Brazil

History

Brazil was part of the Portuguese empire from 1530 to 1822, when the country obtained its independence mainly as a result of the Napoleonic Wars, which had even forced the Portuguese king to flee there in 1807. During these centuries, Brazil's economy supported the Portuguese empire, first thanks to the exploitation of sugar production and then to the extraction of gold.

As an independent country, Brazil mainly relied on agriculture until the world economic crisis of the 1930s. The production of coffee played a particularly significant role in the country's economy and accounted for more than half of Brazil's exports. The gold cycle and the production of coffee kept the flow of immigration from European countries and from Japan steady during the 18th and 19th centuries. It was only after the 1930s that the country started to diversify its economic activities and industrialize.

The flow of European immigration and the emigration of peasants to urban areas, particularly to Rio de Janeiro, caused, together with the economic crisis, the massive growth of favelas (shantytowns or slums; the term comes from the name of a plant that grows on the hillsides of Rio), a phenomenon that still characterizes the country today and has even been turned into a tourist attraction for foreigners.

The industrialization process started in the 1930s, aimed at the containment of imports through support for domestic industries. The government played an important part in the industrialization of the country with direct investments. Thus the state, no matter the political orientation of the politicians who ruled it, held the control of large parts of the Brazilian economy for much of the 20th century. On the contrary, the private sector was weak and relying on public funding. Since the 1990s, Brazilian economy has become more market-oriented.

The interventionist policy of the government caused substantial growth in the 1960s and 1970s. Yet the benefits of this growth were unequally distributed so that questions of social and economic inequality remained unanswered. During the 1980s, however, the Brazilian economy fell dramatically. The process of making Brazil a developed country stopped abruptly in this decade.

Between 1980 and 1994, this fall brought the yearly average growth of the Gross Domestic Product to a limited 1.07 percent. In turn, per capita incomes were badly hit during the period. Inflation experienced a disproportionate four-digit growth that penalized citizens with low incomes and contributed to raise the already high social inequality.

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