Latin America in the International System: Lecture 6 - R. James Ferguson © 2002

INTR12-221 & INTR71/72-221, The Department of International Relations, SHSS, Bond University, Queensland, Australia  

Week 6

Brazil: An Emerging, Revisionist 'Great Power'?

Topics: -

1. Formative Histories and the Many Brazils

2. The Politics of Democratisation

3. An Industrial Power, but with Limits

4. Brazil and Uneven Development

5. Brazil and its Economic Region

6. Brazil's Independent Foreign Policy

7. Bibliography and Resources

1. Formative Histories and the Many Brazils

Brazil is such a large and diverse country, geographically and politically, that it has sometimes been spoken of as 'several Brazils', with very different regional conditions in the North, Northeast, West Central, South and Southeast. This has led to the rise of regional identities, and to the challenge of 'forge' these regions into a single nation (Eakin 1998, p2). Yet taken together, Brazil is a state with enormous potential, and in Latin America comprises one of the potential 'great powers' in international terms. As noted by Lincoln Gordon: -

Brazil is the world's fifth largest nation-state in both area and population and ninth in total economic output. It accounts for more than one-third of Latin America's total population and production. Its economy in 1998 outranked that of all but the United States, Japan, China, and the four leading countries of Europe. Among America's <U.S.> export destinations in the Western Hemisphere, it is surpassed only by Canada and Mexico. It has the world's eight largest share of American direct foreign investments, far exceeding those in any other Latin American country. In recent years, it has also been a major destination for portfolio investment. (Gordon 2001, p1; brackets added)

Yet this potential never seems fully articulated or achieved, with numerous developmental problems holding back both the power of the state and the quality of life for many Brazilians. Brazil is sometimes spoken of as 'the once and future country'. Hence the Brazilian proverb: 'Brazil is the country of the future - and always will be.' (Eakin 1998, p1). The name of Brazil itself comes from the name for a hardwood, brasile, which was used to produce a red dye, one of the first commercial products used by the Portuguese.

External Resource:

For maps of Brazil and its neighbours, go to the Courtesy PCL Map Library at: -

Brazil has a huge resource base including iron ore, uranium, bauxite, manganese, timbre, coffee, sugar production, soybeans, orange juice and other strong agricultural exports so that the country is the fourth largest exporter of agricultural products (Eakin 1998, p4). Although it has considerable hydro-electric power resources, it has limited coal and petroleum resources (for new moves to increase oil and gas from Bolivian fields, see Bowen 1999). It has a current population of approx. 168 million, and its population is expected to stabilise in the 250-300 million range around the mid-21st century (Gordon 2001, p13).

External Resource:

For a Chronology of Important Events in Brazilian history, go to Hudson 1997, Table B, located at 

As usual, we will use a thematic approach to the simplify the history of Brazil. Major historical and development issues include: -

* Although the Tupí-Guaraní tribes of Brazil did not construct extended empires with stone architecture, they did form dispersed tribal groups who numbered 3-6 million in 1500 (Eakin 1998, p13). Indians of the Tupi language group, in particular, dominated a long stretch of the Atlantic coastline, and the Amazon and other major river systems (Ribeiro 2000, p11). They build pre-urban agricultural villages, utilising a wide variety of crops and clearing the forest as needed. The Indians viewed the arrival of the Europeans as a fearsome event, tinged with religious aspects, since perhaps they came from the creator of the people, Maíra (Ribeiro 2000, p19), but few would have realised that for most of them their way of life would be radically transformed. The early entry of the Amerindians into Brazil's colonial economy began on a number of fronts: direct conquest and enslavement, but also integration into European trade and barter networks, and then conversion by Christian missionaries. One major pretext for conquest and enslavement were the early accounts of cannibalism among some of these tribes (Ribeiro 2000, p25), which was viewed as non-Christian barbarism that must be exterminated at all costs. There were also certain utopian elements in some of the early Jesuit and Franciscan missions, which hoped to create protected areas where the 'innocence' of the Indians could develop into true Christian communities (Ribeiro 2000, pp33-35). This trend was soon crushed by the colonial need for land and slaves. Bandeiras or inland expeditions soon moved further afield in search of slaves, often conducted by 'Brazilindians or mamelucos', those who had European fathers and indigenous mothers (Ribeiro 2000, p58, p68). In spite of theoretical laws ensuring the freedom of the Indians, there were in fact numerous loopholes - thousands at a time were often enslaved at will.

* During the 15th and 16th centuries Portugal and Spain competed in their empire-building and trade networks, leading to the Treaty of Tordesillas of 1494, whereby Portugal gained control of the eastern parts of Brazil. Through the Treaty of Madrid in 1750 this boundary would be adjusted westward to allow Portugal to claim the territories it already controlled into the interior of Brazil, and allowing Spain control of the colonies along the Andes, the Caribbean and Pacific coast (Eakin 1998,p23). The powerful legacy of Portuguese language and culture is one of the layers of identity of Brazil. This has now emerged as a distinctive, diverse and inventive Luso-Brazilian culture in many ways rather different from its Portuguese origins, with distinctive features of popular social culture and the role of the family and honour (see Ramos 2000).

* Early Portuguese control of Brazil was not entirely secure. The Portuguese crown itself was for a time taken over by the Spanish (1580-1640), while from the 1620s the Dutch attacked several coastal cities and until the 1850s they occupied Recife (Eakin 1998, p21). The Portuguese also had to fight against loose alliances of Amerindians, e.g. the Confederation of the Tamoios, who sometimes could field thousands of warriors. Various Europeans, e.g. the French, Spanish and the Portuguese, used native armies in their conquests and wars (Ribeiro 2000, p12). One tribal group, the Gauikuru, adopted the horse and elements of Jesuit education, and for a time managed to threaten European expansion in the southern part of Brazil (Ribeiro 2000, pp13-15). From 1640 onwards Britain became one of the major commercial and political allies of Portugal, and the 19th century Britain was one of the main investors in Brazil.

* At first Brazil was viewed as a relatively poor colony, with the expansion of sugar plantations as one of the main ways that the Portuguese tried to boost revenues. Though this remained an important part of the economy for some centuries, Brazil soon had strong competition from Haiti and Cuba in this market. This was later followed by coffee as early as the 1840s, with Brazil soon emerging as the world leading exporter. At various times other agricultural products such as cacao, rubber, cotton, soya beans, and orange juice were of varying important in the national economy (Gordon 2001, p28), though as of 1999 agricultural only accounted for around 8.7% of GDP (DFAT 2000). One inventive product, Pro-Alcohol, a fuel made from sugarcane, though technically a success, has had to be subsidised and remains much higher than the cost of petrol (Gordon 2001, p100).

* It was in the context of the need for labour for sugar and coffee plantations that Brazil first began its massive importation of African slaves, especially due to the decimation of indigenous people, largely through lack of immunity to European diseases such as smallpox, as well as due to warfare and displacement. Enslavement of Amerindians would continued through to the 17th century, with slaving raids being launched into the interior. Some 3-4 million Africans were forcibly transported to Brazil (Eakin 1998, p18). However, African slaves and their descendants soon formed a major component of the agricultural and mining workforces, with many Africans coming from Angola, the Indian Ocean Coast, Ghana, and Benin, with some groups being Muslims, e.g. the groups such as the Male, Hausa, Mandinga and Fula (Geipel 1997; Lovejoy 1997). By the late 1990s, some 30-45% of Brazil had partial African backgrounds, though only 5% would be of unbroken African lineage (Geipel 1997; Eakin 1998, p19). Slavery itself was a crucial institution in the formation of the Brazilian economy, and it was only slowly dismantled between 1850 and the 1880s. These groups often formed religious associations, dedicated to proper prayer, decent burials, and in some cases to buying freedom for their members (see Nishida 1998).

* In Brazil of the 19th-20th century, the strong presence of African peoples, plus the mixing of Portuguese and Indians (caboclos), especially in the interior, created a racially diverse and varied population (Eakin 1998, p19). Certain Brazilian historians have spoken of the Republic of Brazil as an 'ethnic democracy', but this tends to ignore the fact the poverty and lack of education still correlate to some degree with people who strong African descent, or those who come from poorer rural areas. This meant that by the late 20th century, there was no strong bar on race per se, but rather more distinctions based on education, class and regional background. Ironically, the myth of race equality has made it harder for subtle forms of discrimination to be fought, and for a strong black movement to emerge and reclaim its unique cultural links with its African heritage (see Fitzpatrick 2002; White 1998).

* From 1887-1914 a second major wave of European migration, especially from Italy, Spain and Portugal, occurred, with some 2.7 migrants arriving in the south of Brazil (Eakin 1998, p34).

* The cultural formation of Brazil was thus shaped by several factors: "African music, religions, foods, and language patterns blended with the culture of the Portuguese and the Indians to produce a cultural mosaic that was not African, European, or Native American." (Eakin 1998, p33). Alongside these main streams there were smaller groups, e.g. some Arabic, Jewish, and Japanese migrants who added to the great diversity of Brazil (Ribeiro 2000, p2). From the early 1920s Brazilian intellectuals and artists sought for ways to merge this as a unique and authentic Brazilian culture (Eakin 1998, 40). These themes of Brazil as a modern culture with its own particular national traits, were taken up in the fifties by writers such as Gilberto Freyre (Geipel 1997; Gordon 2001, p9). Today, Brazil has vigorous and unique cultural sources of inspiration that have generated special musical (classical, folk, jazz and modern) forms, dance patterns and festivals, a strong modern literature and unique religious fusions (e.g. candomble) that form part of popular culture as well as help structure strong media and tourism industries (see McGowan & Pessanha 1998).

* The discovery of gold in the interior of the southeast from the 1690s radically boosted the wealth of the colony, leading to a 'golden age'. This led to rapid colonisation and population movement into the region of Minas Gerais (General Mines), helping the early push into the interior of Brazil (Eakin 1998, p23).

* There has been a tendency from the late 18th century onwards for economic and political dominance of the Southeast (particularly the states of Rio de Janeiro, São Paulo and Minas Gerais), to form the 'economic, political, and population core of the country' - here 43% of the population in 10% of the land generates about 65% of Brazil's wealth (Eakin 1998, p2; Gordon 2001, p11). This was in part due to the discovery of gold in Minas Gerais, and accelerated once the capital moved from Salvador to Rio de Janeiro in 1763. During the early Republican period between 1894 and 1930, the 'coffee states' of São Paulo, Rio de Janeiro and Minas Gerais tended to dominate the political system and the office of president. This group allowed local 'colonels' in the interior to control their regions in return for support for the national government (Eakin 1998, p38). This would lead to political violence in 1930 (the Revolution of 1930). The imbalance of development between the southeast and poor areas such as the northeast would continue through the 20th century (see below). Thus, for example, a special Superintendency for Development of the Northeast (SUDENE) would be created to try to balance agricultural development (Gordon 2001, p43) and poverty in this part of the country. 

* From the 19th century colonial elites in Brazil's Northeast (Salvador and Recife) and in the Southeast (Minas Gerais and Rio de Janeiro) soon began to develop a sense of political autonomy, and a need to greater economic autonomy (Eakin 1998, p26). However, history would lead Brazil along a very different path to independence than the revolutionary movements of the Hispanic colonies. In 1807, when the French invaded Portugal, the Portuguese crown, along with 10,000 dependents, moved en masse with the help of the British fleet to the safety of and economic strength of Brazil. In 1815 Napoleon was defeated but for a time the King João refused to return, at last advising his son Pedro to try to remain in Brazil. In 1822, Pedro broke with the restraining degrees of the Portuguese Parliament, and issued the famous cry "Independence or death! We have separated from Portugal!" (Eakin 1998, p29). In this way, with little more than token resistance from Portugal, Brazil became an independence kingdom based around a constitutional monarchy and the formation of a Brazilian empire. More serious, however, were the following twenty years of regional revolts which almost fractured the new nation (Eakin 1998, p29). Pedro in 1831 abdicated to reduce further bloodshed, and was then succeed by the young Pedro II, who took active power from 1840-1889.

* Early in its history Brazil became embroiled in expensive conflicts with Argentina over control of the Río de la Plata, leading in the 1820s to Cisplatine War, and then to the formation of the independent nation of Uruguay as a buffer state (Eakin 1998, p30). In the 1860s Brazil joined with Uruguay and Argentina in a six-year long, bloody but eventually 'successful' war against Paraguay. In the long run, Brazil and Argentina would tend toward geo-political competition, which would only be largely diffused in the 1980s, though some simmering negative attitudes remain.

* There was nonetheless a continued tendency for regions or layers of Brazilian society to engage in revolt, e.g. in 1897 the Canudos revolt in the interior of Bahia, following a mystic who rejected the modern, secular state (Eakin 1998, p39).

* Like much of Latin America, the early political system was divided among Conservatives and Liberals: -

Conservatives looked back to Iberian values and traditions for their inspiration and sought to maintain the influence of the Catholic Church, a strong centralized monarchy, and the slave economy. Liberals sought to mould their country in the image of England, France, and the United States. They wanted to diminish the influence of the Church, restrain centralization and monarchy, and move towards a free labor economy. These were the ideals. When in power, each tended to be pragmatic, sometimes implementing their opponents' programs (Eakin 1998, p31)

During the mid-19th century, these parties were balanced by the moderating power of the emperor, allowing Brazil a period of relative stability (Eakin 1998, p34).

* From the 1870s a Republican movement developed, seeking to end the monarchy, and, influenced by the positivist ideas of Auguste Comte and Herbert Spencer, to create a Republic on a model similar to that of the United States (Eakin 1998, p35). This ideas would also shape 'generations of military officers' (Eakin 1998, p35), who would in many ways see themselves as the guardians of a rational republic, leading to their intervention in politics (see below). A coup in 1889 led to Brazil's First Republic, while a new constitution was formulated in 1891, and again in 1988.

* From the 1920s Brazil would being to develop a small industrial base its major cities, followed by the creation of working and middle classes. Under state guidance and protectionism, this base would expand during the 1930s and 1940s, by which time Brazil was producing about 90% of its own consumer goods (Eakin 1998, p44). From the 1940s, with U.S. help, it would build the large steel complex at Volta Redonda, followed by strong industrial development through the 1950s and 1960s (see below).

* Partly as a counterbalance to the Southeast, the modern Brazil state moved to rapidly develop the Centre-West, especially with the placement of the modern capital of Brasília right into the middle of this 'heartland' in 1960 (Eakin 1998, p3). This accelerated the opening of this zone, which stretches into the southern Amazon, during the 1970s and 1980s.

* In spite of its large resource base and solid industrial development from the 1950s onward, Brazil faced major economic challenges. These included high levels of foreign debt, going as high as $120 billion, and through the 1980s periods of repeated recession and high inflation, at times reaching 50% a month (Eakin 1998, p3). Inflation rates have now been stabilised, but only with extreme difficult and the creation of a new currency, the real (see below).

2. Brazil the Politics of Democratisation

One of the problematic areas for modern politics has been the trend for politics to be based on party and individual coalitions, rather than sustained debates over the policies (the word política stands in for both the concept of policy and politics). In regional and local levels politicians can often change parties and coalitions and 'can do so because political parties tend not to represent divergent political philosophies as much as power alignments' (Finan 1999, p2). In this context, ordinary people often speak of the government as distinct from the people, 'o povo' (Finan 1999, p2). In general terms, this has led to conflictual politics even as the country has moved to a more open political system. 

In part this goes back to the strong, different regional legacies of Brazil, with local groups sometimes engaging in revolts against central authorities. This meant, in effect, that from the 1930s Brazilian politics has always had to try to find 'a workable and stable realignment' of existing powers and interest groups (Eakin 1998, p42). We can see this in the way one leader, Getúlio Vargas would be able to trade of these social forces, emerging as the head of a revolutionary government between 1930-1934, then as the president of an elected assembly in 1934, and then against at the head of coup which ushered in the 'New State' (Estado Novo) for some eight years (Eakin 1998, p43). Although pushed out off power by the military in 1945, he was elected president in elections in for 1950-54 period. Vargas was a 'populist' leader in that he sought to mobilise traditional groupings in society: combining nationalism, the rhetoric of social welfare, and continuing support for the 'coffee elite'. At various he also crushed the left and the Communist Party, and then later on the Integralists, Brazil's fascist party (Eakin 1998, p45). What is surprising about Vargas is that he could try to move above the politics of left and right, as well as to be both a dictator and an elected president. He tried to build a strong Brazil on the basis of state intervention in the economy and nationalisation of key industries, e.g. the national oil monopoly Petrobrás was created during this period, along with the National Steel Company in 1942 (Gordon 2001, p5, p41), but he had to fight high levels of inflation. He also became embroiled in political scandals and came under pressure to step down by the military high command: he then killed himself. Ironically, he posthumously appeared as a hero of Brazilian nationalism.

Brazil moved towards a serious 'experiment in democracy' during the 1945-64 period during which voting and mass support were needed by the elites that contested for power (Eakin 1998, p46). Major political parties such as the conservative UDN (União Democrática Nacional), the progressive PSD (Partido Social Democrático), the working class PTB (Partido Trabalhista Brasileiro) and the Communist Party (PCB) were active during this period, though the PCB was banned in 1947 (Eakin 1998, p47).

Perhaps the most successful in creating the image of Brazil as an emerging power was the 1955 President Juscelino Kubitschek, who used a strongly nationalist and developmentalist model to push forward Brazil industrial base, with the creation of steel and automotive industries, as well as improvements and infrastructure, and the creation of a new futurist capital in the interior, Brasília. The automotive industry began in earnest in 1956, with European and U.S. car companies being given favourable conditions for importing key components, to be followed by greater 'Brazilianisation' of content. By 1997, Brazil was producing 2 million vehicles a year, ranking eighth largest in global output (Gordon 2001, p41). At first, car production clustered tightly around the suburbs of São Paulo. Forward and backward linkages into component manufacturing and servicing helped develop the economy, while at the same time road networks and highways were greatly extended. However, the trends developed through the 1950s and 1960s were not all positive. The thinking of the period sought to replace imports of consumer goods, thereby reducing payments for imports. However, as the economy sought to modernise, it still needed the import of new components, production equipment, and some raw materials (such as petroleum), thus 're-creating the foreign exchange bottleneck in a new guise' (Gordon 2001, p46). On this basis, Brazil had 'to run twice as hard' to catch up with the developed world from which it still needed to import key items for its industrialisation policy, as well to which it needed to export competitive products.

Kubitschek was followed by Jânio Quadros who also sought to symbolise an industrial, efficient Brazil, but his administration soon fell into political chaos and a growing debt crisis and high inflation which continued under the following administration of João Goulart (Eakin 1998, p51). It was during this time that elements in the military command in Brazil began to see itself as part of the front line against worldwide Communism, and began to be concerned about a growing leftist elements, Peasant Leagues and labour organisations, even though these were relatively weak in terms of controlling national politics (Eakin 1998, pp53-54). President Goulart himself sought to mobilise mass support from the left and the trade unions, using public rallies and public media appeals that seemed to undermine the military chain of command, including a direct appeal to sergeants to disobey orders if they were not in the interest of the nation (Gordon 2001, p51 Eakin 1998, p55). It is not surprising that General Olímpio Mourão Filho soon ordered his to troops to move on the capital, followed by other garrisons, thereby staging a successful coup. There were also rumours that Goulart's overthrow had been aided indirectly by the United States. Though there is little strong evidence of this (Gordon 2001, p60), it is also true that the U.S. was annoyed by Goulart's leftist orientation and his 'anti-Yankee' foreign policy. It is also true that the U.S. did direct a naval task force (a carrier group) towards Brazil at the time of the coup, possibly to aid U.S. citizens within Brazil if needed, but also to exert psychological pressure in support of the anti-Goulart forces (Gordon 2001, p66).

Brazil thus suffered from military intervention after the collapse of democratic processes in 1964. Earlier (shorter) interventions where the army acted as a 'political broker' had occurred in 1889, 1930, 1937, 1945, 1954-55, and 1961 (Eakin 1998, p55). From 1964 the military moved to crush the left, as well as to try and solve the problems of the economy through a technocratic and nationalistic approach, including state intervention. Within the military itself there were the moderate followers of Castello Branco, who was first appointed president in 1964, as well as a group of hardliners who favoured permanent military rule (Gordon 2001, p73). After massive waves of unrest in 1968, including student protests and urban guerillas actions (for these movements, see Alves de Abreu 1997), the army became even more oppressive, using torture and execution against political opponents (Eakin 1998, p57). In the early 1970s up to 333 opponents of the government 'disappeared' (Gordon 2001, p74).

After a period of direct military rule, there was only a very gradual return ('relaxation' and 'opening') to full civilian power from 1975 to 1984 (Gordon 2001, p9), and only in 1989 were the first direct elections for the presidency held. As part of this process, in 1979 there was a widespread amnesty, apply both to guerrillas, and to police and military officers: this did not lead to justice, but it did avoid continued political warfare (Gordon 2001, p75) that may well have stopped the 'relaxation' of military power. It was during this period (1964-1985) that Brazil's relationship with the U.S. was at its height, based on Washington's need for anti-communist partners, and a sense that Brazil as an emerging power would be a useful regional power (Perry 2000).

This return to civilian rule also involved the drafting of a new Constitution: -

The Constitution of 1988, drafted by an assembly composed of elected member of Congress (deputies and senators) and containing 245 articles and 70 "transitional provisions," reflected a populist reaction against the military regime. It gave constitutional protection not only for vital civil rights and liberties but also for social and economic privileges for a large array of special interest groups. Together with political party and electoral mechanics, which greatly overweight parochial interests and give undue strength to states and municipalities at the expense of the central government, it created high hurdles for economic and social reforms essential to full modernization. (Gordon 2001, pp2-3)

Democratic life was to receive further shock even in the 1991. President Fernando Collor de Mello, in spite of his earlier popularity, was impeached in 1991, with investigations then indicating widespread graft and corruption of segments of congress (Eakin 1998, p3). This indicated some of the traditional weaknesses of Brazilian politics, but in spite of this his impeachment, and the current widespread media attention given to politics indicates that democracy as a competitive system was vigorous alive.

Through the mid and late 1990s, the current Cardoso administration has moved to effectively stabilise Brazil in a number of ways. His mandate to rule from the elections of 1994, supported by the Brazilian Social Democratic Party (PSDB), the center-right Liberal Front Party (PFL) and the smallish Brazilian Workers' Party (PTB), was largely based on an effective financial stabilisation program that greatly slowed the inflation of the early 1990s (see below). His second term however, leading up to the 2002 elections, however, has revealed the limits of how far reform could be taken. Not all aspects of his 'austerity, de-bureacratization, trade liberalization, and privatization' program (Perry 2000) could be fully realised in the complex legal and political system of Brazil. At present, the political system favours a strong presidential system, moderated by set payments to states and towns, with a weaker emphasis on the parliamentary system (Gordon 2001, p151). In electoral politics, parties are driven more by particular and local interests, including the creation of jobs and local projects (fisiologismo) rather than strong adherence to party policy platforms (Gordon 2001, p156). Corruption and local violence can thus still intervene in political life.

As noted by William Perry: -

Cardoso's problems in completing his liberalization and austerity agenda after five long years have a great deal to do with the fragmented and anarchic nature of Brazil's political system (and the culture it reflects). Under the constitution of 1988, the president wields apparently wide powers. But in practice he is substantially constrained by the need to secure congressional concurrence on regular legislation, the budget, and many restructuring issues, not to mention constitutional changes, which require particularly cumbersome procedures. Brazil is also a notably corporatist society in which a host of private and public groups and institutions have a long history of working doggedly to protect their own interests. (Perry 2000)

The taxation, pension, education, and health care systems are also in need of serious reform. Though free and universal primary education is constitutionally guaranteed (Gordon 2001, p125), funding and quality of education is highly variable, e.g. tertiary education is well-provided for, but the quality of primary and secondary education various greatly. Though access to primary education has increased greatly, there are still real short-falls in some areas of secondary education (Gordon 2001, p133).

At present the 'political heat' is picking up in Brazil is picking up in preparation for mayoral, national, state, and presidential elections later in 2002. As parties and leaders position themselves for the future, there is no guarantee that the reforms launched by Cardoso are yet self-sustaining (Perry 2000) with further funding and political consensus. Possible contenders for future political power include Itamar Franco, Lula da Silva, Ciro Gomes, and Roseana Sarney (Perry 2000; Weinoldt 2001).

3. An Industrial Power, but with Limits

Brazil is a large, resource-rich country which has developed strongly in key areas of industrial and agricultural production. In its earlier stages industrial production it had developed an import replacement approach, aided by strong state intervention in key sectors of the economy (see above). From the 1960s there was a move towards a shared system of tripartite ownership, whereby the Brazilian encouraged a system for strategic industries whereby the Brazilian government, foreign investors, and Brazilian foreign investors which each own a stake in major firms (Gordon 2001, p79). Serious problems, including the oil crises of the 1970s, soon began to impact on Brazil's developmental path: -

Nor did Brazil's export performance worsen during the mid-1970s, even though industrial country growth was sharply retarded by the oil shock of 1974. . . . export growth became slower than during the miracle years <1868-1973> but was still substantial through 1981, even after correcting for inflation. But the import bill rose much more rapidly, while the debt-service ratio (interest plus amortization payments as a proportion of export earnings) entered the alarming range of 40 to 70 percent . . . The policymakers had clearly overestimated the gains to the balance of payments from their drive toward import substitution in capital and intermediate goods. They had also encouraged state-owned industries to borrow heavily from foreign commercial banks at variable rates tided to the London interbank borrowing rate (LIBOR), a policy that helped keep inflation down for a few years but proved enormously costly when world interest rates soared and Brazil's credit standing was undermined by the Mexican financial crisis of 1982 (Gordon 2001, p85).

Put simply, the benefits expected from strong growth and exports were undermined by strong borrowing on international capital markets (Perry 2000).

By the 1980s certain segments of Brazil's industrial complex were able to compete was regional and global exporters: thus Brazil became a major producer of automobiles, aircraft and armaments, with São Paulo emerging as one of the largest industrial centres in the Americas (Eakin 1998, p4). Brazil was also a major market for computers, and the Brazilian government (somewhat less successfully) tried to foster a cyber-revolution that would lay the foundation for a national computer industry. This was followed by the production of industrial machinery, as well as a greater number of engineers and professionals entering the workforce through the 1980s (Gordon 2001, p98).

Several problems have traditionally challenged Brazilian governments. These have included a tendency towards high inflation through the 1970s, 1980s and early 1990s (around 1,400% for the period 1990-1994), problems with a large government administrative structure to maintain, problems in securing and reforming the taxation process, and the need to fulfil the social and economic reforms implied in the 1988 Constitution. The stabilisation plan for the currency boosted Fernando Henrique Cardoso in the office of President in the 1994 elections. The inflation rate thereafter dropped down to around 8.4%, though there was then a gradual slide in an overvalued new currency, the real (Crookers 2001; Gordon 2001, p3). This and growing deficits in the current balance of payments led to financial problems in 1999, but a serious crisis was headed off by a $41 billion aid package, supported by the IMF and the U.S. (Gordon 2001, p3). Controversial ongoing issues concern the Brazil Central Bank (first created in 1965), and how new laws might be passed to make it more immune from political interference. This issue may (or may not) be voted on in the year 2002, since the legislation involved remains highly controversial (Ferreira 2002).

Brazil has emerged as an industrial power and as a country with strong agricultural resources. However, average GDP growth for South America has been predicted as only 1.5%, largely due to slow global growth (Sissell 2001, p18), indicating potential future limitations, with GDP for 2002 predicted for Brazil at only 2%, though the predicted low inflation rate of about 5% is a good sign (Sissell 2001). Problems in energy infrastructure and production, leading to companies to shut down for periods to reduce energy consumption and to periods of electricity rationing especially during periods of drought (Prates 2001), upcoming presidential elections (Sissell 2001), and medium-term effects from Argentina's economic crisis also indicate areas where more instability can occur. Brazil also has problems in complex tax rules, tax evasion, and a large informal economic sector that may comprise up to one third again of the 'recorded economy' (Gordon 2001, p31). Nonetheless, Brazil in industrial and economic terms is in many ways stronger than Mexico or Argentina in terms of economic stability and commercial competitiveness (Gordon 2001, p116).

4. Brazil and Uneven Development

In spite of its strong growth as a nation, Brazil suffers uneven development in a number of ways. Brazil has one of the largest gaps between rich and poor in the world (based on the Gini coeffecient), though this is based not so much on absolute poverty as the fact that the wealth of the rich has increased faster than poorer groups (Gordon 2001, p21). Absolute poverty began to decline from the 1970s, rated at 42% of families in 1970 and down to 22% of families in 1980 (Gordon 2001, p96). Thus, in spite of rapid economic growth nationally between 1960 and 1990, the gap between rich and poor grew faster than any other country in the world, with the most unequal distribution globally (Eakin 1998, p5). The poor include the rural poor, as well as large segments of urban dwellers living in shanty town (favelas) on the outskirts of major cities, e.g. 4 million in the favelas of Rio and São Paulo (Eakin 1998, p5). Perhaps about one third of the population is marginalised from the mainstream, modern economy (Gordon 2001, p21). Major problems that remain include the landless poor, and the need for land reform has continued to remain a major challenge for the Brazilian state. The problem here is not just giving land away by pushing back the frontiers in the Amazon or improving soil in the central cerrado plateau (Gordon 2001, p126), but the issue of providing the resources, training, inputs and markets that would make a class of small farmers viable in the current period of large-scale agricultural businesses.

In this context, it is not surprising that peasant leagues soon formed, from the 1950s onward, with the aim of improving the lot of peasants, the landless, and rural poor. Laws for land reform and compensation for seized land exist in Brazilian law, but were soon found very difficult to apply through the 1960s. Land reform was not a major priority for the Cardoso government, but returned to public awareness with MST (Landless Workers Movement) organised occupations of large estates that erupted into violence in 1996, with state police firing on an MST demonstration that blocked a high in the state of Pará (Cohen 2001). Thereafter, the government did manage to resettle 400,000 families on 40 million acres by 1998 (Gordon 2001, p129). The MST itself has continued to settle families, as well as try to use natural, organic fertilisers that are both cheaper and more environmentally friendly (Branford 2001).

There is also a differential in wealth between the south and the northeast, largely based on the rural poverty of many of the these north-eastern provinces. The northeast 'is a semi-arid region comprised of nine states that represents approximately ten percent of the national territory and thirty percent of the population' (Finan 1999, p2). This area had been first settled by the Portuguese, and a strong sugar industry using slave labour was soon introduced. However, from the 17th century as the sugar industry went in relative decline, the centre of European immigration and industrialisation would later swing to the south and southeast. In from the coast, in this northeast area is found the sertãao, largely ran fed land, which was developed as large cattle ranches, cotton production, and subsistence farming based on corn and beans, with some 30% of the population relying on this type of subsistence farming (Finan 1999, p3).

This dry area is subject to drought, and ongoing desertification, and the government has tried with limited success to help marginal farmers affected by drought. Thus the government has built over 275 dams in the region, guaranteeing water to urban populations, but at present there has only been a 'modest amount of irrigation networks extended from these dams (Finan 1999, p5). From 1959 government agencies such as the Superintendency for the Development of the Northeast (SUDENE) had also provided drought relieve and investment funds, but this did not work as expected, for example, in one of the most affected states of Ceará: -

In Ceará, ten percent of the landowners own ninety percent of the land, and the large landholders regularly directed relief funds towards improvements on their fazendas. Corruption was rife, as long dead and non-existent workers were commonly enrolled in the programs and paid their deadman's wages. Through this and other avenues, pubic relief funds were converted into actual incomes for largeholders or an army of labor that became a source of private (no cost) investment for their fazendas. This widedspread exploitation of intense misery has been labeled the "drought industry", considered one of the most lucrative of the Northeast (Finan 1999, p6)

Scientific prediction of periods of drought and the onset of rains was also problematic, and many small farmers preferred to rely on religion, the intercession of saints, and folk methods of weather prediction (Finan 1999, pp7-10). Thus, through the late 1990s, up to 45% of small farmers remained vulnerable in terms of not having basic food security, while up to 83% of these households had no access to formal credit (Finan 1999, p11). When droughts struck in 1998, about 80% of the harvest was lost and 'federal highways in the state were blocked by hungry workers and state warehouses were sacked in April 1998', leading to a much more sustained relief program directing towards over 250,000 families (Finan 1999, pp13-14). As in many developing countries trying to provide security for poor populations, having technical know-how, government funding, will at the top and need at the bottom, is not enough to guarantee an effective relief program. In the broader context, environmental policies that deal with climate change and prediction are 'vulnerable to political manipulation' (Finan 1999, p16).

It is not surprising that in poor rural regions, as in parts of the northeast, there still remains a real break between traditionalist groups who favour a status quo of networked corporatist, protectionist policies, verses modernisers who favour stronger domestic and international competition and an open economy (Gordon 2001, p11). In this context of poverty, the gap between rich and poor, and uneven urban and rural development, that Brazil also suffers from a certain level of 'endemic' violence in urban slims, in rural violence between the landless and land-rich, problems with organised crime, local drug-lords, patterns of thief and kidnapping, and reports of violence conducted at times by the police (Gordon 2001, p31).

Brazil has also suffered from serious environmental deterioration, including extensive inroads on Amazonian and coast rainforests, through to urban air and water pollution. This problem has been of major international concern because of the perception of the Amazonian rainforest as major re-cycler in planetary terms of oxygen and carbon dioxide, as well as a major carbon sink. Likewise, the destruction of the rainforest has a serious impact on biodiversity, on rare pharmaceutically-useful plants, and on the Amerindian tribal peoples who still rely on the forest for their survival. As a nation with strong agricultural exports and ongoing efforts to settle and clear land, there have been great difficulties in following the Forestry Code of 1998, which tried to set limits to the forest cover that can be cleared and move the country towards a more sustainable pattern of development (Ramos 2001).

5. Brazil and its Economic Region

Economic regionalism has come to the fore with Brazil's intense engagement in Mercosur (Mercado Común del Sul, Common Market of the South, active from 1990, called Mercosul in Brazil). Mercosur's current members include Argentina, Brazil, Uruguay, Paraguay, while Chile and Bolivia are associate members (Sissell 2001; Johnson 2001; Falcoff 2000; Atkins 1999, p38). A 'common external tariff was agreed at the end of 1994, with general exceptions until 2001 for Uruguay and Paraguay and the exceptions for all on some sensitive items, including special arrangements for the automotive and sugar industries, until 2006' (Gordon 2001, p215).

However, it is possible to argue that Brazil's support for Mercosur is not just based on notions of progressive trade liberalisation nor just on national economic benefit. There are also political and diplomatic considerations: -

To Brazilian elites, economic liberalization and economic integration are distinct projects. Brazil has pursued the latter with Argentina and other Southern Cone countries for political reasons. Economic integration would help to bury permanently the geopolitical rivalry that has long existed between Brazil and Argentina. Brazilian political leaders believe that economic integration would help them pursue much-needed domestic economic and bureaucratic reforms. Brazil is clearly in control of MERCOSUR as an integration project; larger regional efforts dilute Brazil's ability to control the process to its benefit.

Brazilian firms supported MERCOSUR because they stood to gain from regional integration with Brazil's smaller and economically weaker neighbours, but they are not as supportive of hemispheric attempts (such as the FTAA) that would widen market competition to include firms from countries that could outdo them - firms from Venezuela, Mexico, Peru, and, of course, the United States. This wider competition would inevitably require a major restructuring of Brazilian firms and entire industries as they adjusted to a more competitive environment. A final political reason is that Brazil seeks to blunt the influence of the United States in the region.

Without a doubt, this competition with the United States over the future of hemispheric integration is one of the key political dynamics underlying regional integration. The creation of NAFTA helped to spur the deepening and broadening of MERCOSUR; this, in turn, led to U.S. efforts to broaden NAFTA and seize control of hemispheric integration via a series of bilateral ties. One only has to look at the Brazilian - U.S. tug-of-war over Chile to see this dynamic at work. (Johnson 2001, following Grugel & Hout 1999 pp53-57)

In the case of Chile, it has competitively courted relations with NAFTA and Mercosur. Through its free trade agreement with Mercosur, which does not include full membership, in 1996, it has been able to negotiate better protection for its agricultural products, while in 2000 Chile also negotiated a free trade agreement with the U.S. (Johnson 2001).

Relations within Mercosur have not always been easy. This the Brazilian devaluation of the real after the financial crisis in 1999 was taken without consultation within the organisation or with major trading partners. Thus the devaluation injured trade with Argentina, and increased the competitiveness of Brazilian exports into Argentina (Perry 2000; Sissell 2001). Whether the current decline in the Argentinian currency will balance out this relationship remains to be seen: Argentinian exports will be more competitive but any sustained, serious contraction in Argentina's economy will undermine the importance and bargaining power of Mercosur.

6. Brazil's Independent Foreign Policy

Brazil very early on sought to establish its independence from Portugal, and from both French and Dutch incursions. It also saw itself as a regional power that would have a central role to play in the future of South America. In this context, it at first had a highly cooperative, but invisible pattern of cooperation with the United States, sometimes called the 'unwritten alliance' (Perry 2000; this would change from the 1960s, see below). This peaked with the decision in World War II to move away from any Axis influence, and to send 25,000 troops to fight (the Brazilian Expeditionary Force, FEB) alongside the allies in Italy during 1944-1945. Alongside permission to allied forces to use air bases on Brazilian soil, this made Brazil the most active Latin American nation in World War II. This gave the Brazilian army invaluable experience, as well as access to U.S. equipment and training, and a heightened international role.

Brazil, then, by the late twentieth century already had some of the traditional aspects of a 'great power'. A large population, huge territory and resource base, a large industrial sector, a sizeable and modernised military, its own missile development and nuclear industries, and a very active foreign affairs ministry. It the 1990s it could thus be viewed as a 'middle power' but with the potential for 'world power status' in the future (Eakin 1998, p5).

We can see these ideas in a number of key areas of activity: -

* An Independent foreign policy has long been developed in Brazil by Itamaraty, the Bazilian foreign office, which in general terms 'almost always disapproves of coercive diplomacy and armed intervention within the hemisphere' (Perry 2000). During the 1960s Brazil veered towards a third worldist approach which was strongly critical of the United States, was keen to establish links with the non-allied movement, with developing countries in Africa, as well as some level of contact with communist countries, as well as refusal to support the rejection of Cuba from the Organisation of American States, though this policy changed after 1964 (Gordon 2001, pp202-203). At the time, this was based both on developmentalist strategies, plus dependency theory as developed by Raúl Prebisch and in the UN Economic Commission for Latin America, as well as via the creation of UNCTAD (the UN Conference on Trade and Development in 1964 (Gordon 2001, p88; see further Atkins 1999). Brazil also sought to develop its own nuclear power program (based on cooperation with West Germany in the mid 1970s), including a clandestine weapons program, in opposition to U.S. policy, and soon cancelled its military cooperation agreement with U.S. (Perry 2000; Gordon 2001, p206). Brazil also fiercely rejected U.S. criticism of its human rights record, as expressed in annual State Department reports (Gordon 2001, p207). From the 1990s Brazil has been more accommodating to the U.S., but public opinion still remains rather sensitive to undue U.S. pressure or manipulation, e.g. public concern over reports that the CIA will reopen an office in São Paulo (Gaspari 2001). Likewise, Brazilian economic policy has accepted the reality of open trading and financial systems (the neo-liberal global model), but there remains a 'strong residue of nationalist antiforeign sentiment' (Gordon 2001, p11) which is highly critical of this international economic order. Likewise, Brazil has sought to counter-balance by a conscious strategy of leaning toward Europe (Perry 2000), and to a less extent East Asia as a source of investment, both in terms of its own trade, and also in broader dialogue between Mercosur and the European Union.

* Brazil's desire to see serious reform in the United Nations Security Council, hoping to take its place as a permanent member of a more representative and reformed Security Council. This issue, however, has been complicated by the debate over other 'representative new members' (India? Germany? Japan?) and over whether the veto of the existing great powers should continue. Brazil has been active in UN activities such as peacekeeping, arms control, non-proliferation, and environmental issues (Gordon 2001, p2). In February 2002, Brazil has sought to pursue this agenda through dialogue with Germany, and the creation of a 'Brazil-Germany Partnership: Action Plan' (see Fizpatrick 2002b).

* Brazil's sensitivity to the internationalisation of Amazonia, which the military has now targeted as a major security threat for the country, and concerns that 'internationalisation' of environmental and developmental issues may be a way of undermining Brazil's sovereignty over a crucial resource (see Filho & Zirker 2000).

* Brazil's efforts to be allowed to cheaply produce generic drugs to help its poor, e.g. anti-AIDS drugs. Recent agreements have allowed Brazil to proceed with this at reduced costs.

* Brazil has had strong involvement in international and regional economic organisations. It played an important role in the development of the General Agreement on Tariffs and Trade (GATT) and the WTO (Gordon 2001, p1). Brazil is cautious of the expansion of FTAA from a NAFTA core, and prefers to see the stabilisation and development of Mercosur first. Only then, would there be some kind of grand deal for a hemispheric trading zone, perhaps after 2005 (see Perry 2000).

The success or failure of Brazil is not just crucial for Brazilians. It will have important implications for Latin America as a whole, and for the developing world: -

Success in these terms could provide an example and a pole of attraction for most of Latin America. If the first world as a whole maintains an open system of trade, finance, and technological and cultural interchange, a Brazilian-led South America could make a major contribution to its further evolution. . . . The most likely alternative is a long period of economic decline and political instability, with the instability spilling over from Brazil to the rest of South America. That outcome would be a tragic missed opportunity. (Gordon 2001, p34).

Brazil has thus rightly hoped for a future of greatness (grandeza), a mindset fostered for over two centuries (Gordon 2001, p4). However, this greatness can not be built on a flawed pattern of social and economic development, nor on a highly democratic system which still remains somewhat unstable, and threatens to be held hostage by narrow interest groups and factional politics. Nonetheless, recent reforms in Brazil, and the serious debate that has followed, suggests that Brazilians do have the resources, physical and cultural, to meet these challenges in the medium-term. Their future will be one of the main shaping forces of Latin America during the current century.

7. Bibliography and Resources


One detailed account of Brazilian history will be found in: HUDSON, Rex. A. Brazil: A Country Study, Washington, Library of Congress, 1997 [Internet Access at]

A range of useful news and analysis on Brazil (in English) will be found in the searchable Infobrazil website, located at

An interesting (non-academic) account of popular life and politics can be found in the Web magazine Brazzil (mainly written in English) at

Those of you who can read Portuguese will find Conjuntura Econômica a useful journal with good Brazilian and international coverage of economic issues. Located at

Further Reading

EAKIN, Marshall C. Brazil: The Once and Future Country, N.Y., St. Martin's Griffin, 1998

GORDON, Lincoln Brazil's Second Chance: En Route Toward the First World, Washington, Brookings Institution Press, 2001

JOHNSON, Kenneth L. "Critical Debates: Regionalism Redux? The Prospects for Cooperation in the Americas", Latin American Politics and Society, 43 no. 3, Fall 2001, pp121-138 [Internet Access via Proquest Database, BU Library]

PERRY, William "Has the Future Arrived for Brazil?", Orbis, Summer 2000 [Internet Access via]


ALVES DE ABREU, Alzira "Brazil's Guerrilla Trap", History Today, December 1997 [Internet Access via]

ATKINS, G. Pope Latin America and the Caribbean in the International System, Boulder, Westview Press, 1999

BOWEN, Sally "Brazil Wants What Bolivia Has", Latin Trade, January 1999 [Internet Access via]

BRANFORD, Sue "Seeds of Change", The Ecologist, May 2001 [Internet Access via]

COHEN, Dan Baron "Beyond the Barricade: Social Movements in Brazil", New Internationalist, September 2001 [Internet Access via]

CROOKS, Ed "Markets See Argentina as Localised Disaster", Financial Times, 22 December 2001, p4

DFAT "Brazil: Country Brief", Department of Foreign Affairs and Trade (Australia), Canberra, 2000


FALCOFF, Mark "Regionalist Momentum in the Southern Cone", Orbis, Summer 2000 [Internet Access via]

FERREIRA, Alcides "Monetary Policy: Technical, Not Political", Infobrazil, 22-28 December 2001 [Internet Access via]

FILHO, João R. Martins & ZIRKER, Daniel "Nationalism, National Security and Amazônia: Military Perceptions and Attitudes in Contemporary Brazil", Armed Forces & Society, 27 no. 1, Fall 2000, pp105-129 [Proquest Access via Bond University Library Databases]

FINAN, Timothy "Drought and Demagoguery: A Political Ecology of Climate Variability in Northeast Brazil", Workshop on Public Philosophy, Environment and Social Justice, Carnegie Council on Ethics and International Affairs, 21-22 October 1999

FITZPATRICK, John "Black Power? Not Just Yet . . .", Infobrazil, 5 January 2002 [Internet Access via]

FITZPATRICK, John "U.N. Security Council: Too Lofty A Goal?", Infoobrazil, 16 February 2002b [Internet Access via]

GASPARI, Elio "At the Mercy of the CIA", Brazzil, November 2001 [Internet Access via]

GEIPEL, John "Brazil's African Legacy", History Today, August 1997 [Internet Access via]


GRUGEL, Jean & HOUT, Wil (eds.) Regionalism Across the North-South Divide: State Strategies and Globalisation, N.Y., Routledge, 1999


JOHNSON, Grant "Hello Brazil?", Electronic News, 7 June 1999 [Internet Access via]


LOVEJOY, Paul E. "The African Diaspore: Revisionist Interpretations of Ethnicity, Culture and Religion under Slavery", Studies in the World History of Slavery, Abolition and Emancipation, 2 no. 1, 1997

McGOWAN, Chris & PESSANHA, Ricardo "Musical Cauldron", Brazzil, August 1998 [Internet Access via]

NISHIDA, Mieko "From Ethnicity to Race and Gender: Transformations of Black Lay Soadlities in Salvador, Brazil", Journal of Social History, Winter 1998 [Internet Access via]

PEN, Marcelo "'Discover' Brazil Through Literature Classics", Infobrazil, 25 December 2000


PRATES, Jean-Paul "Brazil's Energy Crisis Complicates Progress in Gas, Power Markets, But Outlook Brightening", Oil and Gas Journal, 15 October 2001 [Internet Access via]

RAMONET, Ignacio "The Promise of Porte Alegre", Le Monde diplomatique, January 2001 [Internet Access at]

RAMOS, Donald "Gossip, Scandal and Popular Culture in Golden Age Brazil", Journal of Social History, Summer 2000 [Internet Access via]

RAMOS, Adriana "Forest Code Debate: The Amazon at Stake", Infobrazil, 27 October 2001 [Internet Access via]

RIBEIRO, Darcy The Brazilian People: The Formation and Meaning of Brazil, trans. G. Rabassa, Miami, University of Florida Press, 2000

SISSELL, Kara "South America - Mercosur Trade: A Delicate Dance", Chemical Week, 163 no. 40, 31 October 2001, pp18-19 [Internet Access to Proquest via BU Library Databases]

WEINOLDT, Kirsten "Mrs. President", Brazzil, December 2001 [Internet Access via]

WHITE, Evelyn C. "Black Pride, Brazilian Style", Essence, February 1998 [Internet Access via]


Copyright R. James Ferguson 2002
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