Brazil, the largest country in South America, is the kingdom of football, the country of passionate Samba, and is also regarded as one of the countries with the best development prospects in the world. It was once known as the "BRICS countries" together with China, Russia, India and South Africa.
However, when we ruthlessly throw away these fig leafs made of "very big names" one by one, put this "naked" Brazil on a tray and carefully look at it, we will find that when the layer of gold powder on the surface of the "gold brick" is scraped off, its true identity of the "brick" can no longer be hidden.
The new crown epidemic in 2020 rages the world, making Brazil, a not-wealthy "family", worse. Some time ago, Bolsonaro, then President of Brazil, had no choice but to announce Brazil's bankruptcy in public. According to the International Monetary Fund's forecast, Brazil's GDP growth rate will reach a shocking -9.1% in 2020, successfully achieving negative national economic growth.
Looking back at the last century, Brazil also experienced an economic miracle. Although the political situation is unstable, its domestic economic development is still moving forward steadily, and it has even experienced a period of rapid domestic economic development. But when time comes to the 21st century, Brazil has suffered heavy losses in recent years, so some Brazilians pessimistically believe that Brazil will usher in the biggest recession in Brazil's history.
So, how did this country with the largest size in South America ruin a good hand?
Brazilian flag
Brazil, the development path from "colonial" to "republic"
Brazil's birth originated from the old colonizer Portugal in the Age of Discovery. The name of Brazil originated from the colonists' plunder of Brazilian mahogany, and the word "Brasil".
As colonists, the Portuguese never plundered here. They opened plantations, rushed gold, and mined here, but they never built it. At that time, the colonists did not intend to leave any traces of civilization in Brazil, except for transporting the plundered materials back to European ports and necessary roads. Under the rule of the colonists, the Brazilian Indians could only work for the colonists as cheap labor.
What brought changes to this environment was a Frenchman - Napoleon . When almost the entire Europe fell under the mighty military power of Napoleon, Portugal was not spared. After King Joao VI of Portugal "was called moving the capital, but actually exiled" to Brazil, he was very dissatisfied with the current situation in Brazil. Soon, various libraries, barracks, banks, and factories rose to the ground, and Brazil's culture and economy began its first round of development.
colonist from the American continent
After that, Portugal was restored in 1822 and was left by the king to take care of the colony. However, in 1822, he openly proclaimed himself emperor and announced his separation from Portugal. During the period when Pedro I was dictatorial in Brazil, the first industrial revolution started from theory to practice and began to spread widely on the European continent from theory to practice. Although Brazil did not enjoy the dividends of the industrial revolution itself, it also made a fortune in the form of a "vassal of the Industrial Revolution" because of the large-scale export of rubber and other industrial raw materials.
Wait until the dictator of the Brazilian Empire was overthrown by a coup, and Brazil completed the transformation from "Empire" to "United States". Under the slogan of "order and progress", Brazil established the presidential system for the first time, and on this basis further promoted Brazil's modernization. At this time, Brazil's main operating income came from the cultivation of cash crops, especially coffee.
Data shows that during that period, Brazil's coffee production led the world with an absolute advantage, once reaching three-quarters of the world's total coffee production. Coffee cultivation undoubtedly became Brazil's pillar industry.
Brazilian coffee beans
But people with a little economic knowledge should know that a single economy is a very one-sided economic model, and any storm may cause this economic model to capsize - Yes, Brazil has capsized .
The Great Depression of the 1930s swept the world without mercy. Its devastating economic blow made the whole world miserable, and Brazil could not escape it. After the Great Depression destroyed Brazil's coffee economy, the whole of Brazil was in chaos.
Brazil, and its economic miracle
After the Great Depression, Vagas was elected president by soldiers. During his reign, he was committed to improving the national economy and people's livelihood and allowing Brazil to move forward towards prosperity again. But when he was driven out of power in 1945, the Brazilian government fell into chaos again. In 1964, a military coup turned Brazil, which was in chaos, into a military-government-led country, but it was during this period that Brazil began its dazzling "Brazil economic miracle".
Before the late 1960s, due to Brazil's external closure and insufficient domestic funds, its original domestic industry was inefficient and many emerging industries could not develop. In the late 1960s, the Brazilian military government proposed the "import substitution strategy", intending to establish a more efficient national industry by introducing foreign capital, so as to improve Brazil's overall economic structure and achieve modernization.
Brazil, which once created a world economic miracle, has a great land and great potential. Capitalists have long been salivating about Brazil. From the late 1960s to the mid-1970s, a large number of external capital poured into Brazil. Data shows that during this period, foreign investment in Brazil increased by 25% or even more each year. The large-scale influx of foreign capital has allowed Brazil's economy to develop significantly in this short decade. When time came to 1979, Brazil's GDP reached more than 200 billion US dollars, leading the entire South America.
After the economic miracle, Brazil, which was in confusion, was
Since Brazil once led South America, why has it fallen to the point of declaring its country "bankruptcy" to this day?
Let me say something off topic here. In fact, to this day, Brazil is still the country with the highest GDP in South America. After all, if the size and resources are placed there, even if it is desperate, its starting point will be much higher than that of other small countries in Latin America. However, the Brazilian presidents have personally declared the country bankruptcy. Could it be that there is still a falsehood? In fact, the case of a country's bankruptcy is simply a situation where its sovereign debt is greater than its GDP.
After Brazil's economic miracle, due to sudden turmoil in the international market, Brazil has borrowed a lot of debts in order to stabilize and maintain the rapid growth of its own GDP, which eventually led to a debt crisis in its own country and caused serious inflation. Faced with the anger of the common people, the military government had to choose to "return the power to the people."
When the elected government comes to power, choosing economic development or releasing social conflicts has become a huge problem for Brazil's development since then.
Brazilian President Bolsonaro declared Brazil bankrupt
How did Brazil play with it?
When the new elected government came to power, facing high debts and a high inflation rate, they decided to reform Brazil's economic structure.
Whether it is the "New Brazil Plan" or the "Real Plan", they undoubtedly provide assistance to Brazil's national stability, but in a series of economic reforms, the Brazilian government has also de-industrialized, significantly improving national welfare, and moving the national development center to export trade of bulk goods.
First, Brazil's deindustrialization.
Before discussing this issue, we need to be clear about one premise, that is, industrialization is the core of modernization, and when Brazil reforms its policy, blindly following the United States and some European countries and choosing to de-industrialize is definitely a wrong choice.
Before de-industrialization, Brazil was definitely a manufacturing powerhouse. Whether it was heavy industries such as aircraft and ships, or light industries such as shirts and electrical appliances, Brazil definitely had a place in the international community. However, when Brazil chose to de-industrialize and demolish the production line as soon as possible, the remaining industries only existed in the mining of resources. Brazil suddenly lost the ability to manufacture most of the goods, and a large number of people were forced to transfer from manufacturing to service industries.A 2011 statistics show that Brazil's service industry accounted for from 46% in 1981 to 62.4% in 2011, and this data is definitely higher now.
But the problem is that the tertiary industry is a consumer industry, which is an additional industry to meet the high-quality life of the people. Moreover, when the country loses the high-end manufacturing industry, the prosperity of its service industry can only be maintained at a low level.
So Brazil's sorrow is that it has not completed industrial upgrading, and it has "deindustrialized" with Western countries.
high-end manufacturing
Secondly, the policy of the Brazilian government to move its development center to commodity trade.
Brazil has rich natural resources, and its minerals are not only of a wide variety, but also of extremely high quality and huge reserves. As of 2019, various types of resources have been proven in Brazil, with iron ore reserves reaching 65 billion tons, uranium ore reserves reaching 240,000 tons, aluminum alum reserves reaching 4.4 billion tons, and manganese ore reserves reaching 200 million tons, all of which are at the forefront of the world, and the reserves of other minerals such as aluminum, tin, chromium, nickel, etc. are also very large. In addition, because of guarding the Amazon Forest, its feng shui treasure land, its timber reserves are also eye-catching, and the bulk goods export trade mentioned above is undoubtedly the export of these resources.
But, like that famous saying - the only lesson that humans learn from history is that humans will not learn anything from history. Perhaps it was because the "coffee economy" collapsed a little far apart. The Brazilian government had forgotten what had happened to it, and it embarked on this path again without looking back.
So, it capsized again.
Brazil's economy relies too much on resources and primary product exports, resulting in the Brazilian ship involuntarily following up and down whenever the international market fluctuates in Brazil's bulk cargo export market. The plummeting resource prices in recent years has quickly affected Brazil. Under this economic structure, Brazil can only swallow the bitter fruits it planted by itself.
Iron ore being mined
In addition, Brazil's "vote politics" is also one of the cancers that drag down Brazil's development.
The so-called vote politics is simply the political behavior of presidential candidates in order to obtain higher turnout, in order to get a higher turnout, to attract voters with voters to vote for their political behavior. Brazil's vote politics is so simple, that is, the welfare policy.
2003 Lula was in power. In order to ease Brazil's increasingly severe gap between the rich and the poor, Lula increased the income of Brazil's middle and lower classes through a series of practical means, allowing Brazil's 52 million extremely poor people to get rid of absolute poverty in just a few years, and many even entered the middle class. For this reason, the Brazilian people happily called him "son of Brazil."
So what methods did Lula use to reform so effectively? In short, it is to improve social welfare. During Lula's rule, the Brazilian government's expenditure on social welfare once reached more than 20% of Brazil's GDP. He established the most generous pension system in the world, raised the minimum wage for workers, and even announced that he would achieve free medical care and education.
Brazilian slums
After that, whenever Brazil conducts an election, any presidential candidate who intends to reduce investment in social welfare will be despised by the people without exception. To this end, every presidential candidate has to say that he will maintain his previous welfare policy and even further elevate it.
So, the Brazilian president became a "boy with money". What he had to do after taking office was to give money, give money, and give money. As for developing industries and developing the economy? Can. You said you would spend my money to develop industry and economy? no!
is like this. Under the interaction of various conditions, Brazil can only go back on the road to bankruptcy.
