The Miraculous Economic Transformation of Brazil

Brazilians always spoke fondly of their country as theThe world's largest agricultural firms all have operations
Land of the Future. They felt God endowed them within Brazil.
endless resources that one day would make them aBrazil Becomes An Ethanol Superpower
prosperous and powerful nation.In the 70’s, Brazil introduced the Alcohol Program
Brazil is a giant of South America. Its population of 190The 100-percent-ethanol-powered engines was crucial
million people is the fifth largest in the world. In area,for the development of the domestic ethanol market,
Brazil is also the fifth largest in world.the world's largest for decades. Today, one-fifth of the
So, for decades, God’s endowed country of theBrazilian fleet runs purely on ethanol, and Brazil is the
future never materialized.sole frontrunner in the races for oil-independence and
During the 80’s and 90’s, Brazil had earning thethe green alternative to oil. The country is now the
dismal distinction of being the Third World's largestworld’s second largest producer, and largest
debtor nation. The country was unable to generateexporter of ethanol and also a world reference in
enough funds just to pay the interest charges on itsdeveloping renewable energy sources.
debt load, and was borrowing heavily just to stayEthanol has 90 percent less greenhouse gas emissions
afloat.than gasoline -- partly because cane absorbs the
In 2002, amid a great financial turbulence caused bycarbon dioxide while it grows in the fields
the Argentinean meltdown, Brazil went to the polls. TheThe demand for ethanol in Brazil is set to increase by
International Financial community was nervous about37%: 27 billion liters in 2008 and 37 billion liters in 2015
the possibility that a Lula victory would result in aBrazil is a pioneer in the development of “flex
default of the country’s foreign debt. And hisfuel” technology, launched in 2003, which allows
opponents warned his lack of education and Englishcars to run on gas and ethanol in any proportion.
language skills would be ruinous for Brazil's diplomaticBrazilian excellence in the production of ethanol has
stature.made large companies comfortable in developing
By 2006, Brazil paid off its IMF loans. In 2007, it wontechnology that uses biofuel. Currently, ten multinational
coveted investment grade ratings. In 2008, it became acarmakers produce more than 100 different models of
net foreign creditor for the first time and, in 2009, itflex fuel cars in Brazil, which has given the country the
pledged to lend the IMF $10 billion dollars.distinction of having the largest fleet of flex fuel cars in
It is a magical transformation that have occurred inthe world.
Brazil over the last 6 years when the country was onThe Third Largest Biodiesel Market in the World
the edge of debt default. Today, Brazil is the preferredBrazil is also the third largest producer and consumer
destination for international investors. In 2008,of biodiesel in the world. The National Program for the
productive foreign investment rose to a record of US$Production and Use of Biodiesel (PNPB), established in
45.1 billion, second only to China among developing2004, provides for a mandatory and gradual addition
countries.of alternative fuels to diesel. The dynamism of this
Brazil – Emerging Economic Superpowermarket in Brazil allowed the initial substitution of 2%, in
As the old joke goes, Brazil is the country of the futureforce since January 2008, which was later increased
— and always will be. Now, in the middle of theto 3% in July, requiring the production of 1.1 billion liters.
worst global downturn for decades, Brazil is now aThe law stipulates a 5% mixture by 2013, which will
country of the moment. Despite a little downturn in thestimulate new investments in production and an
last two quarters, the Brazilian economy is giving bigincrease in productivity.
signals of recovery, as can be seen from publicBrazil Becomes An Oil Superpower
investment, foreign capital inflows and even domesticThey say “God is a Brazilian." Brazil’s long
demand.awaited divine intervention just happened last year
Brazil is now the tenth largest economy in the world. Itswith major oil discovered located in sedimentary
economy restson strong fundamentals: inflation at 5%basins, around 6,000 meters beneath the surface of
annually, sustainable and fiscal stability, with a primarythe ocean.
federal budget surplus of 4.1% of GDP in 2008.Brazil will now be among the biggest producers of oil
According to Lula, Brazil will be one of the six biggestand gas in the world.
economies in the world within 10 years.The country is at the technological vanguard of deep
Brazil’s positive trade balance and the flow ofwater production and exploration of petroleum and
productive investment have contributed to buildingnatural gas reserves.
foreign currency reserves, which reached US$ 206.8Petrobras will invest US$ 174.4 billion in the next four
billion at the end of 2008.years, in the exploration of petroleum and natural gas
In 2007, Brazil launched the Growth Accelerationand the construction of new refineries, among other
Program (PAC). There are 2,198 infrastructure projectsprojects.
planned in the areas of transportation, energy,This will be a huge boon to Brazil. Oil is one of the
sanitation, housing, health and water resources. Thismost valuable resources the world has to offer, and
program will continue to bolster the Brazilian economycombined with all the other resources possessed by
during the world economic crisis.Brazil, the country is well positioned to become one of
Sam Zell, chief executive of Chicago Tribune andthe world's next superpowers.
chairman and president of Equity Group InvestmentsLula, The Man Behind Brazil’s Miraculous
LLC, said Brazil's large population of 180 million people,Transformation.
highly-trained work force, and array of crops and"His charisma and his ability to mobilize the poor have
natural resources has made it largely self-sufficient.been remarkable," said Kenneth Maxwell, director of
The World's Fifth Largest Automobile Marketthe Brazil Studies Program at the Centre for Latin
New car sales in Brazil have risen four out of the pastAmerican Studies at Harvard University.
five months, making the world's fifth largest automobile"That's my man right here," President Obama said at
market, even as makers elsewhere face plungingthe G-20 summit as Brazil President Luiz Inacio Lula de
demand.Silva approached him. "Love this guy. He's the most
Many Brazilians auto manufacturers’ officials saidpopular politican on earth. It's because of his good
they expect to move forward with plannedlooks."
investments over the next four years, including new"The banks love Lula, and business gets along with him
plants, new auto lines and renovations.quite well," says David Fleischer, a political analyst and
The World's Fourth Largest Manufacturer of Aircraftprofessor emeritus at the University of Brasilia.
Renowned for its technological capacity and creativity,Luiz Inácio Lula da Silva, nickname Lula, is the 35th and
the Brazilian aerospace industry today is the largest incurrent President of Brazil.
the Southern Hemisphere and competes in variousHaving run for President three times unsuccessfully
segments of the world market. Embraer, one of thesince 1989 election, Lula achieved victory in 2002, and
largest aircraft manufacturers in the world, forwas inaugurated as President on January 1st, 2003. He
example, is the leader in regional aircraft with up to 120was elected again in 2006, extenting his term as
seats, in addition to producing aircraft parts.President until January 1st 2011.
Brazil Becomes The Breadbasket of the WorldHis administration respected Fernando Henrique
It's no exaggeration to say that Brazil is becoming theCardoso, his predecessor, achievements that turned
world's agriculture superpower. With modern, efficientBrazil one of emerging economies and part of the
and competitive, Brazilian agribusiness isBRIC group.
prosperous,safe and profitable. One of the fewLula put social programs at the top of his agenda.
countries self sufficient in food and one of the worldLula's leading program since very early on has been a
largest food exporters.campaign to eradicate hunger, following the lead of
With 12% of all fresh water in the world, regular rainfall,projects already put into practice by the Fernando
abundant sunshine and more arable land than anyHenrique administration, but expanded as Fome Zero
other country, Brazil has the potential to practically triple(Zero Hunger).
its current grain production.The largest program is called Bolsa Família, adapted
For decades the only major export from this countryfrom Fernando Henrique Cardoso administration, are
was coffee. Today, Brazil is the number one exportercredited with helping millions eat and keep a roof over
of beef, poultry, soybeans, sugar, tropical fruits, coffeetheir heads. The subsidies require that children attend
and orange juice. It's also one of the world's topschool and receive their vaccinations.
producers of corn, cotton, cocoa, tobacco, and forestExtreme poverty has been cut in half, and 20 million
products. It also ranks as a leader in foreign sales ofhave advanced to the middle class.
beef, chicken meat and tobacco.During his second term, Lula has approval ratings of
79% of Brazilian food production is consumedover 70%, earning him praise from US President
domestically and 21% is shipped to overBarack Obama as "the most popular politician in the
212 foreign markets.world.