Will Brazil's development last long?Do you think that Brazil, a member of the BRIC countries, will continue its development at the same level as other members of the BRIC such as China? Based on...
Do you think that Brazil, a member of the BRIC countries, will continue its development at the same level as other members of the BRIC such as China? Based on the fact that its resources are mainly natural resources while China has cheap labor and great communications capabilities for example.
That's a really good question and I'm sure a lot of Brazilians would like to know the answer.
As it is, you could argue that Brazil is ahead of China. Brazil's GDP per capita is well ahead of China's though China is growing much faster.
I don't think that the problem with Brazil is that it is dependent on natural resources. After all, services make up two-thirds of its economy, which puts it closer to the US in terms of the composition of its economy (the US has services making up 76% of its economy) than to China (where services are only 43%). Instead, I think that the problem may be that Brazil might be hitting the "middle income trap."
I think that Brazil's main challenge is to figure out how it gets out of this trap. We will see if China will hit the same trap in the near future.
Much depends, I think, on whether Brazil can avoid the kind of indebtedness that seems to be afflicting most of the "developed" countries of the world. Apparently its national debt is roughly 41% of GDP, versus a national debt for the U. S. of over 99% of GDP. It will be interesting to see if the newly developing countries can avoid the kinds of messes the developed countries have made of their economies.
But do you think the methods used to avoid the "burdens" of the developed countries are going to last? I have heard Brazilians have a quota of US Dollars that can be acquired and they are allowed to change money only to buy on the Internet or when they plan to travel. Do you think limiting unnecessary imports is a good idea?