Privatization In Brazil

1929 Words 8 Pages
Intro Due to Privatization law changes by the Brazilian government, a new era dawned in Brazil in the 1990’s. This breakthrough in foreign direct investment from firms in the United State in Europe, caused a huge surge in economic growth that lasted nearly a decade. This Surge in economic growth slowed but Brazil over the years has continued to be a country to watch for new innovations in the power production industry. Until recent corruption was discovered, Brazil was expected to surpass many countries as it moved its way up the ranks among the world markets largest key players. Is foreign direct investment still a viable option for firms in the United States? The following report is an in depth look into the current economic structure and …show more content…
One of those notable and effective changes was the privatization of many state-owned enterprises, including mining, steel, aeronautics, banking, energy production that happened in the 90’s and early 2000’s. This change alone was proving extremely effective until recently when continual interference in macroeconomic policies and the micromanagement of private industry has caused the misallocation of capital, and limited the growth which was once flourishing. One example of this is the effect of agricultural subsidies, which have doubled since 2011 and now total about $10 billion alone. If that weren’t enough in 2013, the federal government introduced an increase for electricity subsidies as …show more content…
Trade between United States and Brazil was at an all-time high in 2012 with a record breaking 76 billion dollars and leaving the United States with a 11.6 billion dollar trade surplus, which is extremely encouraging to those planning a joint venture, foreign direct investment and even licensing. This accompanied with the data that the United States is Brazil’s second largest export market show that a viable partnership amongst the two countries is definitely a viable option and market for potential economic efficiency improvements for both, so much so that in 2012, Brazil was named one of ten countries for the SelectUSA pilot program to attract foreign investment to the United States. One area where the two come together is alternative energy. As the world’s two largest biofuels producers, the United States and Brazil have continually worked together on the production of biofuels for a more energy efficient global commodity. “According to the UN, in 2012 Brazil was the fourth largest destination of foreign direct investment, trailing only the United States, China, and Hong Kong. The same criteria placed Brazil in fifth in 2011 and seventh in

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