Brazil is the giant of Latin America, with over half its population and a larger economy than the rest of the continent combined. Even by global standards it is a giant, with one of the ten largest world economies and the fifth-largest land area (Hoover's Handbook, 1993, p. 520). The potentials and problems of the Brazilian economy are in proportion to the country itself. Brazil possesses great potential natural wealth, with a broad range of resources. The Brazilian economy can also lay claim to a thriving high-tech sector, and its arms industry has achieved notable success in export markets.
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 instability, in turn undermining confidence in public institutions. The fundamental economic question for Brazil is whether it can build on its strengths before it is pulled down by its weaknesses.
The following economic statistics for Brazil are for 1993, unless otherwise indicated; all figures are in U.S. dollars:
(Sources: Hoover's Handbook, 1993, p. 521; Financial Times, 1993), Latin America in Graphs, 1992, pp. 11, 75.; Policymaking, 1988, p. 150.)
Gross Domestic P...