Trade balance, Exchange rate policy, Growth rate of economy in Brazil Essay

Trade balance, Exchange rate policy, Growth rate of economy in Brazil - Essay Example For the production of the commodities Brazil mainly used Slave labors for the production of the commodities. Industrialization in Brazil took place in the year 1930 and onwards. The first steel plant was built in the country in 1940.During the 1950s to 1970s other important sectors of the economy such as fertilizers, automobile, petrochemical and steel expanded. It was in this time that the growth rate of Brazil was at the record high levels in the world. During 1970s the countries in Latin America along with Brazil was a favorite destination for absorbing the excess liquidity of banks in the United States, Japan etc. As investments started flowing in there was a rapid development of the infrastructure facilities. During this period the economy of Brazil grew at a rate of about 8.4% per annum. In was during this period that per capita income of the Brazilians raised 4 fold. Trade policies in Brazil have undergone several changes in the past decade. The trade policies during the 1930s and 1940s, was characterized by great depression. During this time Brazil followed protectionist policies which isolated the country from rest of the world. The country experienced trade growth during 1960s and 1970s and this led to the opening of the doors related to agrarian and tax reforms. Several banks participated in this period to the reforms. As cheap credit was available government and private sector participated in heavy borrowing and this led to the fact that economic growth was high and unstable. Then in the 1980s as the interest rates rose sharply the accumulated debt proved to be unstable for the country and this resulted in the country going into debt crisis. This resulted in the fact that the country had to suffer almost 15 years of low growth and hyper inflation. In the 19990s there was a beginning of privatization and liberalization. As Brazil had followed protectionist policies for about half a century, this resulted in the fact that the country’s share in