Students will research the general development (growth) experience of a country or a region (e.g., Middle East and North Africa). The aim of this assignment is to do a background reading and research for the chosen country or region. Learner should provide critical discussion and analysis about the development (growth) experience of the chosen country or region over time (e.g., analysing the main determinants of economic development or growth). The analysis should include data on growth (development) and other key indicators to explain the main determinants of economic development (growth). Political and social factors that have been important for the economic development of a country should be included in the discussion (e.g., government policies). Finally, learner should critically analyse how global factors (e.g., trade agreements, etc.) affect economic development (growth) of a country or region.

Brief History of Brazil
Brazil was discovered in 1500 by Portuguese explorers and was subsequently run under Portuguese rule. For the purpose of this assignment Brazil’s economy development experience since the country gained independence from Portugal; which happened in 1822. Since then Brazil has overcome dictatorships, citizen unrest and political corruption to become the sixth largest economy in the world and one of the world’s four emerging country’s known as the BRIC’s (CNN Money, 2013).
Independence 1822- 1870
Following Brazil’s independence there was difficult times as there are for most newly independent nations. These difficult times steamed from the fact that their domestic economy was depressed. The only sector of the country’s economy was the maintenance of the new country. All the resources that the country had including land, animals and of course, because it was taken place before the abolishment of slavery, slaves (Photius, 2004). Before the independence of Brazil a poor domestic economy would have been offset by a ‘booming’ export economy. However due to the fact the Brazil was a new country they had to win the recognition of the countries to gain their trade (Soul Brasileiro, 2014). In order to counteract this Brazil signed a treaty to recognise Brazil as an independent state. This treaty opened a trade link between Britain and the new independent state. Portugal also benefitted from the treaty as because Brazil agree to pay off the loans that the Portuguese government had received from Britain in order to push through the treaty (Soul Brasileiro, 2014).
Coffee 1870-1930
Following this treaty with being signed with Britain; Brazil’s exports soared dramatically however none of these exports came to the success of coffee. Coffee had been grown in Brazil since the early eighteenth century; it had been domestically consumed, with a small amount reaching the coffee houses of Europe (Baer, 2001). However when North American and European countries embarked on their industrial revolutions the living conditions for their peoples increased the demand for coffee increased and the rapid growth can be seen in the table below:

Year | Coffee Exports (1000 bags, 60 kg each) | 1821-30 | 3,178 | 1831-40 | 10,430 | 1841-50 | 18,367 | 1851-60 | 27,339 | 1861-70 | 29,103 | 1871-80 | 32,509 | 1881-90 | 51,631 |

At the beginning of the coffee surge the majority of Brazil’s coffee production took place in the Northern and Western areas of Rio de Janeiro, mainly the Paraíba Valley using basic techniques that required the use of slaves. The slaves would grow the coffee beans then the beans would be shipped by mule train to the Rio de Janeiro port where the exports would then be dispatched from (Baer, 2001). However towards the end of the 1870’s the demand for coffee began to exhaust the land in the Paraíba Valley so the production migrated south toward São Paulo and then expanded all over the state. Because the countries relationship with Britain was still a good and productive one Britain sent money and engineers to build a railroad that ran from São Paulo to Santos, the nearest port (Soul Brasileiro, 2014). The abolishment of slavery did not come until 1888; however even before this, from around 1880, the Brazilian coffee industry had moved away from slave labour to paid employees. This had a two-fold impact on the coffee industry; the first was that the efficiency of the workers had improve (Soul Brasileiro, 2014). This was a radical move at the time and many were surprised that the efficiency of the industry had improved because it was thought that forcing people to work would make them work more than paying them would (Baer, 2001). Of course now as we look back in seems obvious that people who are being paid and have better living conditions will work better than slaves. The second impact that moving to paid labour had on the coffee industry was that there was slightly before and more so after the abolishment of slavery there was an influx immigrant workers, the majority of who were from Europe (Catão, 1992). Due to the rapid growth of coffee; it rose from 19% of Brazil’s total exports in 1821 to 63% in 1891, there can be no doubt the coffee industry is what drove the Brazilian economy in the nineteenth country. But this coffee surge did much more for Brazil as a country than just provide an income; firstly it made the state of São Paulo economic centre of the entire country and even now in 2014 it is the centre of the country. Coffee production being moved to São Paulo brought its own advantages to the country; the move to São Paulo brought with it a huge foreign investment in the infrastructure of the country, which means that the profits from the coffee exports could be spent on paying the workers instead of employing slaves and the profits being spent on developing the country (Baer, 2001). This payment of wages is what brought in the immigrant workers that have given Brazil the cultural diversity that makes it such a popular tourist destination to this day. So the country is still benefitting from these immigrant workers now.
Sweeping Changes 1930-1945
If in the period leading up to 1930 the coffee industry had saved and greatly developed the Brazilian economy then in the 1930’s it threatened to be the economy’s demise. The profitability of the coffee industry suffer a huge decline in the 1930’s, as did most industries, this was caused by the ‘Great Depression’. During the ‘Great Depression’ world trade as a whole declined by 50% (Frank & Bernanke, 2007) this hit the coffee industry especially due to the fact the coffee industry had done so well before this period and expanded so vastly that now during the ‘Great Depression’ the country had an capacity far greater than the demand required. This of course leads to a sharp fall in the price of coffee which then remained low; because of how dependant Brazil had become on the coffee industry the country’s trade suffered huge. This fall in trade led to an ever increasing international debt that threatened to bankrupt the coffee industry but the entire Brazilian economy (Dean, 1969). The state programs that had been put in place to support the coffee industry had gone bankrupt by 1930; so in order to avoid the price of coffee dropping any further the Brazilian government bought huge reserves of coffee. The reason that the government had purchased so much coffee was to destroy the country’s stocks. The coffee was destroyed in order to increase the international prices; another reason behind the destruction of the coffee stocks was that before the ‘Great Depression’ the storing of the product had been largely paid for by foreign loans which had stopped due to the depression (Netto, 1959 cited by Astorino &Rodrigues Jr, 2013). Following these problems with the economy the Brazilian people became disenchanted we the government with lead to a coup in 1937 which lead to the Estado Novo (New State) dictatorship taking charge of the government. While Estado Novo were in power they began work on the largest government enterprise the country had seen. This enterprise was a steel mill known as Companhia Siderurgica Nacional (CSN) this endeavour proved to be very successful for the new government. The proof of this is that CSN is still running effectively and is the second largest steel manufacturer in Brazil at this time (CSN, 2013). The development of this steel mill reduced the economy’s reliance on the coffee during World War II; the lower level of reliance allowed Brazil reduce the coffee production capacity in order to reduce the risk of excess products should demand drop again. During World War II output did increased from Brazil however this was from the workforce becoming more efficient as oppose to there being investment in the country’s infrastructure. This meant that once the war had ended and the world’s economy was ready to start to grow again Brazil were at a disadvantage compared to their competitors as both their industrial and transport infrastructure was either obsolete, deteriorated or bluntly put inadequate (Wirth & Dean, 1971).

After World War II there was more civil unrest in Brazil and the leader of Estado Novo was overthrown and Brazil once again became a democratically run country. General Gaspar Dutra was the man to take the helm of Brazil for the next six years and in that time Dutra recognised the problems with Brazil’s infrastructure and planned to improve upon it (Fausto, 1999). Dutra’s Presidency is remember in Brazil as the start of Brazil’s industrialisation; while Dutra was in power he advanced the highway network including a road linking the country two largest economic cities, São Paulo and Rio de Janeiro. He also refused to give permission to foreign oil companies to expand Brazil oil industry in order to keep the profits in the country. But perhaps the biggest contribution that Dutra made during his Presidency was to start the CHESF hydroelectric company which according to United Nations (1979) was the start of Brazil’s, very successful, relationship with renewable energy. In 2010 it was found the 44% of all Brazil’s energy supply was from renewable resources (IEA, 2010 cited in Zeiss, 2013).
Import-Substitution Industrialisation
After Dutra’s term had finished General Vargas, the former head of Estado Novo was elected to power again. When he first took control his first policy discouraged imports of consumer goods with the hope that this policy would kick start the economy. He realised early in the 1950’s that this policy would not give the economy the rapid growth that he desired; this prompted him to adopt an import-substitution industrialisation policy. (Baer, 1972)
Growth 1968-1980
Between the years of 1962 and 1967 the Brazilian economy was in a state of stagnation with GDP growing at between 3.9%-4.0% (Baer, 2001). The policies that were implemented by the military government after 1964 and the general condition of the world’s economy led to the perfect conditions for Brazil’s economy to grow rapidly; GDP grew by an annual average of 11% and industry grew at an average of 13% (Cardoso & Teles, 2009). The post 1964 procedures allowed for a substantial growth in Brazil’s exports; however due to the increased inflows there was an increase in revenues there was also an increase in imports to the country as well. Usually this increased level of imports would be a worry to a country but the significant increase in the money coming into Brazil’s economy through exports and foreign direct investment they could easily balance out the surplus (Insight Guides, 2013). In the period the leading up to 1974 the Brazilian economy was doing so well that the military government changed their ideas for establishing a framework for growth in the future for a new scheme which would develop Brazil into an economic superpower that could compete with the likes of the USA and the UK. There was just one major problem with their plan and that was finding a way to finance their big dream because even if; the government, the public domestic companies and the foreign companies that had developed in Brazil all joined forces they would not be able to fund this plan (ibid).
Following the worldwide oil crisis in 1973; caused by the Arab oil producers embargo on American and the western world. The countries and banks had money that been left over from the lack of oil (Macalister, 2011). This led to them looking for an investment in the developing world and no investment looked more attractive at that time than Brazil. When the generals in charge meet with the investors from all around the show them how they envisaged the future for Brazil as a superpower in the global economy. The generals also had the figures to back up their view for the future; at that time none of the developing countries came close to Brazil when it came to the current growth rate and the potential for growth in the future. Of course the investors loaned the money to Brazil; and lots of it, in the following five years a total investment of $40 billion was made in Brazil. This money was invested in the country’s infrastructure, industry, communications and the most attractive sector for the investors was the energy sector (Insight Guides, 2013). This was attractive to the investors because Brazil had already made progress in renewable energy sources; if they could develop them further then the western countries could become less dependent on Arab oil producers (Kehoe & Prescott, 2002). The military government’s plan was being carried out with military precision until a second oil crisis took place in 1979 and doubled the price of the oil Brazil was importing to drive forward their development. The price of Brazil’s exports on the global market plummeted and all of a sudden the trade deficit which had been manageable was quickly worsening; and was three times larger than the previous year’s figures. However instead of cut cost which is now considered the norm in times of economic uncertainty; the generals decided that the best way to pay of the countries loan payments was to take out more loans (Insight Guides, 2013)
Crisis 1981-1993
Real Plan 1994-present
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