Federative Republic of Brazil
Brazil (Portuguese: Brasil [bɾaˈziw]),[nt 1] officially the Federative Republic of Brazil (Portuguese: República Federativa do Brasil, listen (help·info)), is the largest country in both South America and Latin America. At 8.5 million square kilometers (3.2 million square miles) and with over 208 million people, Brazil is the world’s fifth-largest country by area and the sixth most populous. The capital is Brasília, and the most populated city is São Paulo. It is the largest country to have Portuguese as an official language and the only one in the Americas, besides being one of the most multicultural and ethnically diverse nations, due to the strong immigration from various places in the world. Bounded by the Atlantic Ocean on the east, Brazil has a coastline of 7,491 kilometers (4,655 mi). It borders all other South American countries except Ecuador and Chile and covers 47.3% of the continent’s land area. Its Amazon River basin includes a vast tropical forest, home to diverse wildlife, a variety of ecological systems, and extensive natural resources spanning numerous protected habitats. This unique environmental heritage makes Brazil one of 17 megadiverse countries, and is the subject of significant global interest and debate regarding deforestation and environmental protection.
Brazil was inhabited by numerous tribal nations prior to the landing in 1500 of explorer Pedro Álvares Cabral, who claimed the area for the Portuguese Empire. Brazil remained a Portuguese colony until 1808, when the capital of the empire was transferred from Lisbon to Rio de Janeiro. In 1815, the colony was elevated to the rank of kingdom upon the formation of the United Kingdom of Portugal, Brazil and the Algarves. Independence was achieved in 1822 with the creation of the Empire of Brazil, a unitary state governed under a constitutional monarchy and a parliamentary system. The ratification of the first constitution in 1824 led to the formation of a bicameral legislature, now called the National Congress. The country became a presidential republic in 1889 following a military coup d’état. An authoritarian military junta came to power in 1964 and ruled until 1985, after which civilian governance resumed. Brazil’s current constitution, formulated in 1988, defines it as a democratic federal republic. The federation is composed of the union of the Federal District, the 26 states, and the 5,570 municipalities.
Brazil’s economy is the world’s eighth-largest by both nominal GDP and GDP (PPP) as of 2017. A member of the BRICS group, Brazil until 2010 had one of the world’s fastest growing major economies, with its economic reforms giving the country new international recognition and influence. Brazil’s national development bank plays an important role for the country’s economic growth. Brazil is a founding member of the United Nations, the G20, BRICS, Union of South American Nations, Mercosul, Organization of American States, Organization of Ibero-American States and the CPLP. Brazil is a regional power in Latin American and a middle power on international affairs with potential superpower status. One of the world’s major breadbaskets, Brazil has also been the largest producer of coffee for the last 150 years.
Brazil is the largest national economy in Latin America, the world’s eighth largest economy and the eighth largest in purchasing power parity (PPP) according to the 2017 estimates. Brazil has a mixed economy with abundant natural resources. After rapid growth in preceding decades, the country entered an ongoing recession in 2014 amid a political corruption scandal and nationwide protests.
Its GDP (PPP) per capita was $15,919 in 2017 putting Brazil in the 77th position according to IMF data. Active in agricultural, mining, manufacturing and service sectors Brazil has a labor force of over a 107 million (ranking 6th worldwide) and unemployment of 6.2% (ranking 64th worldwide). The country has been expanding its presence in international financial and commodities markets, and is one of a group of four emerging economies called the BRIC countries. Brazil has been the world’s largest producer of coffee for the last 150 years.
Brazil has become the fourth largest car market in the world. Major export products include aircraft, electrical equipment, automobiles, ethanol, textiles, footwear, iron ore, steel, coffee, orange juice, soybeans and corned beef. In total, Brazil ranks 23rd worldwide in value of exports.
Brazil pegged its currency, the real, to the U.S. dollar in 1994. However, after the East Asian financial crisis, the Russian default in 1998 and the series of adverse financial events that followed it, the Central Bank of Brazil temporarily changed its monetary policy to a managed-float scheme while undergoing a currency crisis, until definitively changing the exchange regime to free-float in January 1999.
Brazil received an International Monetary Fund rescue package in mid-2002 of $30.4 billion, then a record sum. Brazil’s central bank paid back the IMF loan in 2005, although it was not due to be repaid until 2006. One of the issues the Central Bank of Brazil recently dealt with was an excess of speculative short-term capital inflows to the country, which may have contributed to a fall in the value of the U.S. dollar against the real during that period. Nonetheless, foreign direct investment (FDI), related to long-term, less speculative investment in production, is estimated to be $193.8 billion for 2007. Inflation monitoring and control currently plays a major part in the Central bank’s role of setting out short-term interest rates as a monetary policy measure.
Between 1993 and 2010, 7012 mergers & acquisitions with a total known value of $707 billion with the involvement of Brazilian firms have been announced. The year 2010 was a new record in terms of value with 115 billion USD of transactions. The largest transaction with involvement of Brazilian companies has been: Cia. Vale do Rio Doce acquired Inco in a tender offer valued at US$18.9 billion.
Corruption costs Brazil almost $41 billion a year alone, with 69.9% of the country’s firms identifying the issue as a major constraint in successfully penetrating the global market. Local government corruption is so prevalent that voters perceive it as a problem only if it surpasses certain levels, and only if a local media e.g. a radio station is present to divulge the findings of corruption charges. Initiatives, like this exposure, strengthen awareness which is indicated by the Transparency International’s Corruption Perceptions Index; ranking Brazil 69th out of 178 countries in 2012. The purchasing power in Brazil is eroded by the so-called Brazil cost.
Components and energy
Brazil’s diversified economy includes agriculture, industry, and a wide range of services. Agriculture and allied sectors like forestry, logging and fishing accounted for 5.1% of the gross domestic product in 2007. Brazil is one of the largest producer of oranges, coffee, sugar cane, cassava and sisal, soybeans and papayas.
The industry – from automobiles, steel and petrochemicals to computers, aircraft and consumer durables – accounted for 30.8% of the gross domestic product. Industry is highly concentrated in metropolitan São Paulo, Rio de Janeiro, Campinas, Porto Alegre, and Belo Horizonte.
Brazil is the world’s tenth largest energy consumer with much of its energy coming from renewable sources, particularly hydroelectricity and ethanol; the Itaipu Dam is the world’s largest hydroelectric plant by energy generation.The first car with an ethanol engine was produced in 1978 and the first airplane engine running on ethanol in 2005. Recent oil discoveries in the Pre-salt layer have opened the door for a large increase in oil production. The governmental agencies responsible for the energy policy are the Ministry of Mines and Energy, the National Council for Energy Policy, the National Agency of Petroleum, Natural Gas and Biofuels, and the National Agency of Electricity.