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Brazil

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Map of Brazil Last reviewed: 7 January 2009

Country information

Map of Brazil

BRAZIL TODAY

Country Facts

Full country name: Federative Republic of Brazil
Area: 8,547,403 sq km
Population: 189.6 million (2008 estimate)
Capital City: Brasilia
Language: Portuguese
Religion: Roman Catholic (73.6%), Pentecostal (15.4%), Animist (1.4%)
Currency: Real
Major political parties: Following the elections in 2002, the Worker's Party (PT) became the largest party in Congress. It formed a coalition with some 10 other parties, giving it loose control of an overall majority in both chambers.  However, in the 2006 elections the PT fell short of a majority in both the Chamber of Deputies and the Senate.  The PT is a broad left party with close links to the trade union movement. The main opposition parties are the centre-left Social Democratic Party (PSDB), and the centre-right Democrats Party (DEM), formerly known as the Liberal Front Party (PFL).
Government: Brazil is a Federal Republic consisting of 26 States and the Federal District.  States have considerable autonomy, being responsible for such issues as security and education.  The President is both Head of State and Leader of the Government.  Elections for President and Congress take place every 4 years.
Legislature: The 1988 Constitution provides for an elective bicameral Congress consisting of a Federal Senate (81 seats) and a Chamber of Deputies (513 seats).
Head of State: President Luiz Inacio Lula da Silva
Foreign Minister: Ambassador Celso Amorim
Membership of international groupings/organisations: United Nations, Organisation of American States, Mercosul, World Trade Organisation, G77, ALADI (Latin American Integration Association), Rio Group, ECLAC (UN Economic Commission for Latin America & the Caribbean), Union of South American Nations.

DID YOU KNOW?

  1. Brazil is larger than the continental US and Australia. It is the fifth largest country in the world.
  2. With a population of 190 million, Brazil is also the fifth most populous country and fourth largest democracy. Sao Paulo is the second most populous city in the world, with almost 20 million people. Four million African slaves were transported to Brazil, 7 times the number transported to the US. The majority of the population is black, or partly so. Only Nigeria has a larger black population.
  3. Brazil is also one of the most unequal societies.  5% of the population own 85% of the wealth.
  4. Brazil is the world's largest exporter of iron ore and soya; it will soon be the largest exporter of frozen meat. Brazilian industry produces more cars than Mexico, more steel than Italy, the same amount as India.
  5. Brazil is technically self-sufficient in oil and If recently discovered reserves are proven, is likely to become a major oil exporter in the future.  
  6. Brazil is the country outside the G8 with the best science base (as measured by the frequency its scientific papers are quoted).
  7. Brazil has the world's largest reserves of tropical forest, freshwater and of bio-diversity.  Enough water flows out of the Amazon each day to keep New York City going for 10 years.

Environment and Climate Change

Brazil is a world leader in the production of biofuels, bioethanol in particular.  It is however the fourth largest global emitter of greenhouse gases.

The country has one of the highest levels of bio-diversity in the world. This is of economic importance in terms of agriculture, as a source of minerals and natural resources, and of potential genetic and pharmaceutical products.  It is also of cultural and spiritual significance to Brazil's people who include over 200 indigenous groups. Brazil's key biomes are: Amazon rainforest, wetlands (Pantanal), semi-arid area (caatinga), savannah lands (cerrado), Atlantic forest, and marine and coastal areas. It is home to 15-20% of the total number of world species described to date.  The Amazon represents over half of the world's remaining rainforest (8.5 million sq km); 60% of this is in Brazil. Brazil has 3.5 million sq km of coastal and marine waters.

The environment is a complex political issue in Brazil.  This is partly due to its commercial significance, but also to conflicting pressures resulting from poverty and social inequality and developmental needs.  Brazil also suffers from corruption, red tape and a shortage of resources for policy implementation.  Incidences of environmental degradation remain high.  18% of the Brazilian Amazon has been deforested since 1970 (an area equivalent to France and Portugal together).  The Brazilian Government has however announced a fall in the rate of deforestation: a 31% fall in the period August 2004 to August 2005 and an estimated 30% fall for the same 2005 to 2006 period, and has increased the number of protected and indigenous reserves (around 35% of Amazonia), and established a national forestry service.

The Brazilian Government takes a conservationist position on many issues.  The country hosted the UN Conference on Environment and Development in 1992 (UNCED - the Rio Earth Summit) and played a key role in the World Summit on Sustainable Development in South Africa (referred to as Rio plus 10 by Brazilians), especially in the area of renewable energy.

Brazil plays a crucial and active role in international negotiations on climate change, and was behind the original concept of a Clean Development Mechanism (CDM).  It is also active in building partnerships on biofuels.

ECONOMY

Basic Economic Facts

GDP: R$2322bn(2006) - approx. US$1067 bn
GDP per head: US$ 5.71 (2006)
Annual Growth: 5.4% (2007) 3.7%  (2006); 2.9% (2005); 5.7% (2004)
Inflation: 4.46% (2007)
Major Industries: Agriculture (soya meat, sugar, fruit, vegetables), iron ore and minerals, iron and steel, oil and derivatives, food processing, wood products, footwear and textiles, automotive, aerospace, petrochemicals, financial services, electronics
Major trading partners: United States, China, Argentina, Germany, Japan, Italy, France, and the United Kingdom.

Brazil has the tenth-largest economy in the world.  It is a diversified middle income economy, but with wide variations in development levels.  Most large industry is agglomerated in the South and Southeast. The Northeast is the poorest region of Brazil, but it is beginning to attract new investment.  Brazil has a history of economic boom and bust, where high inflation and foreign debt have hampered its development. Economic reforms in the 1990s, however, helped to bring stability to the country's finances.  These reforms included the launch of a new currency (the Real) to tackle inflation, an extensive programme of privatisation and a focus on fiscal discipline.

In the run up to the 2002 elections Brazil suffered a serious confidence shock as investors waited to see whether President Lula delivered on his commitment to a responsible economic policy.  This led to sharp spikes in both Brazil's risk rating and the exchange rate (with the Real peaking at R$4/US$).  Since then, however, market sentiment has improved as President Lula and his team have carried through sound macroeconomic policies built on the three pillars of inflation targeting, a floating exchange rate and fiscal austerity. As a result, the 2006 elections brought about very little market reaction.

Annual headline inflation in 2007 was 4.46%, just below the 4.5% centre point of Brazil’s inflation target. However, rising food and energy prices, combined with rising domestic demand, have pushed up inflation in 2008 to well over 6%. But a high base rate (currently 13.75%), falling commodity prices and a reduction in the rate of domestic demand growth, appears to have brought this under control. Year end inflation is expected to be within the target band.

Brazil's economy grew 5.4% in 2007 compared to 3.7% in 2006. Once again this was built on the back of strong balance of trade figures. (Brazil's main export markets are the EU, US, Argentina and, increasingly, China.  Commodities in particular have been strong performers.) And in mid-2008, as a result of Brazil’s solid macroeconomic performance, two of the three main ratings agencies uprated Brazil to investment grade.

Brazil has been hit less hard by the global economic crisis than many. It has a tightly regulated, domestically focussed, cash-rich economy, and is continuing to stick resolutely to orthodox macro-economic policies. Brazil’s banks are profitable and well capitalised. Brazil has a problem with liquidity, not solvency and the Government has taken a number of effective steps to minimise the impact (including significant reductions in reserve requirements). As a result, GDP growth for 2008 is expected to exceed 5% (growth in 2009 is forecast at around 3%).

Brazil has relatively little foreign debt, In December 2005 Brazil it re-paid its IMF debt (US$15.5bn) - two years ahead of schedule, saving US$900 million in interest payments.  It has also fully re-paid its Paris Club obligations to the UK, and retired all of its Brady Bonds, again ahead of schedule.

The Brazilian Government remains committed to tackling its high public sector net debt/GDP ratio (of around 40 %) and has consistently surpassed its annual primary surplus target (which currently stands at 3.8% of GDP). However, public spending remains high and fundamental structural reform s, including of the taxation and social security systems, are widely acknowledged as impediments to growth.  Investment has historically been low but the Government’s Accelerated Growth Plan (PAC), launched in January 2007, aims to rectify this.

Mercosul and UNASUL

Brazil is a founder member of Mercosul, (the Southern Cone Common Market – known as Mercosur to its Spanish speaking members) along with Argentina, Paraguay and Uruguay.  Venezuela became a full member in July 2006 but its accession has yet to be approved by the Brazilian Congress.  Bolivia, Chile, Peru, Ecuador and Colombia are currently Associate Members although discussions are underway regarding Bolivia's request for full membership.  Mercosul is the world's fourth-biggest integrated market and represents 75% of South America’s GDP. Mercosul has been successful in promoting increased trade among its members as well as with the outside world.  In recent years, however, regional economic instability has slowed the integration process.  Negotiations over an EU/Mercosul agreement have yet to be concluded.  Brazil is also a key member (and instigator) of  USASUL , the Union of South American Nations which was formally created in May 2008 . The grouping, originally called the Community of South American Nations (CASA), was proposed by President Lula in 2004 with the aim of promoting regional integration.  In effect, UNASUL combines the countries (Mercosul) with those from the Community of Andean Nations (CAN), along with Chile, Guyana and Suriname into a wider regional integration project.

Mercosul Secretariat
European Commission - EU's relations with Mercosur

HISTORY

There are various theories explaining the origins of Brazil's indigenous population. One of the most accepted westernised theories is that they migrated from Asia via the Bering Strait 15-25,000 years before the arrival of the Europeans.  Recently, some Brazilian archaeologists have proposed that there was human settlement in Brazil 20,000 years earlier than was initially thought.  Subsequent settlement of what is now Brazilian territory has been understood in terms of linguistic and cultural assemblages, with a proposed Amazonian group in the north of Brazil (Amazon Basin) and a second group in the south and coastal areas commonly identified as the Tupi group.

1500 The Portuguese explorer Pedro Alvares Cabral lands in Brazil.
1572 The King of Portugal creates the Viceroyalty of Brazil in Salvador (Bahia).
1763 Rio de Janeiro proclaimed Brazil's sole Capital.
1789 First independence movement (Minas Gerais)
1807 Napoleon invades Portugal.  The Portuguese Regent (later King Dom Joao VI) takes refuge in Brazil.
1821 King Joao VI returns to Portugal leaving his son Pedro as Regent of Brazil.
1822 Pedro declares the independence of Brazil and is proclaimed Emperor.
1831 Dom Pedro I returns to Portugal, leaving Brazil to be governed by a regency.
1840 Pedro II crowned Emperor at the age of 14.
1888 Abolition of slavery.
1889 Brazil is proclaimed a Republic.
1937-45 President Getúlio Vargas' authoritarian regime launches the process of industrialisation.
1944-45 Brazilian troops fight alongside Allies in World War II.
1960 Brasilia becomes the new capital.
1964 Military coup topples democratic regime.
1985 Democracy is restored.  Jose Sarney becomes President.
1988 New constitution proclaimed.
1994 Fernando Henrique Cardoso (PSDB) elected President, and re-elected in 1998.
2002 Luiz Inacio Lula da Silva elected President.
2006 Luis Inacio Lula da Silva re-elected as President.

INTERNATIONAL RELATIONS

Relations with the International Community

Brazil is a key player on the world stage.  It is at the forefront of efforts to deepen Latin American integration, through its membership of Mercosul, the Rio Group, ALADI and other regional groupings.  It was a driving force behind the founding of the South American Community of Nations in December 2004 (which was later renamed the Union of South American Nationa) .  Brazil founded, and plays a co-ordinating role, in the G20 group of nations in WTO negotiations.  It is an active and influential member of the United Nations.  Brazil leads the UN peacekeeping force in Haiti (MINUSTAH) and participates in the multinational presence in Timor Leste.  It is the largest member of the community of Portuguese-speaking nations (CPLP).

Under President Lula, Brazil has been particularly active in its engagement with other emerging powers, particularly India, South Africa, China and Russia.  Brazil, India and South Africa have established a more formal grouping, called the G3 or IBSA, and co-ordinate activity across various areas.  Through its role as a leader within Latin America, Brazil has encouraged closer co-operation between the region and the Middle East.  Africa is also a stated priority of President Lula's administration, reflected by high-level visits and an expansion of Brazil's diplomatic representation in Africa.

Brazil supports reform of the United Nations, both the Security Council and more widely.  Brazil has put itself forward as a candidate for a permanent seat in an enlarged Security Council and has the stated support of a significant number of countries, including the UK.  Alongside India, Japan and Germany, Brazil has formed a group to co-ordinate and lobby in support of their respective candidatures.

Relations with the UK

Brazil is a rapidly emerging global player of great importance to British interests - economic, political and commercial.  A prosperous, export-orientated Brazil would be one of the biggest global suppliers of agricultural products and raw materials, the foremost regional producer of manufactures and a major market for profitable British trade and investment. Brazil is also a key country for climate change, sustainable development and biodiversity.

The UK and Brazil have a broad, deep and sustained relationship.  The UK was an early supporter of Brazil's independence in the nineteenth century, helped found the Brazilian navy, built railways and encouraged Brazil to abolish slavery. There are still small long-term British communities and significant British investments. In the 21st century Brazil is a key partner of the UK on a wide range of global issues from combating drugs trafficking to promoting an open and expanding global economy, and sustainable development underpinned by democracy, good governance and human rights.

Cultural Relations with the UK

The British Council has been helping to bring together the people and organisations of Brazil and the UK since 1945. It celebrated 60 years in Brazil in 2005.  It is the United Kingdom's international and educational relations organisation.

The British Council works to develop stronger ties and greater mutual understanding between the UK and Brazil as well as seeking to improve the perceptions of the UK throughout Brazil.  There are presently some 70 staff working at British Council offices in Brasilia, Rio de Janeiro, Sao Paulo, Recife and Curitiba. Its work includes promoting creativity in the arts and sciences, all facets of education and English language learning support, and aspects of governance and society such as judicial reform and development of regulatory frameworks of government.

British Council, Brazil

Recent Inward Visits

President Lula, accompanied by a delegation of Brazilian ministers, visited the UK on a State Visit from 7-9 March 2006. This was the third Brazilian State Visit to the UK and the second in less than 10 years. The President was greeted by the Queen and met with the Prime Minister for high level talks. During the visit, Brazil and the UK signed several Memorandums of Understanding in areas such as education, healthcare, and creative industries. The visit culminated with two Joint Statements issued by the President and the Prime Minister on trade and on sustainable development and climate change.

Recent Brazilian visitors to the UK also include Foreign Minister Celso Amorim, Justice Minister Marcio Thomas Bastos, Antônio Palocci (then Finance Minister), Mines and Energy Minister Dilma Rousseff (now Head of the Civilian Household), Minas Gerais Governor Aecio Neves and and  Rio de Janeiro Governor Sergio Cabral among others.

Recent Outward Visits

2008 - In March 2008 Prof. John Beddington visited Brazil, his first overseas visit as Chief Scientific Adviser.  In September 2008 John Hutton, Minister for Business, Enterprise and Regulatory Reform also visited for the third JETCO ministerial meeting.  Tessa Jowell, Minister for the Olympics, visited Recife and Sao Paulo in November 2008 to promote UK/Brazil sporting links, and Lord Hunt, DEFRA/DECC Minister of State, visited Sao Paulo in November 2008 to attend an International Biofuels conference hosted by the Brazilian Government.  Alan Campbell, Home Office Minister for Crime Reduction, participated in the Third World Congress on the Exploitation of Children in Rio de Janeiro on 26 and 27 November.  On 28 November, he made a brief visit to Brasilia, meeting the Foreign Ministry, Ministry of Justice, Admiral Moura Neto, the Commander of the Navy, and Roberto Troncon at the Federal Police.  FCO Minister for South America Gillian Merron visited Brazil in December 2008.

2007 - In March 2007, Sir David King visited Brazil to formally launch the UK-Brazil Year of Science and Innovation, an initiative agreed during President Lula’s State Visit to London one year earlier, and also to discuss climate change.  In April the Duke of York came to Brazil at the personal invitation of President Lula.  He spent six working days in Brazil as the UK’s Special Representative for International Trade and Investment.  The Princess Royal made a three-day visit in July of the same year.  The Lord Mayor visited Brazil in August 2007 to raise the profile of the City and the UK generally and to give further impulse to bilateral co-operation.   In September 2007 FCO Minister Kim Howells visited Brazil to conduct High Level Political Talks.  This was the first bilateral talks to be made by a Minister of Gordon Brown’s government.

2006 -  Sir Nicholas Stern, Head of the Government Economic Service, visited Brazil in April 2006 to help inform his Review on the economics of climate change (the finalised Review was launched in October).  Stern paid a follow-up visit in November 2008 to promote transition to a low-carbon, high-growth economic model.  In July 2006, Margaret Beckett made her first bilateral visit as Foreign Secretary to Brazil.  In September 2006 the Minister for Trade and Industry, Alistair Darling also visited to launch the UK-Brazil Joint Economic and Trade Committee (JETCO).  Meanwhile, in November 2006, the Leader of the House of Lords, Baroness Amos, visited Brazil to keep up the momentum of the UK’s bilateral engagement with particular focus on poverty, race and gender issues.

 

GEOGRAPHY

Brazil is the fifth largest country in the world.  It is framed by 2 of the world's largest river systems: the Amazon in the North, and the Paraná river in the South.  The Amazon basin covers some 60% of Brazil's surface, and holds 20% of the world's fresh water supply.  It has the world's largest rain forest but also includes savannah and wetlands.  Like the Amazon, the Paraná flows through several neighbouring countries.  It drains the world's largest swampland, the Pantanal in West-Central Brazil.  The Brazilian Highlands form the rest of the country, except for a coastal strip some 9,000km long. Brazil contains a number of climatic zones from the Amazon region where the temperature averages 27ºC, to the dry Northeast where temperatures can exceed 40ºC, to the south near Uruguay where average temperatures are 17-19ºC.

TRADE AND INVESTMENT

Trade and Investment with the UK

Brazil is the UK's most important trading partner in Latin America.  Our market share is around 2%, with bilateral trade worth over £3bn in 2007 (UK exports of £1.08bn and imports of £2.06bn).

Currently, around 90% of UK exports to Brazil are manufactured goods.  Top exports include organic chemicals, pharmaceutical products, power generation machinery and equipment, professional scientific instruments and apparatus, electrical machinery and road vehicles.  Brazil's main exports to the UK are meat and meat preparations, foodstuffs for animals, pulp and paper, footwear, cork and wood manufactures tobacco and tobacco products, power generation machinery and vegetables and fruit.

The UK is also a leading investor in Brazil. One of the major investors, HSBC expanded their operations by buying out Lloyds TSB's Brazil operation in 2004.  The acquisition includes the wholesale bank, a foreign trade line of credit portfolio for Brazilian companies and Losango, Lloyd’s domestic consumer credit portfolio. Rexam, the packaging company, bought a local canning company for £272m. Cadbury acquired a Brazilian sugar confectionery manufacturing capacity with its purchase of Adams from Pfizer.  It is now looking to expand into chocolate production with its purchase of local company, Garoto.

The last few years have seen a number of substantial investments, including a British Gas/Shell consortium purchase of a majority share in the Sao Paulo gas utility, Comgas; the award to National Grid of a major telecommunications licence; Pilkington’s plate glass factory near Sao Paulo and its new plant near Curitiba; a GlaxoSmithKline plant in Rio; and ICI’s acquisition of Bunge Paints, making it Latin America’s largest paint manufacturer.

Additionally, ICI have announced further investment plans of up to $50m.  Other companies, such as JCB and BT, are steadily making inroads in this market.  Away from the industrial sector, designers Priestman Goode and WGSN, the leading online trend analysis and news service for the fashion and style industries, are proving to be major successes.

UK Trade & Investment Country Profile: Brazil
British Consulate General, Sao Paulo - Trade & Investment information

UK Development Assistance

The British Government is engaged in a wide range of projects with Brazil. The majority of Embassy-run programmes, amounting to well over  3 million per annum, take place under the FCO's Strategic Programme Fund.  Current programmes include co-operation with Brazil on sustainable development, human rights, economic governance, and climate change and energy.  The Department for International Development (DFID) is fully engaged in Brazil, which is a key country for their wider development agenda in the region.  DFID works with and through regional partners, with a special focus on the World Bank and the Inter-American Development Bank. Their work covers social inclusion, inequality and trade and poverty issues.  More detailed information is available at www.dfid.gov.uk.

POLITICS

Brazilian politics since the end of the military regime in 1985 have been characterised by a multiplicity of political parties.  Many do not have a strong ideological foundation or detailed policy platforms, and are built around shifting small groups of high-profile politicians.  In recent years, 4 main parties have come to dominate the political landscape: the PSDB (Brazilian Social –Democratic Party); the PT (Worker’s Party); the PMDB (Brazilian Democratic Movement Party); and the DEM (Democrats).

The PSDB's candidate, Fernando Henrique Cardoso, won the presidential elections in 1994, and was re-elected in 1998.  The centre-left PSDB (Brazilian Social-Democratic Party) remains important across the country and governs both the state and city of Sao Paulo – the most populous and wealthy state and city in the country. Their Presidential candidate, Geraldo Alckmin (a former Governor of Sao Paulo), was the main rival to incumbent President Lula in the 2006 elections.

President Lula, one of the founders and the most charismatic leader of the PT, won the 2002 Presidential elections convincingly with 61% of the vote.  This was Lula's fourth attempt at the Presidency. His election represented a vote for change – particularly in taking forward Brazil’s social agenda. Lula put pro-poor policies at the top of his agenda, whist also continuing his predecessor’s commitment to IMF targets and fiscal discipline.

The 2006 Presidential elections were taken to a second round.  However, Lula beat Geraldo Alckmin convincingly with over 60% of the vote. The 'Zero Hunger' campaign (with the aim of providing basic food supplies to millions of families) was Lula's flagship social policy at the start of his first term in office.  Later, Lula decided to unify all major social programmes under one flag –Bolsa Família (Family Grant) – with the objective of reaching a wider population and avoiding waste of resources in this area.  After his first ministerial reshuffle in early 2003, the new Ministry for Social Development was created to oversee all social programmes.

Serious corruption accusations involving Lula’s closest associates and allies began to emerge in 2005, leading to a series of Congressional investigations.  Despite attempts to minimise and contain the crisis, the scandal saw the resignation of several leading figures in the PT, and investigation continues in Congress.  It dominated press coverage in the build up to October 2006’s Presidential, Congressional and State Governor elections.  The most visible consequence of this was the fact that the Presidential elections were taken to a second round.

HUMAN RIGHTS

The Brazilian Government is committed to protecting human rights. Brazil's first National Plan for Human Rights was unveiled in 1996 and a National Secretariat for Human Rights was created in 1997. President Lula has also appointed Special Secretaries for Women's Rights and Promotion of Racial Equality. Principle human rights concerns in Brazil include police violence and impunity, prison conditions, access to legal advice, violence and discrimination against both indigenous communities and landless people, human trafficking, major deficiencies in the realisation of children's rights, torture, working conditions and corruption with relative impunity for those involved.

The government has introduced a number of programmes, for example, Bolsa Familia, the Zero Hunger programme and the Programme for the Eradication of Slave Labour. Human rights is a key aspect of the UK's dialogue with the Brazilian Government. FCO funding is being used to support projects on combating torture and reporting on the UN Child Rights Convention.

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