Destined by size to be the leading country of South America, Brazil is only just starting to realize its potential
Brazil's huge landmass occupies almost half the continent of South America. Geographically, the country's two main features are the Brazilian Highlands and the Amazon Basin. The Brazilian Highlands cover most of the south and east of the country and consist of a vast plateau with an average elevation of 1,000 metres, interspersed, particularly in the east, with rugged mountain ranges, some of which rise above 2,800 metres. Much of this area is forested or opens up to extensive prairies.
The Amazon Basin to the north and west covers more than 40% of the country. This is the world's largest river drainage system and most of it is covered with tropical rainforest. While there are still unexplored areas, many parts of the rainforest have now been penetrated by settlers, ranchers, or mining companies, a process of deforestation that has alarming environmental implications globally—in terms of climate change and loss of biological diversity. This area contains around one-fifth of world plant species. Most of Brazil has a humid subtropical climate, but the land to the north-east, known as the sertão, suffers from frequent droughts.
Brazil has long been a racial melting pot. There is little overt discrimination, but people of European origin hold the most powerful positions, followed by those of mixed race (who call themselves ‘brown’) and blacks, with the small and declining Indian population the most marginalized of all. This mixture of races has generated a vibrant and diverse culture. So although Brazil is unified by the Portuguese language and by Roman Catholicism it also has strong African influences.
This social stratification contributes to severe inequalities. The cities in the south, like Rio de Janeiro or São Paulo, are similar in many respects to those in Europe, though also have desperate shanty towns, called favelas. The north-east is almost another country—deep in the Third World.
Brazil has pioneered conditional cash transfers
Brazil has one of the world's most unequal distributions of income. The richest 10% of the population get 47% of the income while the poorest 10% get only 12%. Around 20% of Brazilians live below the poverty line. Inequality has, however, fallen in recent years as a result of faster economic growth and an innovative programme of ‘conditional cash transfers’, Bolsa Família, which offers payments to around one-quarter of the population for attending health clinics and sending their children to school.
This should help improve access to education and health services, though this is still very unequal. Brazil has a small proportion of highly educated professionals, but many children drop out of school early. Half of ten-year-olds are illiterate. Health services too are skewed. One estimate suggests that 40% of health expenditure is used for sophisticated curative treatments that benefit only 3% of the population. HIV and AIDS are significant problems but those infected can get free anti-retroviral treatment.
In many respects, Brazil is an advanced industrial economy. Around one-quarter of the labour force work in industry. With such a large population, Brazil was for decades able to direct most of its manufacturing output at its domestic market, and offered local businesses protection from foreign competition.
From 1990, however, the government opened up the markets. This helped stimulate greater efficiency in some areas—though others such as garments or shoes shrank in the face of Asian competition.
Brazil's industry has benefited from its wealth of mineral resources. It has around one-third of the world's reserves of iron ore, as well as large deposits of bauxite, coal, zinc, gold, and tin. It also has extensive oil reserves that have enabled the state oil company, Petrobrás, to supply more than half the country's needs. Vast new oil fields were discovered under the Atlantic in 2007. Most electricity, however, comes from hydroelectric plants—one of the largest in the world being the Itaipú dam shared with Paraguay on the Paraná River.
With such a huge landmass, Brazil might also be expected to be a major agricultural producer. Brazil is indeed largely self-sufficient in basic foods. It also has a large livestock herd, and is an exporter of cash crops like soya and coffee. But output is less than might be expected. This is partly because much of the land area, particularly in the Amazon Basin, is unsuitable for farming. And even the better farming land is often used very inefficiently. In fact much of the land held by the largest landowners is scarcely used at all. Some 58,000 large landowners hold half the country's farmland, while three million small farmers make do on 2%, and millions more have no land at all. Many governments have promised land reform; few have delivered.
Brazil has often been plagued by inflation—usually in at least two digits and sometimes four or five. This pattern appeared finally to have been broken early in 1994 with the introduction of a new currency, the ‘real’, which was pegged to the US dollar, a move which was strikingly successful at reducing inflation.
Any Brazilian president's task is complicated by the dispersed and fragmented nature of the political system. Brazil is a federal democracy and each of the 26 states has its own legislature and administration. States and their municipalities control over two-fifths of total tax revenues and have considerable freedom.
Federalism has the merit of permitting decentralization, but it also produces confusing overlaps. Universities and hospitals, for example, may be controlled either by the federal or state governments. There are also huge disparities between the states: the average per capita income in the state of São Paulo is around ten times that of the north-eastern state of Piaui or of Amazonas. Governments have tried to narrow these gaps by building infrastructure and offering tax breaks. As a result, many new electronics factories have sprung up in Manaus in the middle of the rainforest.
Brazilian states have considerable freedom
The federal structure also complicates political manoeuvres in the capital, Brasilia. The president does in theory have considerable power of patronage. But party allegiances are notoriously weak and temporary. Most members of the lower house concentrate on extracting federal largesse for their state or municipality. Party organization is also blurred by powerful cross-party interest groups such as the ‘ruralistas’, who lobby for large landowners.
For much of the country's history Brazil has been under centralized, authoritarian rule, including a military government from 1964 to 1985. In 1988 the country adopted a new constitution that provided for a directly elected executive president in addition to elections for the two houses of Congress. The 1988 election was won by the conservative Fernando Collor de Mellor. He resigned in 1992, having been impeached for corruption.
The 1994 election was won by Fernando Henrique Cardoso who as finance minister had been the architect of the ‘real plan’. The success of this also helped him to amend the constitution allowing him a second term in 1988.
By the 2002 elections, however, the situation had deteriorated and the currency came under pressure. Cardoso's chosen successor José Serra proved a poor candidate to face up to Luis Inácio (‘Lula’) da Silva, the charismatic leader of the left-wing Workers Party (PT), who won in a second round run-off.
Lula proved to have a sure political touch. While pushing through many radical social programmes such as Bolsa Familia, which have lifted millions of people out of poverty, he also reassured the international markets by pursuing fairly orthodox economic policies. Hugely popular, Lula was re-elected in 2006.
Under Lula's watch Brazil has strengthened both its democracy and its economy and is now considered a major global force, one of the ‘BRIC’ countries, bracketed with Russia, India and China.
Lula rejected the idea of a constitutional change that would enable him to seek a third term. The PT chose Dilma Rousseff as his successor. In 2010 she was elected president and parties in coalition with the PT achieved a majority in the National Congress. She continued the policies of Lula, but as growth began to slow she had to initiate unpopular economic reforms. In 2013, there were widespread demonstrations and unrest initially triggered by protests related to the costs of holding the 2014 World Cup. In their aftermath, Rousseff increased funding for Bolsa Familia. In the 2014 presidential elections, actively supported by Lula, she won the second round by a small margin, defeating Aécio Neves of the Social Democracy party. She was much criticized in the campaign over a corruption scandal at Petrobras, the nationalized oil company. In May 2016 the Senate voted to suspend Rousseff, beginning an impeachment trial for alleged fiscal irregularities before the previous election.