During the introductory orientation at FEA-USP (Faculdade de Economia e Administração na Universidade de São Paulo) we were greeted by many professors and staff. They told us of the resources available to us and gave us boring lectures on what to expect, what to do, etc.
The lecture given on the second day by the professor Jose Raymundo Novaes Chiappin dealt with the growth of Brazilian economy, their role in the world and their expected development. This lecture was incredible interesting since he talked about the history of Brazil, its milestones and the current state of things with a true Brazilian passion. I didn’t now this then but I know it now, Brazilian people are even more proud of their country than Americans are. They speak of it like it is the best place on earth, with all the love and passion deserved by their motherland.
“Brazil is a young country” he begins, with most of its real and evident progress beginning in the late 1980’s… “Brazilian economy is your contemporary,” referring to the fact that most of us in the room were born after 1985 or so.
Then he shows us the cover of The Economist from the November 09’ issue and asks who had read this. I am surprised to see some hands raised… I forgot... I am now a business student.
“What a dramatic and serious cover,” he exclaims. Diverges for a bit to point out the significance and magnitude of such a respected source calling Brazil “Latin America’s success story”. Boasting proud and mighty… Ooooh Brazilians, how you love the verde-amarelo.
“Let me tell you why people are saying this, how it came to be and why it is true…” he continues, in a tone and demeanor proper of a grandfather who is about to tell a good story…
1500-1822 Brazil was a colony
During this time it mostly produced sugar cane, depended on slavery to function and exported everything. It had vast amounts of land and gold, most of which was occupied by foreigners, and the gold went mostly to Portugal and England to finance other colonies.
Many slaves were brought from Africa, some European explorers and workers came as well. After 1800, the Industrial Revolution with science and new machine technology had developed and brought about new methods of working the land, which were also applied in Brazil.
At this time the power moves from India and China (older societies) to ‘the West’.
1822-1889 Brazil was an Empire
Influenced by the French and US Revolutions, Brazil desists being a colony and becomes an Empire with Pedro I & II as the dictators/Kings.
They begin producing coffee and catching up to others as the second Industrial revolution was taking place.
Brazil adopts a Federal Republic in 1889 and is still ruled by a dictator, Getulio Vargas.
From 1930-1934, he was provisional president and dictator. From 1934-1937, he was congressionally elected president. From 1937-1945, he was dictator with the backing of the revolutionary coalition. From 1951 to 1954, he was popularly elected president. He brought with him some infrastructure and capitalism to Brazil.
Industrialization in Brazil came around 1930-1950 thanks to the infrastructure set by GV and it was able to develop its capitalism as well.
1964-1985 Military dictatorship with many inept leaders that increased foreign debt and increased inflation rates,
Whereas US and England grew slowly with democracy and development; Brazil, China and Russia grew from top to bottom due to dictatorships. This really hurt the Brazilian (Russian and Chinese) economy in many ways.
Due to rapid growth, the inflation rate from 1986-1995 was 2000%/year, whereas it was 3%/year in Europe
At this time, President Itamar Franco and the following president Fernando Henrique Cardoso FHC managed to control inflation with ‘Plano Real’. The plan was aimed to decrease and control inflation, it was successful in 1998, as it chopped off 3 zeros off its currency by changing to a new currency from the Cruzeiro to the Cruzeiro Real, and reduced the rate from 2700% to 2%.
The plan’s main measures were a general price freeze, a wage readjustment and freeze, readjustment and freeze on rents and mortgage payments, a ban on indexation, and a freeze on the exchange rate.
After the success of the plan, President Luiz Inácio Lula da Silva, or Lula for short, was elected and continued its progress. Furthermore, he increased the number of Universities and achieved Brazil’s independence from foreign oil and accomplished the development of Agro-pecuarian industries in Brazil.
These positive changes in Brazilian economy and politics set the foundation for a healthy system that successfully carried the country through the world’s economic crisis of 2008.
“The world is changing,” he asserts with a bright smile. The concept of BRIC is presented to me for the first time and we are assured that in our life times we will see the current world powers fall and the new band of ‘developing’ countries overtake their place.
(Please watch this video!)
http://www.youtube.com/watch?v=fOdcQ3emyzM
“Old colonies now becoming owners,” he smiles again, and presents the example of the Jaguar brand, originally British, it’s now owned by India.
BRIC – Brazil, Russia, India, and China—are the new promising super powers and players in the game of world economics.
So now, we have the BRIC countries + Mexico + Turkey + Indonesia, who are creating a new middle class –bigger, stronger, more eager…
“In 5 years Brazil will be a world power,” he repeats, “and I will be alive to see it!”
With 5% growth, 4.5% Inflation, 8.7% interest and a middle class of 100 million people, Brazil has a strong basis thanks to the effective policies implemented by Lula, it has been able to stay clear from any economic crisis the past 20 years and promises to continue forth strong.
“And in this exciting time, I am honored to welcome you to Brazil,” he concludes.
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