The potential for Brazil to be among the world’s front-runners as one of the most stable and prosperous economies has existed for as long as it’s been inhabited. It’s natural resource quality and quantity is rivaled by no other nation and it’s society is controlled by a democratic government whom support capitalistic philosophies and open and free markets (although Brazilians still prefer a strong government presence). And when you take a closer look at the formation of Brazil you can’t help but notice striking resemblances to elements seen in the formation of the United States (although not all of them beneficial towards economic growth).
A November issue of The Economist noted several similarities of the make-up of Brazil to the US. The most prominent listed below:
- Both are continent sized countries in the western hemisphere with vast amounts of natural resources.
- Both are controlled by federal democracies in which individual states have substantial power.
- Both were originally formed by small European nations before gaining independence.
- Both populations are comprised of the descendants of their original inhabitants, early colonists and African slaves along with European and Asian immigrants following closely behind.
- Both places show a favoritism of consumption over saving during times of prosperity.
When you combine a country who is rich in natural resources (Brazilian/Portuguese term for understatement), who encountered a similar formation to a country with the largest economy in the world, and a democratic government with capitalistic tendencies, you’re surely bound for financial success, no?
Economic Facts suggesting a very successful 2010 for Brazil:
- Self sufficient in oil.
- Recent discoveries in off shore oil being brought to market.
- 3 out of 3 of the main rating agencies classify Brazil as “investment grade.”
- Brazil has announced it will begin lending money to the IMF (an organization who only 10 years prior was reluctant to lend money to Brazil).
- FDI (foreign direct investment) was up 30% in 2009 while the rest of the world suffered a 14% loss in FDI.
While the bulk of economic gains for Brazil will undoubtedly take place outside of the 365 days making up 2010, the long-term future is certainly bright for this South American country.