Brazil economic overview and solar power in Brazil - Essay Example

?  Brazil: Economic overview and solar power Economic overview of Brazil: PESTEL Analysis  Political Brazil is a federal presidential representative democratic republic, in which the president holds supreme power of the country as well as the government just like America. Even though multiparty system exists in Brazil, its democracy is somewhat different from the democratic systems in other parts of the world. For example, India is a secular democratic country in which the president has only the power for the namesake. All the administrative matters and critical decisions were taken by the prime minister and his cabinet. But in Brazil, no political or economic decisions may become a law unless the president endorses it. Politicians in Brazil were untouchable in the past. In other words, Brazilian politicians enjoyed huge power in the past. Even courts were afraid of punishing these politicians even though they committed corruption and violence at will. However, the scenario has changed a lot in recent times. Brazilian courts started to punish politicians in recent times. Recently twenty five people have been convicted on charges related to corruption. “To many, in this country where public service has long been marred by corruption and impunity, the sentence was a powerful message signaling improving political health. The country's main newspapers reported it with above-the-fold headlines, trumpeting "the hour of punishment." (Brazil Begins Punishing Politicians, for First Time, 2012). These changing trends in Brazilian politics definitely help the economic growth very much. Earlier, the activities of the politicians were opaque whereas current politicians forced to follow transparency in all their activities. Thus the accountability of politicians increased in recent past which is reflected in the economic growth. Economical Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries, and Brazil is expanding its presence in world markets. Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments. In 2008, Brazil became a net external creditor and two ratings agencies awarded investment grade status to its debt (Brazil Economy – overview, 2012). Along with India, China, Russia and South Africa; Brazil is one of the prominent members of BRICS countries. BRICS countries are the most rapidly developing regions in this world at present. While majority of the Latin American countries and America like wealthy countries struggling to develop properly, Brazil is developing rapidly. The injuries of 2007-2008 recessions have not affected Brazil very much. “In 2010, consumer and investor confidence revived and GDP growth reached 7.5%, the highest growth rate in the past 25 years” (Brazil Economy – overview, 2012). Even though the economic growth in Brazil has been slowed down a bit in 2011, the forecasts for 2012 and coming years are bright. “Despite slower growth in 2011, Brazil overtook the United Kingdom as the world's seventh largest economy in terms of GDP. Urban unemployment is at the historic low of 4.7% (December 2011)” (Brazil Economy – overview, 2012). Social “The richest 10% of people in Brazil have access to over 40% of the country’s income. On the other hand, the poorest 10% receive about 1% of the income” (Brazilian Social Issues, 2011). The gap between the rich and poor in Brazilian society is extremely huge compared to that in many other countries. One of the most challenging problems facing by Brazil at present is the reduction of this gap. The living conditions of the rich people are advancing rapidly whereas poor people are still struggling to attain the benefit of economic growth in Brazil. Poverty, unemployment and other problems are still prominent in Brazil despite the huge economic growth. It is evident that the benefits of growth have not been distributed evenly in Brazilian community. Technology The technological developments in Brazil are not so much attractive. Indigenously developed technologies are less in Brazil compared to other emerging countries such as India, China or Russia. It should be noted that these three countries are nuclear powers and they have many other domestically developed technologies. For example, India has achieved huge growth in space research and missile technologies. On the other hand, Brazil does not have either nuclear arsenal or missile technology. The lag in technological areas is still retarding the growth of Brazil. Brazil is currently importing technologies in critical sectors from outside. “The Brazilian government said recently that it intends to spend upwards of R$500 million ($250 million) on information technology projects and start-up support over the next three years in an attempt to create home grown high pay, high value companies in the tech space” (Brazil To Pump Nearly $250 Million Into New High Tech Initiatives, 2012). Environmental The rapid development of a country often brings many environmental challenges. It should be noted that industrial development often brings environmental problems also. The case of Brazil is also not an exception. Plenty of environmental issues are currently facing by Brazil. Deforestation, acid rain, endangered species, air pollution, waste disposal, etc are some of the major environmental problems facing by Brazil. “Because Brazil is home to the world-renowned Amazon Rainforest and the basin it occupies, deforestation has become a major cause for concern in this area” (Brazil Environmental Issues, n.d.). Air pollution, water pollution and land pollution are increasing day by day in brazil because of the increased use of automobiles on roads and increased use of pesticides, chemicals and fertilizers in agricultural lands. Legal “Brazil is a federative republic, constituting an indissoluble union of States, Municipalities, and the Federal District. The Brazilian legal system is codified. The federal government, states, and municipalities, each within its own sphere of authorities do issue laws.  Court decisions entail correct application of current Brazilian laws”(Legal system, 2012). Just like other democratic countries, Brazil has small local bodies to supplement the administrative procedures. Districts and municipalities in brazil have some independent power on developmental matters and they can take independent decisions up to certain extent. For example, to establish a small scale industry at a particular place, the permissions from the local body is essential in brazil. Solar power in Brazil On 17 April 2012, the Brazilian National Agency of Electrical Energy, ANEEL, approved the most important piece of new legislation for the solar industry in the country to date. Setting in place regulation for net metering for solar systems up to 1MW and granting utilities an 80% reduction in distribution taxes for power generated by solar plants up to 30MW in size, the regulation gives a significant boost to the country's solar industry which has traditionally relied on off grid projects. As a result of the legislative changes, solar market researcher, NPD Solarbuzz predicts a year on year growth rate of over 350% for 2012, with potential triple figure growth until 2014 (Solar Brasil, 2012). As in the case of other countries in the world, Brazil is also facing severe energy crisis. It should be noted that Brazil is one of the rapidly emerging economies in the world and its energy needs are increasing day by day. While most of the other available energy sources in this world have some kind of disadvantages, solar energy seems to be a safe option or solution for energy crisis. Just like other emerging countries, Brazil also started to look upwards for their energy needs. Plenty of solar energy exploiting companies are functioning in Brazil at present. SOLETROL IND. E COM. LTDA, Kevin Power Solutions Ltd. ABRAVA- DASOL- Brazilian Solar Water Heating Industry Association, Aquecedor Solar KISOL, Aquecedor Solar Transsen Ltda, Ecoluz S/A etc are some of the prominent Brazilian companies in the solar power business. Moreover, Brazilian government is doing everything possible to exploit solar energy as much as possible. Solar energy exploiters are getting plenty of governmental aids as part of the Brazilian government’s policy of encouraging solar energy exploitation. The available energy sources in this earth are rapidly exhausting. It is estimated that the oil resources available in this world are sufficient enough to meet the energy needs of the world for only 30 or 40 more years. Moreover, exploitation of nuclear energy seems to be an infeasible action at present considering the accidents happened in Chernobyl, Three Mile Islands and Fukushima. Plenty of protests are going against nuclear power plants in India like emerging countries. Under such circumstances, solar energy seems to be the only option left behind for the people in this world. One of the major advantages of solar energy is its renewable nature. While most of the conventional energy sources are exhausting rapidly, the availability of solar energy remains constant. In short, solar energy is the only option for Brazil like developing countries in future. Solar Energy is now cheaper to generate than buying electricity from the utility for retail consumers, in Brazil. The sharp fall in solar panel prices last year has made the prices of solar electricity fall steeply leading to grid parity in a number of places globally. Brazil has: a) one of the highest electricity rates in the world b) uniformly high sunshine throughout the year (Shah, 2012). In short, Brazil is one of the prominent countries in the world as far as solar energy exploitation is concerned. References Brazil Economy – overview, 2012. [online] available at; http://www.indexmundi.com/brazil/economy_overview.html [accessed 09 December 2012] Brazil Begins Punishing Politicians, for First Time, 2012. [online] available at; http://latino.foxnews.com/latino/politics/2012/10/26/brazil-begins-punishing-politicians-for-first-time/[accessed 09 December 2012] Brazil To Pump Nearly $250 Million Into New High Tech Initiatives, 2012. [online] available at; http://www.forbes.com/sites/kenrapoza/2012/08/22/brazil-to-pump-nearly-250-million-into-new-high-tech-initiatives/[accessed 09 December 2012] Brazil Environmental Issues, n.d. [online] available at; http://www.brazil.org.za/environmental-issues.html#.UMRPIO_5T1U[accessed 09 December 2012] Brazilian Social Issues, 2011. [online] available at; http://www.brazil.org.za/social-issues.html#.UMRLfO_5T1U[accessed 09 December 2012] Legal System. 2012. [online] available at; http://masterclassbrazil.com/managing-a-business-in-brazil/legal/brazilian-legal-system-basics/[accessed 09 December 2012] Solar Brasil, 2012. [online] available at; http://www.greenpowerconferences.com/EF/?sSubSystem=Prospectus&sEventCode=SP1210BR&sSessionID=eff366805b4c0a5dfe3577a768f2a05e-16968322 [accessed 09 December 2012] Shah, A. 2012. Brazil Solar Opportunities [online] available at; http://www.greenchipstocks.com/articles/brazil-solar-opportunities/2067 [accessed 09 December 2012] Read More