Brazil: Embracing Globalization?

Brazil?s Import Substitution StrategyAfter the Great Depression in 1930, the Import Substitution approach was adopted by close nations in Latin America.The logic behind this approach was to fill in import products with those locally produced. In this case, Brazil?s strategy was characterized by massive government investment, tar guideing of key industries, and protection against tilt with towering tariffs walls. The Import substitution strategy was an effort to modernize, annex the growth rate of the economy and enforce the domestic turnout to be strong enough to compete more expeditiously in the international markets. As a result of this strategy, the Brazilian economy taked rapid growth and economy variegation between 1950 and 1963 (See video display 1) especially the industry and services sectors (See Exhibit 2).

After of 13 years of economic growth, this strategy brought oppose side effects to the country. Inflation began to rise and the economy started to experience balance of payments problems addressed by devaluating the currency and attracting foreign capital.

In 1973 when the first oil shock took place, Brazil was importing 80% of its oil. The government designed a plan called ?National increase Plan? that included a huge investment political program and incentives for the local companies to intensify the import substitution strategy.



But at this time, the strategy didn?t result as they expected, instead, the foreign debt and ostentatiousness increased. (See Exhibits 3 and 4).

Mercosur and Regional Integration InitiativeBetween 1981 and 2000 Brazil went though a lot of problems. One of the government?s major precedency was to increase exports by overcoming two kinds of problems: internal factors included high tax burden and inadequate infrastructure and external problems such(prenominal) as wide variety of trade barriers that kept Brazilian products out of the world market. One way to meet these goals was to enrol in World Trade Organization to fight...

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