Brazil Economy and Policy System

Words: 1676
Topic: Politics & Government


Brazil’s economy ranks eighth amongst the major economies of the world with a GDP approximated at $1.57 trillion. In the year 2010, the country’s GDP experienced a growth rate of 7.5%. This was the country’s highest level of growth in approximately 25 years.

This was due to the rise in income in the industrial sector, which was about 10.1%. Growth in the agricultural sector is around 6.5%, while growth in the service delivery industry is at 5.4%. It is noteworthy that Brazil’s per Capita is also on an upward scale with estimates showing that it grew by 21% in 2010 (Portal Brasil).


In terms of population, “Brazil ranks fifth in the world with an estimate of over 190 million people within its borders”. The population of Brazil comprises youths with an estimate who amount to approximately 62% of the entire population. This section of the populace is below 29 years.

The elderly, who consists of persons beyond 65 years, constitute 8% of the population while persons below 15 years are close to 30%. Most of the population is located in the urban areas thus approximate 81% of the total population (Portal Brasil).

The nation has been experiencing a decrease in population growth with the estimates showing that it fell below 2%. Initially, her growth rate was high during the early and the mid 20th century and the fall arises from the economic and modernization process (Bureau of Western Hemisphere).

Major Industries and Company

Brazil has the second largest industry division in the whole of the American continent. Her various industries include firms that manufacture vehicles, computers, assemble aircraft and various consumer goods. It has a sophisticated consumer industry with the banking sector constituting 16% of the total GDP.

Prominent banks in Brazil include “Itau Unibanco” with yearly revenue of $71 billion and Banco do Brazil with yearly revenue of $46.81 billion (Portal Brasil). Due to the presence of numerous mineral deposits like steel and oil, there is a presence of numerous mining companies in Brazil. In the oil exploration sector, the major company includes Petrobras with yearly revenue of $208 billion.

Political Situation

After a prolonged period under military rule, Brazil became a democratic nation in 1985. She has successfully incorporated the federal system of domination with a total number of 26 states. However, there has been an influx of political parties, which is estimated at 40; there are only two political coalitions. It is evident that one that supports the government while the other opposes the government.

It is noteworthy that “the president is elected by a popular vote” for a term of four years; furthermore, he seeks re-election once as stipulated by the Brazilian constitution. The democratic institutions in Brazil are operating smoothly as evident in the numerous successive democratic elections conducted since the end of the military regime. The government has also vowed to protect its citizens from human rights infringement (Neves).

Economic Situation

Brazil economy is characterized by a higher rate of inflation and a worsening public deficit, which was 8.4% of the GDP in 1998. The opening of its market to the international market hurt its balance of payment as the native Brazilian businesses faced stiff opposition from companies in the international market. This led to a sharp increase in the country’s imports compared to exports.

Brazil also has a higher poverty level with a third of its population living below poverty and 14.6% of its population living as destitute (Neves). There is also the presence of an uneven distribution of income in the country. The few wealthy individuals generate a large portion of the country’s GDP while the rest of the population share the small portion.

There is also the irregular allotment of affluence between the various states in Brazil. For example, the Sao Paulo state is ten times wealthier than the less well-off state of Nordeste. The Brazilian economy is also characterized by weak domestic savings, which has made it more dependent on foreign ventures and the heavy reliance of imports to cater to the needs of her population (Neves).

Literacy Level

Literacy level is evident in the ability of individuals above the age of fifteen years to read and write. The literacy level in Brazil is high with an approximate of 81% of its population having the ability to read and write. However, most of her rural population is much less illiterate as opposed to the urban population.

General Cultural Characteristics

Within Brazil, there is a combination of races and ethnicities leading to a variety of culture. Many Portuguese colonialists married the residents creating a new race called mestizos. A mulatto is a race that arises from the intermarriage between the Portuguese settlers and the African captives taken to Brazil.

The family is the base of the social arrangement, and it is the foundation of strength for most people. Their families are large, and the extended family is close. Families help when anyone needs assistance (Neves). Because Brazil was a Portuguese colony, much of the Brazil populace speak Portuguese though it slightly varies when speaks Portuguese.

Brazilian food rotates around three major ingredients; rice, beans, and flour known as Farinha. It is wise to note that the different regions in Brazil are accustomed to different kind of meals. For instance, in the northern region, most of their meals have an Indian influence while in the south majors in fish.

Business Cultural Etiquette

Brazilians prefer to know who the business contact is before commitment in any kind of business negotiation. They prefer face-to-face meetings, upon comparison to written communications as this gives them a chance to comprehend persons they are dealing with. Since Brazilians focus on group culture, it is important to avoid embarrassing incidences.

Their communication is casual and does not rely on the stern rules of procedure. During the meeting, it is acceptable to interrupt anyone who is addressing the meeting as long as the information you are to convey is crucial. Anyone doing business with a Brazilian should expect questions about their companies and personality because they emphasize relationship building, upon comparison to doing business.

For a Brazilian to enter into a business contract with anyone, he has to know the nature of the person and details regarding the company and its dealings. Brazilians take their time in negotiations; thus one should avoid unnecessary rush. They will emphasize going through the negotiation details regularly to get a clear picture of what they were getting into.

Therefore, patience is a virtue best exercised whenever one deals with a Brazilian. Brazilians strictly pursue the pecking order (Bureau of Western Hemisphere). Negotiations roles are conducted by junior servants who are not in a position to decide without the consultations of their superiors. This is because such negotiators do not make the final judgments; thus, a need arises to convince negotiators for them to influence their superiors.

Business meetings are tenable before an appointment. Appointments are either at short notice or after a longer period. However, the dates need substantiation in text. The timing of these appointments also varies depending on their location. For instance, one is expected to keep time if the appointment is in Brasilia while in Sao Paulo, one can be excused if he late (Bureau of Western Hemisphere).

Business cards are subject to exchange during the introductory part of the meeting. Having a business card with a solitary side written in Portuguese is a plus for persons interested in performing business with Brazilians. The side with the Brazilian language should always be on top whenever you are giving out your business card.

Brazilian religion characterizes a wide variety of faiths. Majority of the people in Brazil assert that Catholicism is their main religious belief. There are also other creeds similar to Islam. Brazil has there proved that they are willing to coexist peacefully with a variety of religions.

Education system

Brazil’s education system is characterized by allegations of poor quality and inequality. It is divisible into three main categories: basic which is compulsory to anyone below the age of 14 years, middle and higher education. The basic level is free in all public schools and adults who did not go through this level are encouraged to attend.

The higher education system is further divisible into three categories: universities, which offer a wider variety of courses, federations, and isolated schools that offer one or two courses. The academic calendar comprises of two periods of three and a half months each. The first one starts in March while the second one starts in August.

Interesting facts

Anyone with a desire to conducting business in Brazil should utilize competent experts present in Brazil. Some of the experts could include agents or distributing companies already in Brazil. These experts will help foreign companies with the allotment of their products in the Brazilian market.

This has proved to provide fewer investment risks for the foreign company. One should register merchandise with a confined manufacturer rather than enter the marketplace arbitrarily. This diminishes the level of rivalry from the established local company (Bureau of Western Hemisphere).

It is advisable that a foreign company should pair with the local Brazilian companies to compete in the various markets that have government regulations such as the telecommunication industry. Joint ventures give advantage to any foreign n company since it can evade the strict regulations set up by the government in sectors of interest.

The quality of a company’s products should be of the highest level to compete fairly with the local Brazil companies. The quality of the product should be better than what is available in Brazil with the intention of attracting potential consumers. Due to the prevailing poverty levels in Brazil, higher prices will scare away potential customers (Bureau of Western Hemisphere).

Participating in trade fairs is one of the critical strategies the any prospective company should employ if he is to be successful in the Brazilian marketplace. These fairs will enable the company to expose its products to a wider audience and help in establishing the various needed business connections.

Works Cited

Neves, Pedro. Note On The Political and Economical Situation of Brazil and its Relation with the European Union. Europa. 2007. Web. 13th April 2011

Portal Brasil. “Brazil’s GDP Rises 7.5% in 2010, Achieving Best Results.” 2011. Web. 13th April 2011

Bereau of Western Hemisphere. “Background Note: Brazil.” U.S Department of State. 2011. Web. 13th April 2011.