Brazil has the eighth largest economy in the world and is the largest national economy in the whole of Latin America, according to the latest estimates. What makes the economy of Brazil so good is that it is mixed. The country has a diverse economy and plenty of natural resources. This isn’t to say that the country hasn’t had its share of economic problems, however; Brazil entered a period of recession in 2014 following nationwide protests over a political corruption scandal. During this time, Brazil was knocked all the way down to the 77th highest economy in the world.
Brazil was able to recover and now has a labor force of around 107 million people; giving it the 6th largest labor force in the world. It also has an unemployment rate of just 6.2%. The country has begun expanding into the international finance and commodities markets. So, what goes into the economy of Brazil? Let’s take a look.
Agriculture is a large part of the Brazil economy. The country has an ideal climate for growing plenty of different fruits, vegetables, and other natural products. The country is also home to vast areas of woodland, making logging and forestry some of the main components of the Brazil economy.
The country has been the largest exporter of coffee in the world for over 100 years now. It is also one of the biggest producers and exporters of sugar cane, oranges, papayas, cassava and sisal, soybeans, and many other natural products.
Brazil has over 106 million hectares (or 260 million acres) of undeveloped fertile land. To put that into perspective, that’s larger than the combined area of Spain and France, and all of that land is ripe for growing produce. Spanish agriculture continues to perform well even during economic down-periods, with agriculture production growing 9.1% during the global financial crisis.
Most of the grains and other agricultural exports of Brazil come from the southern half of the country. This area has a better climate, more rainfall, more fertile soil, more experienced farmers, and better technology than the rest of the country.
The grasslands of Brazil are not fertile enough for growing produce, and are primarily reserved for grazing, as the country is also a big exporter of beef and other animal products. As great as the agriculture of Brazil is, there are some problems. These include slave labor, production financing, and agrarian reform. Even so, the country depends on agriculture and steps are constantly being taken to improve the situation.
Mining is another big sector of the Brazilian economy. The country has abundant natural resources. Mining in the country is primarily centered on gold, copper, iron, tin, and bauxite. There are also diamonds in Brazil. Brazil was the fifth largest producer of gold in the world by the late 80s, but now people in the country are becoming more aware of the environmental impact.
Industry has been a part of the Brazilian economy since the 1800s. Most of the industry occurs in the southeast of the country – in particular Rio de Janeiro, Minas Gerais, and Sao Paulo. Brazil is the third-most-advanced industrial sector in The Americas. The industry sector of Brazil accounts for a third of Brazil’s GDP and covers a range of industries including automobiles, steel, petrochemicals, aircraft, computers, and consumer goods.
Brazil also has a diverse services industry. The banking sector accounted for up to 16% of the GDP in the early 90s. While the financial sector has gone through a range of overhauls, it still provides local businesses with many products and is drawing international interest; particularly from the US.
One of the reasons for the success of the industry sector of Brazil is the abundance of natural resources. Brazil has plenty of iron and manganese reserves, which are important sources of industry raw materials and also a big export for the country. The country doesn’t have as much coal as it used to, but it still has enough to get by.
A major part of the industry sector is automobiles. Brazil began producing automobiles in the late 50s. It exploded in the 90s, but there are still some problems holding back development, including production costs and taxes. Even so, the automobile industry continues to grow in the country, which has now become the fourth largest car supplier in the world (pushing it ahead of Germany). Over 1.5 million people in the country are employed thanks to the automobile sector.
Thanks to the impressive growth of the Brazilian automotive industry, billions of dollars are flowing into the country in investments. Many car manufacturers, including BMW and JAC Motors, have begun developing in the country.
The first active oil fields of Brazil were found in the northeast shore of the Bay of all Saints. Brazil is undergoing reform to move to more renewable sources of energy, decreasing oil and petroleum imports and improving exports instead. The country also produces a lot of natural gas, and is home to one of the largest hydroelectric dams in the world. The petroleum is either used, exported, or turned into petrochemical products.
As a country with a wealth of natural beauty, it’s obvious that tourism would be one of the keys to the economic success of many regions of Brazil. Some 5 million people visited the country in 2012, making it the second main destination in South America and the third main destination of Latin America. Tourism generated some $6.6 billion in 2012, continuing the trend that has seen tourism continue to grow since the economic crisis of 2008 and 2009.
Brazil offers tourists – whether domestic or international – a range of options. The natural beauty of the country is one of the largest tourism draws. Brazil offers ecotourism, leisure and recreation, plenty of sun and sandy beaches, and historic and cultural tourism. No matter what kind of tourism you have in mind, Brazil can likely cater to your needs.
Some of the most popular destinations in the country include the beaches, dunes, and Amazon Rainforest of the Northeast regions, along with the Pantanal of the Center-West Region and the beaches of Rio de Janeiro. Cultural and historical tourists flock to Minas Gerais, while those on business trips are frequent flyers to Sao Paulo.
Brazil ranked 28th in the 2015 Travel and Tourism Competitiveness Index – which assesses the factors that make investing in travel and tourism in a country an attractive choice. Brazil came in third in the Americas, following the United States and Canada. The competitive advantages of Brazil are the natural resources and cultural resources, as Brazil is home to many World Heritage Sites.
Origin of Visitors
Brazil brings in tourists from around the world, including Argentina, Paraguay, Ecuador, Costa Rica, Mexico, Canada, the United States, China, Japan, Spain, France, Germany, Australia, the UK, Switzerland, Russia, and many others.
One of the primary reasons Brazil is so popular with these countries is that the country waived tourist visa requirements for them. Tourist visas are needed to attend a conference or lecture, visit relatives and friends, and participate in competitions and artistic events, but the country is practically open to general tourism from around the world.
Even though international tourism is a major part of the Brazilian economy, it’s wrong to discount domestic tourism. Domestic tourism remains a major part of the tourism industry, with over 51 million Brazilian nationals making ten times as many trips – and spending five times as much – as their international counterparts. Native Brazilians flock to Sao Paulo, Minas Gerais, and Rio de Janeiro.
The Brazilian economy is hardly the best in the world. If anything, it is still struggling with major issues that are holding it back. Recovery is possible, however, and the country continues to grow. Here’s plenty going right for the Brazilian economy; especially as far as agriculture, industry, and tourism go. Brazil is still a major economy, and will be a force to be reckoned with if it can get back on its feet.