Brazilian Economy

At the same time, the Brazilian economy suffers under some exceptional burdens. It has one of the world's heaviest foreign-debt burdens, its debt of $123 billion in 1993 being equal to twenty-eight percent of GNP (Hoover's Handbook, 1993, p. 520). The debt burden, moreover, is arguably only the visible surface of a more fundamental problem: internal economic iniquity, and the condition of economic dependency that goes hand in hand with it. Latin American has perhaps the world's sharpest divisions of wealth and poverty, and Brazil has the sharpest divisions in Latin America, with half the population commanding only two percent of GDP.

On an economic level this inequality leads to stagnation, since an enormous proportion of Brazilians are essentially shut out of effective participation in the economy. On a social and political level it leads to latent instabilit

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ates, and by the heavy foreign debt burden. As recently as 1990, consumer inflation ran at nearly four thousand percent, though it was reduced to 441 percent by 1991 (Hoover's Handbook, 1993, p. 521). With respect to foreign indebtedness, the "Third World debt" crisis that gained such international attention in the early 1980s was, in fact, in substantial measure a Brazilian debt crisis. Very little useful investment was funded with the borrowed money, and service upon the debt constitutes a severe drain upon Brazil's otherwise-excellent export performance. Much of the foreign exchange obtained by the Brazilian trade surplus goes directly into servicing the debt, rather than being available to fund expansion of the capacity of the Brazilian economy. Moreover, as we will argue below, the Brazilian debt burden is at least indirectly linked to the other grave area of weakness that appears in the statistics presented above: the severe inequality of income, an inequality which relegates a large fraction of the Brazilian population to virtual nonparticipation in the development of the Brazilian economy. Struggling with Inequity Let us, as a conceptual exercise, divide Brazil into two economies, an economy of the prosperous emb
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Some common words found in the essay are:
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Approximate Word count = 2224
Approximate Pages = 9 (250 words per page)

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