Booker T. Washington High School
Model United Nations Club
Country Briefing: Brazil
Brazil has a population of 172 million people and is truly the colossus of South America. It is also the largest in territory. Its per capita Gross National Product is $3,070, making it a lower-middle income country. However, income inequity is a problem – the wealthiest 5% hold 38.7% of the national income.
History: Brazil was founded by Portugal in the 15th century after a period of competition with Spain. Its early wealth was founded on slave labor imported from Africa, creating a diverse mix of Africans, indigenous peoples, Europeans, and mestizos. It became an independent state in 1822 after the Napoleonic Wars in Europe, and was ruled by a succession of emperors until 1889. These emperors ruled their massive territory with the support of the military and regional landowning elites. When they withdrew support, the imperial system collapsed. Landowners imposed a republican form of government that left much of the power in the hands of regional governments, themselves controlled by local landlords. This conservative order failed in 1930, when the worldwide economic depression caused a collapse in farm prices, the key to Brazil’s economy. A revolution broke out, and Getulio Vargas came to power as Brazil’s first modern dictator. His “Novo Estado” system was based on the fascist political model then fashionable in Europe. It emphasized state control of the economy in isolation from worldwide economic currents. Key industries like steel and mining were controlled by the government, to maintain employment and social stability. High tariffs protected local industry from foreign competition. In 1945, Vargas re-established representative systems to accommodate the new global order, but peasants were excluded from participation. By the 1960s, tension was growing as new groups lobbied for their share of political power. A labor government came to power in 1961 and began using the government to promote land reform and income redistribution. The military intervened in 1964, after a rise in oil prices undermined the new policies. The army remained preeminent in politics until 1985, when new democratic elections were held. A new constitution was drafted in 1988, allowing peaceful political competition through elections. The economy continued to suffer, however, as a result of high interest rates, inflation and a strong dollar through the 1980s. In an effort to recover from this recession, Brazil embarked on a new economic policy in the 1990s. It began reducing tariffs to promote foreign trade, and it renegotiated deals with foreign creditors. In 1997 it made its currency, the real, convertible into the dollar. These measures improved trade, the budget situation and the inflation problem, but made the economy still more vulnerable to the international economic cycle. Many reforms still need to be made, including the sale of state-owned industries and reform of spending practices. In fact, Brazil is still in the middle of twin revolutions – restoring democracy in politics and promoting economic openness with international markets. Much depends on the courage of Brazilians to enact needed reform, but another key factor is Brazil’s ability to expand trade with its neighbors and to work with international financial institutions like the International Monetary Fund (IMF) to promote balance in Brazil’s relationship with the world economy. To that end, Brazil has recently pledged development loans to Argentina and Venezuela to promote regional trade.
Diplomatic Agenda: Like Argentina, Brazil faces serious economic problems. It must find ways to promote economic stability in South America, increase trade with its neighbors and the United States, and attract foreign direct investment (FDI) This is crucial, because money from the IMF and international banks can help promote economic growth, providing jobs and promoting social stability at home. With high rates of poverty and illiteracy throughout Brazil, the threat of unrest is constant. There are two immediate concerns: a collapse in investor confidence such as occurred in Argentina in 2001, and the rising radicalism of Brazil’s poor. A movement of landless rural and urban squatters has gained ground in recent years, occupying public buildings and empty farmlands. The government might like to move against these squatters, but hesitates for fear of provoking more unrest. Foreign aid might help, especially if it promoted public health in urban slums or rural clinics. Brazil has some security concerns, such as the growing presence of smugglers, drug traffickers and terror organizations in the remote “tri-border region” of Brazil, Peru and Colombia. The United States could contribute aid in the form of helicopters, drone aircraft and communications technology, but does Brazil want to associate itself more closely with the US war on terror? Another issue concerns the Brazilian rainforest, now under development to open up land for farming and other uses. This deforestation has provoked an international outcry, but the government can do little to halt the process while poverty is such a problem. There are concerns about the treatment of some Indian tribes, as well as the poor, especially young people in the cities. Brazil might like to support initiatives that divert attention away from these problems.