Brazil Flexes Its Muscles
Recognizing the country’s growing importance, the 5Cs add a Portuguese class
Despite Brazil’s sparkling beaches and abundant sunshine, President Obama’s visit to the country in March of this year was purely business. Brazil now stands as the world’s seventh-largest economy, and it is poised to grow even more due to the discovery of 30 to 80 billion barrels of oil reserves off its coast.
Obama wishes to reverse the trend of economic independence in this developing nation by fostering cooperation between Brazil and the United States.
Brazil’s economic development stems mainly from its commodities. As a country rich in minerals, especially iron ore, Brazil has greatly profited from rising commodity prices. High demand from other developing nations, such as China and India, has caused Brazilian exports to skyrocket. The country exports 40 times more goods to China than it did 10 years ago.
Foreign investment has also spurred Brazil’s development, especially that of its infrastructure. Attracted by the strong economic growth, a booming housing market, and protectionist trade policies, foreigners have poured money into Brazil, providing the country with yet another source of income.
Despite the influence of foreign income on economic growth, it is Brazil’s domestic spending that has propelled the country out of the 2009 global recession. Strong job growth, low borrowing costs and tax breaks helped Brazil become the first major developing nation to escape the recession.
Of course, Brazil’s economic growth has its downsides. With rapid foreign investment and domestic spending in the economy, the central bank has to deal with the problem of inflation. Although the government set a goal of a 4.5 percent inflation rate by the end of the year, the current 12-month inflation rate is 7.23 percent. To counteract the high inflation rate, the central bank’s current interest rate is 12 percent – very high, compared to the 3.25 percent interest rate in the United States.
However, Brazil’s interest rate was cut from 12.5 percent in early September due to fears of another recession. Many economists believe this to be a political move to spur growth, and fear a reaction of even higher inflation in the future.
Brazil’s growth has not gone unnoticed within the Claremont community. As recently reported in The Student Life, the consortium added an intensive introductory Portuguese class for this semester only. Each dean of faculty gave $7,500 to make the course possible. Housed at Pomona and taught by a Scripps professor, students from each of the five colleges are enrolled in the class.
Professor Rita Alcala, who teaches the Portuguese class, saw the effects of Brazil’s growth first hand when she visited the Salvador de Bahia. “I was told that because the governor of Bahia is friends with President Lula, the state and the city of Salvador de Bahia are seeing unprecedented support from the federal government. There was construction going on all over the city. Additionally, I was informed of the enormous investment in education and medical care for people of all social strata. For example, the government is paying for preventative healthcare as well as private school tuition for children of the poor to better enable them to attend university,” explained Alcala.
In addition to her knowledge of Brazil, she also shared her insights about the importance of the Portuguese class. “The interest in Brazil here and the demand for English speakers there is happening right now. This class will make an enormous difference in the kind of experience students have while studying abroad in Brazil or doing a Fulbright there after graduation.”
With Brazil hosting both the 2014 FIFA World Cup and 2016 Olympics, people around the globe will see the effects of the country’s economic growth. While fears of inflation in the country still remain, Brazil is poised to make a splash on the world stage when it shows off its developing infrastructure.