Brazil is one of the top emerging markets in the world and its wealth relies on exporting many natural resources. Recently, the demand for these natural resources has declined and Brazil’s economy will fall if measures are not taken to expand and improve economic growth.
In Ruchir Sharma’s article, “Bearish on Brazil”, he compares China and Brazil’s methods of growth. China also has a large market however it took a different approach in growing its economy than Brazil utilized. China was very open to possibilities of global trade, resulting in low export prices as well as low value of the yuan. Brazil took a cautious approach with their economy and focused on the protection of their citizens rather than expanding productivity and growth. As a result, prices of goods in Brazil are extremely high and expansion is very slow.
Brazil has the ability to distribute wealth more equally among citizens and spend more on educational systems. Brazilian schools have the lowest attendance rate of any middle-income country. However, Brazil is corrupt and instead large amounts of money are spent on things such as the World Cup and the 2016 Olympics, both of which have lead to protests. In the article “Brazil’s Ebbing Tide”, written by Matthew Taylor he justifies the protesters attitudes. He said, “In sum, the protests, disgust with corruption, and apprehension about the World Cup that have dominated Brazilian media coverage for so much of the past year are in many ways a reflection of the upper-middle class malaise,” (Taylor 62).
Taylor’s article does not mention the additional costs now being spent on the Olympics. In the article attached at the end, Stephen Wade discusses the spending of the World Cup in addition to Olympic games and the issues it has caused regarding President Dilma Rousseff’s popularity. He also touches upon the very current Petrobas scandal that adds to President Rousseff’s dropping in popularity.
As mentioned previously, economic growth in Brazil has given it the opportunity to practice a democracy. The corruption the country is currently facing tampers with citizen’s rights and until that changes the economy will continue to fall and the President will lose support. The textbook written by Kesselman, Krieger, and Joseph sums up what measures need to be taken to solve Brazil’s problems. They state, “Policy-makers must find better ways of adjusting policy to the needs of a larger economy and a society that demands decreasing levels of poverty and inequality,” (KKJ 368).