Brazil Forex
Posted by Forex AR on Thursday, May 14, 2009
Under: Brazil Forex

Brazil
, Port. Brasil, officially Federative Republic of Brazil, republic
(2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E
South America. By far the largest of the Latin American countries,
Brazil occupies nearly half the continent of South America, stretching
from the Guiana Highlands in the north, where it borders Venezuela,
Guyana, Suriname, and French Guiana, to the plains of Uruguay,
Paraguay, and Argentina in the south. In the west it spreads to the
equatorial rain forest, bordering on Bolivia, Peru, and Colombia; in
the east it juts far out into the Atlantic toward Africa. Brasília is the capital; the largest cities are São Paulo and Rio de Janeiro
. Land Brazil's vast territory covers a great variety of land and
climate, for although Brazil is mainly in the tropics (it is crossed by
the equator in the north and by the Tropic of Capricorn in the south),
the southern part of the great central upland is cool and yields the
produce of temperate lands. Most of Brazil's large cities are on the
Atlantic coast or the banks of the great rivers. The rain forests of
the Amazon
River basin occupy all the north and north central portions of Brazil.
With the opening of the interior in the 1970s and 80s, these rain
forests were heavily cut and burned for industrial purposes, farming,
and grazing land. Beginning in the late 1980s, popular international
movements, along with changes in government policy, began to reduce the
rate of deforestation, but by the mid-1990s extensive burning was again
occurring. New policies appeared to slow deforestation in the early
21st cent., but it reemerged as a significant problem in late 2007. The
Amazon region includes the states of Amazonas , Pará , Acre , Amapá , Roraima , and Rondônia ; its chief city is Manaus
. Although it is not as developed as other parts of Brazil, the Amazon
region produces timber, rubber, and other forest products such as
Brazil nuts and pharmaceutical plants. Gold mining, ecotourism, and
fishing are also important. At the mouth of the Amazon is the city of Belém
, chief port of N Brazil. Southeast of the Amazon mouth is the great
seaward outthrust of Brazil, the region known as the Northeast. The
states of Maranhão and Piauí form a transitional zone noted for its many babassu and carnauba palms. The Northeast proper—including the states of Ceará , Rio Grande do Norte , Paraíba , Pernambuco , Alagoas , Sergipe , and the northern part of Bahia
—was the center of the great sugar culture that for centuries dominated
Brazil. The Northeast has also contributed much to the literature and
culture of Brazil. In these states the general pattern is a narrow
coastal plain (formerly supporting the sugarcane plantations and now
given over to diversified subtropical crops) and a semiarid interior,
or sertão
, subject to recurrent droughts. This region has been the object of
vigorous reclamation efforts by the government. The "bulge" of Brazil
reaches its turning point at the Cape of São Roque. To the northeast
lie the islands of Fernando de Noronha , and to the south is the port of Natal
. South of the "corner" of Brazil, the characteristic pattern of S
Brazilian geography becomes notable: the narrow and interrupted coastal
lowlands are bordered on the west by an escarpment, which in some
places reaches the sea. Above the escarpment is the great Brazilian
plateau, which tapers off in the southernmost state, Rio Grande do Sul,
where it is succeeded by the plains of the Río de la Plata country. The
escarpment itself appears from the sea as a mountain range, generally
called the Serra do Mar [coast range], and the plateau is interrupted
by mountainous regions, such as that in Bahia, which separates E Bahia
from the valley of the São Francisco River. The chief cities of the
Northeast are the ports of Recife in Pernambuco and Salvador in Bahia. There are a number of excellent harbors farther south: Vitória in Espírito Santo; Rio de Janeiro, the former capital, one of the most beautiful and most capacious harbors in the world; Santos , the port of São Paulo and the one of the greatest coffee ports in the world; and Pôrto Alegre
in Rio Grande do Sul. In the east and southeast is the heavily
populated region of Brazil—the states that in the 19th and 20th cent.
received the bulk of European immigrants and took hegemony away from
the old Northeast. The state of Rio de Janeiro , with the great steel center of Volta Redonda , is heavily industrialized. Neighboring São Paulo
state has even more industry, as well as extensive agriculture. The
city of São Paulo, on the plateau, has continued the vigorous and
aggressive development that marked the region in the 17th and 18th
cent., when the paulistas went out in the famed bandeiras (raids),
searching for slaves and gold and opening the rugged interior. They
were largely responsible for the development of the gold and diamond
mines of Minas Gerais state, the second most populous state in Brazil, and for the building of its old mining center of Vila Rica ( Ouro Prêto ), succeeded by Belo Horizonte
as capital. Minas has some of the finest iron reserves in the world, as
well as other mineral wealth, and has become industrialized. Settlement
also spread from São Paulo southward, particularly in the 19th and
early 20th cent. when coffee from São Paulo's terra roxa [purple soil]
had become the basis of Brazilian wealth, and coffee growing spread to Paraná
. That state, in the west, runs out to the "corner" where Brazil,
Argentina, and Paraguay meet at the natural marvel of the Iguaçu Falls
on the Paraná River. The huge Itaipú Dam, built from the early 1970s
through the mid-1990s by Paraguay and Brazil, provides power for most
of southern Brazil. The more southern states of Santa Catarina and Rio Grande do Sul
, developed to a large extent by German and Slavic immigrants, are
primarily cattle-raising areas with increasing industrial importance.
Frontier development is continuing in central Brazil. The state of Mato Grosso
is still largely devoted to stock raising. The transcontinental
railroad from Bolivia spans the southern part of the state. The federal
district of Brasília was carved out of the neighboring plateau state of
Goiás , to
the east, and the national capital was transferred to the planned city
of Brasília in 1960. People Brazil has the largest population in South
America and is the fifth most populous country in the world. The people
are diverse in origin, and Brazil often boasts that the new "race" of
Brazilians is a successful amalgam of African, European, and indigenous
strains, a claim that is truer in the social than the political or
economic realm. More than half the population is of European descent,
while another 40% are of mixed African and European ancestry.
Portuguese is the official language and nearly universal; English is
widely taught as a second language. Most of the estimated 350,000 to
550,000 indigenous peoples (chiefly of Tupí or Guaraní
linguistic stock) are found in the rain forests of the Amazon River
basin; 12% of Brazil's land has been set aside as indigenous areas.
About 75% of the population is at least nominally Roman Catholic; there
is a growing Protestant minority. Economy Brazil has one of the world's
largest economies, with well-developed agricultural, mining,
manufacturing, and service sectors. Vast disparities remain, however,
in the country's distribution of land and wealth. Roughly one fifth of
the workforce is involved in agriculture. The major commercial crops
are coffee (Brazil is the world's largest producer and exporter),
citrus fruit (especially juice oranges, of which Brazil also is the
world's largest producer), soybeans, wheat, rice, corn, sugarcane,
cocoa, cotton, tobacco, and bananas. Cattle, pigs, and sheep are the
most numerous livestock, and Brazil is a major beef and poultry
exporter. Timber is also important, although much is illegally
harvested. Brazil has vast mineral wealth, including iron ore (it is
the world's largest producer), tin, quartz, chrome ore, manganese,
industrial diamonds, gem stones, gold, nickel, bauxite, uranium, and
platinum. Recently discovered offshore petroleum and natural gas
deposits could also make the nation a significant oil and gas producer.
There is extensive food processing, and the leading manufacturing
industries produce textiles, shoes, chemicals, steel, aircraft, motor
vehicles and parts, and machinery. Most of Brazil's electricity comes
from water power, and it possesses extensive untapped hydroelectric
potential, particularly in the Amazon basin. In addition to coffee,
Brazil's exports include transportation equipment, iron ore, soybeans,
footwear, motor vehicles, concentrated orange juice, beef, and tropical
hardwoods. Machinery, electrical and transportation equipment, chemical
products, oil, and electronics are major imports. Most trade is with
the United States, Argentina, China, and Germany. Brazil is a member of
Mercosur
. Government Brazil is governed under the 1988 constitution as amended.
The president, who is elected by popular vote for a four-year term (and
may serve two terms), is both head of state and head of government.
There is a bicameral legislature consisting of an upper Federal Senate
and a lower Chamber of Deputies. The 81 senators are elected for eight
years and the 513 deputies are elected for four years. The president
may unilaterally intervene in state affairs. Administratively, the
country is divided into 26 states and one federal district (Brasília);
each state has its own governor and legislature. The main political
parties are the Brazilian Democratic Movement party, the Liberal Front
party (now known as the Democrats party), the Democratic Labor party,
the Brazilian Social Democracy party, and the Workers party. History
Early History There is evidence suggesting possible human habitation in
Brazil more than 30,000 years ago, and scholars have found artifacts,
including cave paintings, that all agree date back at least 11,000
years. By the time Europeans arrived there was a relatively small
indigenous population, but the archaeological record indicates that
densely populated settlements had previously existed in some areas;
smallpox and other European diseases are believed to have decimated
these settlements prior to extensive European exploration. The
indigenous peoples that survived can be classified into two main
groups, a partially sedentary population that spoke the Tupian language
and had similar cultural patterns, and those that moved from place to
place in the vast land. It is estimated that approximately a million
indigenous people were scattered throughout the territory. Whether or
not Brazil was known to Portuguese navigators in the 15th cent. is
still an unsolved problem, but the coast was visited by the Spanish
mariner Vicente Yáñez Pinzón (see under Pinzón, Martín Alonso ) before the Portuguese under Pedro Alvares Cabral in 1500 claimed the land, which came within the Portuguese sphere as defined in the Treaty of Tordesillas
(1494). Little was done to support the claim, but the name Brazil is
thought to derive from the Portuguese word for the red color of
brazilwood [ brasa =glowing coal], which the early visitors gathered.
The indigenous people taught the explorers about the cultivation of
corn, the construction of hammocks, and the use of dugout canoes. The
first permanent settlement was not made until 1532, and that was at São Vicente in São Paulo. Development of the Northeast was begun about the same time under Martím Afonso de Sousa
as first royal governor. Salvador was founded in 1539, and 12
captaincies were established, stretching inland from the Brazilian
coast. Portuguese claims, somewhat lackadaisically administered, did
not go unchallenged. French Huguenots established themselves (1555) on
an island in Rio de Janeiro harbor and were routed in 1567 by a force
under Mem de Sá
, who then founded the city of Rio de Janeiro. The Dutch made their
first attack on Salvador (Bahia) in 1624, and in 1633 the vigorous
Dutch West India Company was able to capture and hold not only Salvador
and Recife but the whole of the Northeast; the region was ably ruled by
John Maurice of Nassau
. No aid was forthcoming from Portugal, which had been united with
Spain in 1580 and did not regain its independence until 1640. It was a
naval expedition from Rio itself that drove out the Dutch in 1654. The
success of the colonists helped to build their self-confidence. Farther
south, the bandeirantes from São Paulo had been trekking westward since
the beginning of the 17th cent., thrusting far into Spanish territory
and extending the western boundaries of Brazil, which were not
delimited until the negotiations of the Brazilian diplomat Rio Branco
in the late 19th and early 20th cent. The Portuguese also had ambitions
to control the Banda Oriental (present Uruguay) and in the 18th cent.
came into conflict with the Spanish there; the matter was not
completely settled even by the independence of Uruguay in 1828. The
sugar culture came to full flower in the Northeast, where the
plantations were furnishing most of the sugar demanded by Europe.
Unsuccessful at exploiting the natives for the backbreaking labor of
the cane fields and sugar refineries, European colonists imported
Africans in large numbers as slaves. Dependence on a one-crop economy
was lessened by the development of the mines in the interior,
particularly those of Minas Gerais, where gold was discovered late in
the 17th cent. Mining towns sprang up, and Ouro Prêto became in the
18th cent. a major intellectual and artistic center, boasting such
artists as the sculptor Aleijadinho
. The center of development began to swing south, and Rio de Janeiro,
increasingly important as an export center, supplanted Salvador as the
capital of Brazil in 1763. Ripples from intellectual stirrings in
Europe that preceded the French Revolution and the successful American
Revolution brought on an abortive plot for independence among a small
group of intellectuals in Minas; the plot was discovered and the
leader, Tiradentes , was put to death. When Napoleon's forces invaded Portugal, the king of Portugal, John VI
, fled (1807) to Brazil, and on his arrival (1808) in Rio de Janeiro
that city became the capital of the Portuguese Empire. The ports of the
colony were freed of mercantilist restrictions, and Brazil became a
kingdom, of equal status with Portugal. In 1821 the king returned to
Portugal, leaving his son behind as regent of Brazil. New policies by
Portugal toward Brazil, tightening colonial restrictions, stirred up
wide unrest. Independence and the Birth of Modern Brazil The young
prince eventually acceded to popular sentiment, and advised by the
Brazilian José Bonifácio , on Sept. 7, 1822, on the banks of the Ipiranga River, allegedly uttered the fateful cry of independence. He became Pedro I
, emperor of Brazil. Pedro's rule, however, gradually kindled
increasing discontent in Brazil, and in 1831 he had to abdicate in
favor of his son, Pedro II
. The reign of this popular emperor saw the foundation of modern
Brazil. Ambitions directed toward the south were responsible for
involving the country in the war (1851-52) against the Argentine
dictator, Juan Manuel de Rosas, and again in the War of the Triple
Alliance (1865-70) against Paraguay. Brazil drew little benefit from
either; far more important were the rise of postwar discontent in the
military and beginnings of the large-scale European immigration that
was to make SE Brazil the economic heart of the nation. Railroads and
roads were constructed, and today the region has an excellent
transportation system. The plantation culture of the Northeast was
already crumbling by the 1870s, and the growth of the movement to
abolish slavery, spurred by such men as Antônio de Castro Alves and
Joaquim Nabuco
, threatened it even more. The slave trade had been abolished in 1850,
and a law for gradual emancipation was passed in 1871. In 1888 while
Pedro II was in Europe and his daughter Isabel
was governing Brazil, slavery was completely abolished. The planters
thereupon withdrew their support of the empire, enabling republican
forces, aided by a military at odds with the emperor, to triumph. In
1889 the republic was established by a bloodless revolution, with
Marshal Manuel Deodoro da Fonseca
as its first president. The rivalry of the states and the power of the
army in government, especially under Fonseca's unpopular Jacobinist
successor, Marshal Floriando Peixoto
, caused the political situation to remain uneasy. The expanding market
for Brazilian coffee and more particularly the wild-rubber boom brought
considerable wealth as the 19th cent. ended. Brazil in the Twentieth
Century The creation of rubber plantations in Southeast Asia brought
the wild-rubber boom to a halt and hurt the economy of the Amazon
region after 1912. Brazil sided with the Allies in World War I,
declaring war in Oct., 1917, and shared in the peace settlement, but
later (1926) it withdrew from the League of Nations. Measures to
reverse the country's growing economic dependence on coffee were taken
by Getúlio Vargas
, who came into power through a coup in 1930. By changing the
constitution and establishing a type of corporative state he
centralized government (the Estado Nôvo —new state) and began the
forced development of basic industries and diversification of
agriculture. His mild dictatorial rule, although it aroused opposition,
reflected a new consciousness of nationality, which was expressed in
the paintings of Cândido Portinari and the music of Heitor Villa-Lobos
. World War II brought a new boom (chiefly in rubber and minerals) to
Brazil, which joined the Allies in 1942, after coming close to backing
Germany, and began taking a larger part in inter-American affairs. In
1945 the army forced Vargas to resign, and Gen. Eurico Gaspar Dutra was
elected president. Brazil's economic growth was plagued by inflation,
and this issue enabled Vargas to be elected in 1950. His second
administration was marred by economic problems and political
infighting, and in 1954 he committed suicide. Juscelino Kubitschek
was elected president in 1955. Under Kubitschek the building of
Brasília and an ambitious program of highway and dam construction were
undertaken. The inflation problem persisted. On Apr. 21, 1960, Brasília
became Brazil's official capital, signaling a new commitment to develop
the interior of the country. In 1960 Jânio da Silva Quadros
was elected by the greatest popular margin in Brazilian history, but
his autocratic, unpredictable manner aroused great opposition and
undermined his attempts at reform. He resigned within seven months.
Vice President João Goulart
was his successor. Goulart's leftist administration was weakened by
political strife and seemingly insurmountable economic chaos, and in
1964 he was deposed by a military insurrection. Congress elected Gen. Castelo Branco
to fill out his term. Goulart's supporters and other leftists were
removed from power and influence throughout Brazil and, in 1965, the
president's extraordinary powers were extended and all political
parties were dissolved. A new constitution was adopted in 1967, and
Marshall Costa e Silva
succeeded Castelo Branco. In 1968, Costa e Silva recessed Congress and
assumed one-man rule. In 1969, Gen. Emílio Garrastazú Médici succeeded
Costa e Silva. Terrorism of the right and left became a feature of
Brazilian life. The military police responded to guerrilla attacks with
widespread torture and the formation of death squads to eradicate
dissidents. This violence abated somewhat in the mid-1970s. Gen.
Ernesto Geisel succeeded Médici as president in 1974. By this time,
Brazil had become the world's largest debtor. In 1977 Geisel dismissed
Congress and instituted a series of constitutional and electoral
reforms, and in 1978 he repealed all emergency legislation. His
successor, Gen. João Baptista de Oliveira Figueiredo
, presided over a period (1979-85) of tremendous industrial development
and increasing movement toward democracy. Despite these improvements,
economic and social problems continued and the military maintained
control of the government. Civilian government was restored in 1985
under José Sarney, and illiterate citizens were given the right to
vote. Sarney's reforms were initially successful, but increasing
inflation brought antigovernment protests. In 1988 a new constitution
came into force, reducing the workweek and providing for freedom of
assembly and the right to strike, and in 1990 President Fernando Collor de Mello
was elected by popular vote. As a result of increasing international
pressure, Collor sponsored programs to decrease the rate of
deforestation in Amazon rain forests and to protect the autonomy of the
indigenous Yanomami. In 1992, amid charges of wide-scale corruption
within his government, Collor became the first elected president to be
impeached by the Brazilian congress; he resigned as his trial began, to
be replaced temporarily by his vice president, Itamar Augusto Franco.
In 1994 the supreme court cleared Collor of corruption charges, but he
was barred from public office until 2001. Fernando Henrique Cardoso
was elected president in Oct., 1994, and took office in Jan., 1995. The
Cardoso government reduced state controls on the economy and privatized
government-owned businesses in telecommunications, oil, mining, and
electricity. With the help of a new stable currency, Cardoso was able
to bring inflation under control; he also signed decrees expropriating
new lands from private estates for redistribution to the landless poor.
Reelected in 1998, Cardoso was faced with an economic crisis as budget
deficits and a decline in foreign exchange reserves led to currency
devaluations and increased interest rates. Late in 1998, he appealed to
the International Monetary Fund, which assembled a $42 billion aid
package for the country. Brazil then began implementing a program of
stringent economic policies that restored investor confidence by
mid-1999 and led to economic growth. In May, 2000, Cardoso signed a
fiscal responsibility law that limited spending by the states; the
legislation was a result of fiscal crises in several Brazilian states.
A series of corruption scandals that undermined the governing coalition
in early 2001 was followed by an energy crisis that led the government
to order widespread cuts in electrical consumption from May until Mar.,
2002; the crisis resulted from a drought that reduced the water
available to produce hydropower and a decade-long increase in the
demand for electricity. Popular dissatisfaction with economic
austerities helped fuel the election of Lula da Silva
, of the opposition Workers' party (PT), to the presidency in 2002. Da
Silva's subsequent inauguration also marked the increasing stability of
Brazilian democracy; it was the first transfer of power between elected
presidents since 1961. The new president did not deviate greatly from
his predecessor's economic program, however, which alienated many
supporters on the left. Da Silva's government was hurt by a campaign
finance scandal in early 2004 and by an increase in unemployment, and
suffered losses in popular and congressional support, although economic
growth in 2004 was strong and unemployment subsequently decreased. In
June, 2005, the president was further hurt PT officials were accused of
buying the votes of some of its congressional coalition members. The
charges, made by the leader of a party in coalition with the president,
led to the resignation of the president's chief of staff (who was
expelled from the congress late in the year) and of the Workers' party
leader and treasurer and forced the president to reshuffle his cabinet
to shore up coalition support for his government. A separate bribery
scandal led to the resignation of the speaker of the House in
September, and in Mar., 2006, the finance minister resigned when he
also was ensnared in a bribery scandal. Although the president
weathered the scandals, they led to the sidetracking of social-reform
legislation he had proposed. Meanwhile, Amazonas state was hit by a
severe drought in 2005 when the dry season saw much less rainfall than
usual. A weeklong outbreak of rampant gang violence and, in turn,
police vengeance against the gangs erupted in mid-May, 2006, in São
Paulo state when a gang sought revenge for a government attempt to
break the influence of its imprisoned leaders and members. The violence
exposed a variety of ills in Brazil criminal justice system, including
corruption in the prisons and lawlessness among the police. São Paulo
experienced outbreaks of criminal gang violence in July and August as
well, and Rio de Janeiro experienced a series of gang attacks in late
December. The 2006 presidential election, in October, was inconclusive
after the first round. Da Silva won a plurality, but failed to win the
required majority; his campaign was hurt by the corruption scandals
that affected the PT and a late-breaking dirty-tricks scandal involving
his campaign organization. The runner-up, Geraldo Alckmin, the former
governor of São Paulo state, saw his campaign hurt by the recent
violence in the state. In the runoff at the end of the month, da Silva
won handily, securing 60% of the vote. Corruption scandals continued to
make news in 2007. The most prominent new cases occurred in May, when
the energy minister resigned after corruption allegations against him
became public and a major Brazilian newsmagazine reported that the
Senate president had taken payoffs; toward the end of the year the
Senate president resigned, though he remained a senator. In August, the
supreme court voted to charge da Silva's former chief of staff and the
former Workers' party treasurer with corruption. In Jan., 2008, Brazil
became a net creditor nation, in large part due to debt-reduction
measures undertaken by da Silva's government. Bibliography See G.
Freyre, Order and Progress; Brazil from Monarchy to Republic (tr.
1970); F. de Azevedo, Brazilian Culture (tr. 1950, repr. 1971); E. B.
Burns, A History of Brazil (2d ed. 1980); P. McDonough, Power and
Ideology in Brazil (1981); T. C. Bruneau, The Church in Brazil: The
Politics of Religion (1982); P. S. Falk and D. V. Fleischer, Brazil's
Economic and Political Future (1988); R. P. Guirmaraes, Politics and
Environment in Brazil (1991).
In : Brazil Forex