Brazil and Rapid Economic Change and Growth - Research Paper Example

This paper focuses on Brazil, one of the developing countries, that is growing at a rapid speed and is intensely getting affected by globalization (Schirm, n. d.).

Globalization and Economic Expansion:

            After globalization, Brazil is undergoing many economic changes. Its net amount of business with the rest of the world has increased significantly after globalization. The country is now experiencing a large volume of flows of economic resources (from human capital to natural and physical capital). The volume of trade is significantly increasing over time (Schirm, n.d.). The close association of economic expansion and globalization is also true in the case of Brazil. Due to economic expansion (the effect), after globalization (the cause), Brazil’s economy is experiencing a much higher level of output as well as a much higher rate of growth. Since the level of trade is one of the most important measurements of judging whether an economy is expanding, it can easily be said that over the last twenty years Brazil is going through the take-stage. These economic factors are affecting the country’s social and cultural aspects also (Tucker, 2008, p. 408). Both these aspects together are creating rapid economic growth throughout the world and these are significantly affecting the world economies. These effects are sometimes positive and sometimes negative. In the face of this rapid economic growth Brazil, like other developing countries, such as India, Russia, China, Indonesia, etc., is also facing some challenges and triumphs (Schirm, n.d.). Brazil’s economy was stagnated with hyperinflation during the eighties. After following a method of import substitution and separation for a considerable period of time Brazil entered the global scenario. Fernando Collor was the first voted president of Brazil in 1960 to initiate an impression of stabilizing the currency, lowering tariffs, and destabilizing the public administration via budget cuts. This marked the beginning for Brazil of opening up into the world economy (Fishlow, 2000).

Globalization and Brazil:

                Due to the occurrence of globalization the developing nations, such as Brazil, are experiencing rapid changes in their economic, social and general lives. Brazil’s economy has largely been changed after globalization. Its economy is now hugely dependent upon the world economy. Brazil’s overall income level of GDP is much higher now. This economy is much more open. This openness ensures a high-income level. Not only that, the rate of growth of Brazil’s economy is much higher now. The economy is experiencing every bit of the progress of the global economy. The level of trading, i.e. the volume of exports and imports is growing in number. The infrastructural improvements are considered as one of the measurements of the impact of globalization, so it can easily be said that this impact has been very positive on Brazil’s economic structure. It is quite clear that like all other developing nations Brazil has properly used the benefits of globalization. It is now a globally recognized economy in terms of the ranges of exports and imports and also in terms of the level of income and the rate of growth of income (Globalization and Emerging Economies, 2009).

Economic expansion and Brazil:

                The financial system of Brazil is budding fast. After the liberalization of the economy, it is experiencing a significant growth path in terms of aggregate income and infrastructure. Brazil is the largest economy in Latin America and one of the largest economies of the world in terms of market exchange rates and purchasing power parity. Aircraft, automobiles, footwear, steel, coffee, etc. are the rapid budding sectors in Brazil. These are hugely contributing to the development of the economy of Brazil. It is one of the member countries of the emerging countries of the world named BRIC countries. The level of FDI and FPI are getting into the country in large volumes and hence pouring benefits to the economy. Multinational corporations are investing lots of money that is actually accelerating the growth of the country (Schirm, n.d.).

Social and cultural aspects and drawbacks:

                The society and culture of Brazil are also getting influenced by globalization and economic development. The country consists of various cultural and social dimensions that are hugely correlated to world cultures. In fact, like all other developing countries, it now belongs to the single global culture. But the problems like the global financial crises of 2007-08 and 2011 are negatively affecting the economy since it depends more upon the global market. It is also increasing social disparity and scarcity in Brazil (Schwartzman, 2003). Despite all Matins-Bekat and Kulkarni (2009) points out that Brazil’s economy behaves in line with Kuznets's prediction in terms of the Gini coefficient. This implies that economic growth brings about higher income inequality.

Conclusion:

                In spite of the drawbacks that the economy of Brazil is experiencing being dependent largely upon the global financial markets, the positive impacts can never be ignored. It is estimated that this economy will be the fifth-largest market in the world in the next decade (Schirm, n.d.). The way the economy is growing, like other developing countries of the world, this forecasting will soon be realized.