Impact of Globalisation on a Developing Country (Brazil)

  • Due to its history, Brazil was forced to adapt significantly in order to benefit as much as possible from globalisation. Its main hopes were to increase foreign trade and encourage more FDI.

  • The following is a list pf the most important political and ecomomic changes they have made to date to make themselves more attractive for globalisation:

  1. Political movement - The entire legal system was reformed, with laws introduced to reduce corruption. These improvements have been successful in encouraging all types of investment

  2. Removal of trade barriers - Increased trade has been facilitated through membership of the Mercosul/Mercosur (Argentina, Brazil, Bolivia, Paraguay & Uruguay). The ISI Policy also protected native industries from international competition

  • In order to adapt to the rapidly developing global economy, Brazil has had to undergo many significant economic changes. In the 1950s, the government introduced a major industrialisation policy, designed to break its dependence on the exporting of low value raw materials and to develop its own industrial wealth.

  • The government began its Import Substitution Industrialisation (ISI) Policy. Under this, industries were purposely constructed to supply goods that the country was accustomed to importing. Brazilian powers were finally starting to advocate to replace foreign imports with domestic production. This also helped Brazil to start exporting high value manufactured goods for the first time in its history. The economy transformed from being dependent of the exporting of low value raw materials to the exporting of high value manufactured goods.

  1. FDI - This has been greatly encouraged by the sale of state-owned companies (e.g. power) to private foreign investors

  2. Greater choice for consumers - Consumers are now provided with more access to and a more expansive variety of products than ever before

  3. Increased dependence on other countries - Like Ireland, Brazil is now highly dependent on the economies of other countries for their own economic growth and stability. And similarly, this can have both positive and negative effects