical, manufacturing, mining, and service industries. Agriculture is one of the main industries in Brazil. It employs 20% of Brazil’s workforce. Brazil is the largest producer of coffee, sugarcane, and soya. Brazil is self-sufficient in oil. Exploration of the recent discovery of large oil reserves would make Brazil one of the major oil exporters in the world. In addition, Brazil has a large manufacturing industry, which makes motor vehicles, machinery, aircraft, and textiles (Forest, 2011).

Some of the country’s exports include iron ore, tropical hardwoods, motor vehicles, beef, and coffee. Brazil’s imports include organic chemical, electronics, and crude oil. The US is Brazil’s major trading partner. In 2011, Brazil had a positive balance of payment. The balance of payment had a surplus of approximately US$30 billion. A positive balance of payment is favorable to the development of the country. It signifies a vibrant domestic industry. The Brazilian Real (R$) is Brazil’s currency. Two Brazilian reals are approximately equal to one US dollar (Forest, 2011).

Brazil has one of the most unequal societies in the world. 5% of the population control 85% of the country’s wealth. In Brazil, it is common to find extreme levels of poverty that are comparable to poverty in Africa or Asia. On the other hand, some people are extremely wealthy. There is limited interaction between people who belong to different social classes (Forest, 2011). 85% of Brazilians are Catholics, 8% are Protestants, with the remainder being Muslims and followers of various African-Brazilian religions (Jenkins, 2011). 80% of Brazilians live in urban areas. However, some minority groups live in the Amazon and have minimal contact with civilization (Vincent, 2003).

Brazil has a high level of technological development. Efficient use of technology enables the country to improve its efficiency in agricultural production. In addition, Brazil is one of the few countries that manufacture aircrafts. The government has invested heavily in the development of IT, as it is a critical factor in facilitating economic growth (Hanna & Knight, 2011).

The Brazilian culture is very conservative. It emphasizes the distinct roles of men and women. The Brazilian culture associates men with power and authority. On the other hand, the culture associates women with subservience. However, various women’s rights movements have been able to pressurize the government to ensure equality in the society (Forest, 2011).

Hofstede is one of the most prominent scholars who have undertaken an anthropological study of various. Hofstede used several parameters in analyzing the cultures. These include Power Distance Index, individualism, masculinity, uncertainty avoidance, and long-term orientation. Power Distance Index (PDI) refers to people’s expectations on distribution of power within an organization or country. Countries with a low PDI usually have consultative politics. On the other hand, countries with a high PDI usually have high levels of corruption and bribery. According to Hofstede’s classification, Brazil has a PDI of 69 out of 100 (Scott, 2009).

Individualism refers to the level of integration of people within a society or organization. Individualism determines the level of relationships between an individual and the society. Hofstede associated high individualism values with mobility between various social classes and the distribution of wealth in the nation. As a country becomes wealthier, the value of individualism increases. Brazil has a score of 38 on the Hofstede individualism scale (Scott, 2009). Therefore, Brazil has a high level of collectivism. Therefore, in an organizational setting, Brazilians are likely to form strong teams.

Masculine cultures put much emphasis on assertiveness, materialism, and ambition. Therefore, masculine cultures are more competitive than other cultures. In addition, masculine cultures emphasize the roles of each gender. On the other hand, feminine cultures prioritize the quality of life and personal development. Brazil has a score of 49 in the Hofstede’s masculinity index (Scott, 2009). This shows that Brazil does not have an assertive culture. In such as culture, people usually try to avoid conflicts.

It is vital to ensure that people do not feel threatened by uncertainty of various situations. Emotional cultures usually create rules that enable people to predict the results of their actions. This reduces the level of uncertainty. In cultures that have low levels of uncertainty avoidance, people feel more comfortable in ambiguous situations. Such cultures have very few rules. Religious cultures usually have high values of uncertainty avoidance. According to Hofstede’s classification, Brazil has an uncertainty avoidance value of 76 (Scott, 2009). This is because most Brazilians are religious. The high value of uncertainty avoidance implies that there are many rules that guide the activities of people in organizations. This increases the level of bureaucracy in the country.

Various societies use long-term orientation to guarantee their future. People in societies that are long-term oriented are less likely to take part in risky business deals. In the Hofstede’s classification, a high value of long-term orientation means that the society can adapt quickly to cope with a tricky situation. According to Hofstede’s classification, Brazil has a score of 65 in long-term orientation (Scott, 2009).

There are various emerging sectors in the Brazilian economy. The retail market industry is one of the most promising industries. The expansion of the middle class fuels growth of the retail industry. The industry expects to grow due to the declining inflation and the expansion of credit conditions. The healthcare and pharmaceutical industries also have a high growth potential. This is due to the government’s efforts to expand the industry (Forest, 2011).

References

Forest, C. (2011). Brazil. North Mankato, MN: ABDO.

Hannah, N. & Knight, P. (2011). Seeking transformation through information technology: Strategies for Brazil, China, Canada, and Sri Lanka. Spring Street, NY: Springer.

Jenkins, P. (2011). The next Christendom: The coming of global Christianity. Oxford: Oxford University Press.

Lamdin, D.J. (2011). Consumer knowledge and financial decisions: Lifespan perspectives. Baltimore, MD: Springer.

Scott, E.S. (2009). Digital research cycles: How attitudes toward content, culture and technology affect web development. Ann Arbor, MI: Proquest.

Vincent, J.S. (2003). Culture and customs of Brazil. Westport, CT: Greenwood Publishing.

Winter, B. & Grudgings, S. (2011). Brazil’s long boom appears to be over. Reuters. Web.

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Political and Economic Climate of Brazil

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