Latinamerica Collection
Economy and Business in Brazil

Since settlers arrived in Brazil in 1500 the economy was heavily controlled by Portugal who enforced a very inflexible imperial policy that heavily limited the country's development. These effects were felt even after Brazil's independence in 1822 and into the 1930s. The largest changes began taking place in the late 1800s such as with the abolishment of slavery and the creation of working wages. Between 1950 and 1980, Brazil experienced a more varied manufacturing industry which led to the strengthening of economic growth rates. However, since the early 1980s the economy has experienced a plateau of slow growth. The country experienced some improvements in the 1990s that proved to be only temporary solutions plagued by ongoing problems.


Since the early to mid 1900s, Brazil has also experienced a great deal of demographic changes which have thus had an effect on the country's economy. For example, in the 1940s roughly 70% of Brazil's population lived in rural areas. However, the end of World War II resulted in a strong influx of people to the nation's city centers. In 1991 more than three-quarters of the population resided in cities, a population that increased by more than 100 million in fifty years, which caused the economic boom, though only temporary, that occurred during that time.


From the mid 1940s to the early 1990s, Brazil's agricultural contribution to the GDP dropped from 28% to only 11%, which would lead one to believe that agriculture is not important in Brazil. However, Brazil is one of the largest exporters of agricultural commodities in the world. Today, Brazil's agriculture accounts for only 8% of the nation's GDP and 20% of the country nearly 100 million person labor force. Some of these agricultural produced include coffee, soybeans, wheat, corn, rice, beef, sugarcane, cocoa, and citrus fruits. Of these products, coffee and soybeans are the most significant exports.


Contrary to the agricultural sector, during the same period from the 40s to the 90s, Brazil's industry doubled from below 20% to nearly 40%. This sector of the economy produces many important commodities that are likewise exported around the world. Some exported products include transport equipment, iron ore, footwear, and autos though Brazil also produces steel, chemicals, textiles, lumber, aircraft, as well other machine parts. Today the industrial sector accounts for 38% of the GDP and 14% of the labor force. Both agricultural and industrial products are shipped namely to large countries like the United States, Argentina, China, and Germany.


The largest sector of the Brazilian economy is the services division accounting for th remaining 54% of the GDP and a huge 66% of the labor force. Services account for such things as ports and tourism. The country's GDP is currently experiencing a growth rate of 3.7% and an unemployment rate of nearly 10% with a somewhat recent increase in poverty centered around the country's rural areas. The problems that Brazil's economy has faced since the 1980s have not been helped by the political turmoil that had taken place since that time and into the 1990s. However, the Brazilian economy is gradually developing and strengthening with each passing year.