Brazil - The Perennial Under Achiever

Early History
The treaty of Tordesillas (1494) between Spain and Portugal gave Portugal claim to the eastern portion of the then undiscovered continent of South America. Colonial rule, which started from 1500, continued till 1815 (See Exhibit V)...

The Brazilian government had traditionally been the dominant player in the economy, through wage, price, credit policies, subsidy and fiscal incentive programs. Under Cardoso, the government had attempted to reduce its involvement in the economy and sharpen its focus on public health, safety, and education...

Exports accounted for only a small fraction of Brazil's national income. But they were important as the country had to import various capital goods and raw materials, particularly crude oil. The traditional dependence on agricultural products for exports had however decreased over the years.

Manufactured wares had begun to account for an increasingly greater share of exports since the mid-20thcentury. Brazil had opened its market to international trade in recent years. Peak applied tariff rates were only 35%...