A Global Country Study Report On Brazil Submitted to Institute Code: 769 Institute Name: GIDC Rajju Shroff ROFEL Institute of Management Studies Vapi In partial Fulfilment of the Requirement of the award for the degree of Master of Business Administration (MBA) By Gujarat Technological University Ahmedabad Prepared by: Students of MBA (Semester - III and IV) EXECUTIVE SUMMARY History and Background of BRAZIL On April 22, 1500, a Portuguese guide called Pedro Averse Cabral reached the shores of Brazil. The country took its name from “brazil wood”, a redwood tree commonly found along the Brazilian coastline that was normally used to dye garments back in Europe. How did Brazil become independent from Portugal? Claiming neutrality,Portugal sustained to honor previous trade treaty with England. Before Napoleon’s troops could get to Portugal, Queen Maria I and her son, Prince Joao VI left the country and sailed to Brazil. The presence of the royal family for a period of 14 years considerably changed Brazil’s economic environment. The country came to know a higher level of autonomy and modernization. How is Brazil governed today? Today, Brazil is a lively democracy. The current President, Luís Inácio Lula da Silva, took office in January, 2003. Capital: brazilia Climate: mostly tropical, but mild in south Population: 205716890 in 2012 July Ethnic Make-up:white 55%, mixed white and black 38%, black 6%, other 1% Religions: Roman Catholic (nominal) 80% Government: federative republic Natural resource: iron ore, manganese, bauxite, nickel, uranium, phosphates, tin, hydropower, gold, platinum, petroleum, timber Languages: Portuguese (official), Spanish, English, French . DEMOGRAPHIC PROFILE OF BRAZIL Population: 205,716,890 in July 2012 Age structure: 0-14 years: 26.2% in male 27,219,651/female 26,180,040 15-64 years: 67% in male 67,524,642/female 68,809,357 Median age: Total: 29.3 years, Male: 28.5 years Population growth rate: 1.102% in 2011 est. Birth rate: 17.48 births/1,000 population in 2011 est. Death rate: 6.38 deaths/1,000 population in July 2011 est. Net migration rate: -0.09 migrant(s)/1,000 population in 2011 est. Urban population: 87% of total population in 2010 Rate of urbanization: 1.1% annual rate of change in 2010-15 est. Major cities – population: Sao Paulo 19.96 million; Rio de Janeiro 11.836 million; Belo Horizonte 5.736 million; Porto Alegre 4.034 million; BRASILIA (capital) 3.789 million in 2009 Sex-ratio At birth: 1.05 male(s)/female Under 15 years: 1.04 male(s)/female 15-64 years: 0.98 male(s)/female Total population: 0.98 male(s)/female in 2011 est. Infant mortality rate: Total:20.5 deaths/1,000 live births Male: 23.9deaths/1,000 live births Female: 16.93 deaths/1,000 live births in 2011 est. Total population: 72.79years, male: 69.24 years Total fertility rate: 2.16 children born/woman in 2011 est. Noun: Brazilian(s), Adjective: Brazilian Definition: Total population: 88.6% Male: 88.4%, Female:88.8% (2004 est.) Total: 14 year, Female:14 years in 2008 Education expenditures: 5% of GDP in 2007 Maternal mortality rate: 58 deaths/100,000 live births in 2008 Physicians density: 1.72 physicians/1,000 population in 2007 Hospital bed density, 2.4 beds/1,000 population in 2009 ECONOMIC OVERVIEW OF BRAZIL Characterized by large and well-developed undeveloped, mining, manufacturing, and service sectors, Brazil's economy outweighs that of the all other South American countries, and Brazil is expanding its attendance in world markets. In 2008, Brazil became a net external creditor and two ratings agencies awarded investment score status to its debt.After record increase in 2007 and 2008, the start of the global financial crisis hit Brazil in September 2008. GDP in purchasing power parity: $2.282 trillion in 2011 estimated. $2.222 trillion in 2010 estimated. $2.067 trillion in 2010 estimated. Note: data are in 2011 US dollars GDP in official exchange rate: $2.518 trillion in 2011 estimated. GDP - real growth rate: GDP - per capita : 2.7% in 2011 estimated. $11,600 in 2011 estimated. 7.5% in 2010 estimated. $11,300 in 2010 estimated. 0.6% in 2009 estimated. $10,800 in 2009 estimated. Note: data are in 2011 US dollars GDP - composition by sector: Unemployment rate: Agriculture: 5.5% 6% in 2011 estimated. Industry: 27.5% 6.7% in 2010 estimated. Services: 67% in 2011 esimatedt. Agriculture: 20% Population below poverty line: 26% in 2008 Industry: 14% Labor force: 104.7 million in 2011 estimated. Services: 66% in 2003 estimated. Unemployment, youth ages 15-24: Total: 17.8%; Male: 13.9%, Female: 23.1% Household income or consumption by percentage share: Lowest 10%: 1.2%, Highest 10%:42.5% in 2009 Investment (gross fixed): 19.3% of GDP in 2011 estimated. Budget: Expenditures: $900.2 billion in 2011 estimated. Taxes and other revenues: 39.9% of GDP in 2011 estimated. Budget surplus or deficit: 3.1% of GDP in 2011 estimated. Public debt: 54.4% of GDP in 2011 estimated.,54.7% of GDP in 2010 estimated. Inflation rate (consumer prices): 6.5% in 2011 estimated., 5% 2010 estimated. Central bank discount rate: 11% in 31 December 2011 estimated,,10.75% in 31 December 2010 estimated. 45.6% in 31 December 2011 estimated.,39.992% in 31 December 2010 estimated. Current Account Balance: $63.47 billion in 2011 estimated.. , $47.36 billion in 2010 estimated. Exports 250.8 billion in 2011 estimated. Exports - commodities: Transport equipment, iron ore, soybeans, footwear, coffee, autos Imports: $219.6 billion in 2011 estimated., $181.7 billion in 2010 estimated. Imports – commodities: Machinery, electrical & transport equipment, chemical products, oil, automotive parts, electronics Imports – partners: US 15%, China 14.1%, Argentina 7.9%, Germany 6.9%, South Korea 4.6% in 2009 Reserves of foreign exchange and gold: $357.9 billion in 31 December 2011 estimated., $288.6 billion in 31 December 2010 estimated. Debt – external: $410 billion in 31 December 2011 estimated., $346.5 billion in 31 December 2010 estimated. History and Background of BRAZIL On April 22, 1500, a Portuguese guide called Pedro Averse Cabral reached the shores of Brazil. The country took its name from “brazil wood”, a redwood tree commonly found along the Brazilian coastline that was normally used to dye garments back in Europe. In 1494, the "Treaty of Tordesillas" between Spain and Portugal established the dispute about lands yet to be discovered. According to the agreement, territories lying east of an imaginary north-south line located 370 leagues west of Cape Verde Islands would belong to Portugal, and lands to the west of that unreal line would be under Spanish control. This division, extending from pole to pole, dissected the easternmost part of the South American continent and distinct Brazil's first frontier (although the discovery by Pedro Alvares Cabral did not take place until six years later, in 1500). Brazil is among the nations that have been considerably shaped by geography and culture. Brazil being the main nation in South America has also been the source of many of the central natural resources such as coffee, sugar and timber. The culture is a major budding fusion of African, indigenous Indians and Portuguese influences, all of which have left a stain on Brazilian society leading to a totally different and wealthy culture. Brazilian culture has overtime been known of free, hospitality and rhythmic and colorful activities such as carnival. Since Brazil predominant religion is Catholicism, many of the events are catholic influenced. The range of Brazilian culture is moreover emphasizing by the common class differences which filter through almost in all aspects of the society. Coming to an sympathetic of Brazilian society, its distinctive values and attitudes of the people will greatly help one to found up a superior relationship and carry out business more successfully with the Brazilians. How did Brazil become independent from Portugal? In the first decade of the 19th century, Europe was in disorder. France's attempt to rule Europe met with English confrontation, and, as consequence, Napoleon tried to prevent other countries from trading with England. Claiming neutrality,Portugal sustained to honor previous trade treaty with England. But France & Spain sign the Treaty of Fontainebleau in 1807 and decided to divide Portugal between them. Soon after that, Napoleon prearranged an attack of Portugal. Before Napoleon’s troops could get to Portugal, Queen Maria I and her son, Prince Joao VI left the country and sailed to Brazil. They arrived in January 1808, and remained until 1821. Napoleon's dominance of Portugal had ended in 1815, because Joao VI chose to stay in Rio de Janeiro, even after the death of his mother in 1816. In 1821, however, he yielded to political pressure from Portugal, and returned to Lisbon, leaving Pedro, the Crown Prince, in Rio as "Regent Viceroy ". The presence of the royal family for a period of 14 years considerably changed Brazil’s economic environment. The country came to know a higher level of autonomy and modernization. Joao VI nullified earlier Portuguese laws that prohibited local manufacturing of textiles, gunpowder, and glass, as well as the building of wheat mills. These events were adopted as a means to ease the transition toward political independence. Back in Lisbon, politicians did not like the way things were leaving, whereas in Brazil Pedro's adviser promoted the idea of independence. Barely a year after Joao VI's return to Portugal, the Crown Prince proclaimed the independence from Portugal, on September 7, 1822, and had himself crowned Emperor of Brazil, below the name Pedro I. While the Spanish viceroyalties in the Americas had to fight fiercely for their independence, to end up as several diverse republics, Portugal and Brazil settled the matter by negotiation, with Great Britain acting as a broker.