Fiscal Policy Case Study

Brazil's Economy: Fixing its Finances

OR

Abstract:
Brazil, despite its rich natural and human resources, had been a social and economic under-achiever, plagued by poverty, debt, high interest rates, high rate of unemployment, crumbling ports and roadways, and horrendous crime. By 2002, the country's foreign debt stood at 56% of the gross domestic product and the impact of development measures taken in the past years was hardly visible. The Brazilian government under Luiz Inacio 'Lula' da Silva, with the assistance of international bodies like the International Monetary Fund and the World Bank, undertook the task of reforming the country's economy. The reform programme encouraged industries and exports. By 2004, the reform process was showing positive results, although a lot remained to be done.

Pedagogical Objectives:

• To discuss the various reforms adopted by Brazilian economy in the wake of economic challenges.

Keywords : Economic Crisis Case Study, Brazil, Luiz Inacio 'Lula' da Silva (Lula), GDP (gross domestic product), Real plan, Social and economic reforms, Economic restructuring, Brazilian Infrastructure Investment Fund, Foreign-currency debt, Pension scheme, VAT (value added tax), Manaus Free Trade Zone, Tax holiday, IMF (International Monetary Fund), China, Mercosur