Impact of International Economic Conditions, Trade and Financial Policies on Brazil

Topic: Economics
Words: 2080 Pages: 7


Economic conditions are the current economic state of a region or country. The circumstances alter over time, together with the business cycles and economy, as a region’s economy undergoes periods of contraction and expansion (Genna, 2018). Technology, on the other hand, is equipment and machinery created from scientific knowledge application. Furthermore, in the business world, especially those that operate internationally, financial policies are laws that oversee, supervise, and regulate the payment and financial systems in order to promote stability, consumer and client-asset protection, efficiency, and market efficiency (Schoemaker, 2004). For all these to take place, trade must exist between individuals or countries, and this occurs when they either buy or sell to each other. This case study investigates how international economic conditions, technology, financial policies, and trade have impacted Brazil.

Literature Review

Brazil is one of the countries considered a developing country in the world. One contributing factor to the country’s economic condition is population growth. According to Cunha, Haines, and Da Silva (2019), Brazil is ranked among the top countries with the highest population growth. They continue to explain that when the population of a given country increases, it affects the economy of that particular country. The reason, in this case, is that the nation is unable to provide enough resources to sustain the increased number of people. As a result, Brazil has a lot of individuals without employment. Since there is a lack of job opportunities, most people cannot afford decent shelters. Furthermore, they cannot afford basic amenities such as taking their children to school or basic healthcare.

International economic conditions do not favor countries such as Brazil. From Ali-Yrkkö, Rouvinen, Seppälä, and Ylä-Anttila, (2011) research, it was found that the economy of the world always increases, and the developing world often bears the most burden compared to developed countries. Furthermore, statistics demonstrate that developed countries are the ones that make decisions when it comes to global economic development (Frank et al., 2019). For this reason, third-world countries such as Brazil find it challenging to adapt to the changing economic climate. Research shows that such commodities as petroleum and gasoline trade more expensively in third-world countries than in first-world countries (Fernandes et al., 2017). Additionally, first-world countries control these commodities, and, as a result, Brazil has to import such precious goods. Since their currency is below that of countries such as the United States, Brazil has to pay more for this product, thereby making their economic condition worsen.

There exist a huge difference between developed countries and undeveloped nations. Since its invention, technology has made work easier in most sectors of the economy. According to research, the international market is shifting towards a sustainable economy (Ali-Yrkkö, Rouvinen, Seppälä and Ylä-Anttila, 2011). to achieve this, they have put in place plants that manufacture renewable energy, such as bioethanol. Research states that developed countries are currently developing their second-generation biofuel machinery (Brazil – Place Explorer – Data Commons, 2021). On the other hand, such countries as Brazil have been trying to improve their first-generation biofuel industry to cope with the dynamic business environment. The difference between a developed country and an underdeveloped nation is that first-world countries are able to access modern technology at a much faster and cheaper price compared to underdeveloped countries. Research states that while Brazil is at the research and development stage for second-generation biofuels, countries such as the united stage are discovering methods of improving their second-generation machinery (Brazil – Place Explorer – Data Commons, 2021). Thus, technology is an important factor when it comes to the growth of a given country.

Developing countries are further using below-level technologies compared to developed countries. Ali-Yrkkö et al. (2011) state that countries such as Brazil have difficulty coping with rapidly changing technological advancements. Furthermore, Viola and Lim (2017) support this idea by acknowledging the fact that developing countries do not have enough capital to secure such advanced technology. Additionally, research states that most of the modern machinery is found in developed countries (Viola & Lima, 2017). In this case, developing countries have to import modern machinery to attempt to cope with the advancing technology. This is an expensive affair, which Brazil cannot afford since its currency does not have much of that of developed countries. Consequently, Brazil, as a developing nation, continues to use outdated technology to conduct its business operations. Compared to the United States, the rate of production of both local and international goods is slower, thereby affecting the growth of Brazil.

On the other hand, financial policies are rules put in place to safeguard individuals, entities, or countries engaged in business. According to Fernandes et al. (2017), the purpose of financial policies is to maintain compliance with regulatory needs. To promote business, the government of Brazil awards non-profit companies that require them to conform to certain provisions to ensure uniformity. Furthermore, these regulations are essential because they enable an organization to attract new businesses within the country. Nevertheless, these financial policies rarely work, with most government officials taking advantage of foreign investors. Viola and Lima (2017) state that developing countries such as Brazil have corrupt government officials who demand bribes from international companies in order to allow them to operate within their countries. Furthermore, Genna (2018) asserts that some of these elected leaders have the power to bypass some policies, which may enable a company to operate without paying some taxes. As a result, third-world countries lose a lot of revenue that may be otherwise utilized in the development of their economies.

Trade involves different entities or individuals engaging in the exchange of goods and services. It affects the economy of a country in various ways depending on the type of commodity being traded. Research has it that nations trade on their own or with each other when they lack particular resources to sustain their people (Sousa et al., 2018). Frank et al. (2019) assert that by exploiting and developing their scarce resources, nations can produce products and services in excess, and they can leverage this to obtain the resources they require. Currently, the global economy mainly depends on international trade, which is responsible for most developments in both developed and underdeveloped countries (Sousa et al., 2018). In this case, Brazil imports services and goods for numerous reasons. One of these reasons is that some of these products or services are cheaper than what is made locally. Additionally, they are of better quality compared to local goods due to the low level of technological advancement. Thus, trade is an important factor because it ensures that individuals can access what they need.

Despite the advantages of trade in Brazil, there are numerous areas where it has failed the country. In some sections of Brazil’s economy, there is overspecialization, and this has led to the loss of jobs since some of the products for domestic use are being produced cheaply in countries such as China and Japan (Fernandes et al., 2017). Employment lost via such alterations results in systemic unemployment within the country. In Brazil, particular industries are unable to develop due to completion from established international organizations (Frank et al., 2019). For instance, new local businesses find it challenging to compete with already-established foreign organizations. Furthermore, Sousa et al. (2018) state that domestic producers with distinct goods meant to meet the requirements of the local market suffers since the country imports cheaper products. When this continues for a long time, the output diversity in Brazil’s economy may reduce as domestic producers exit the market.


The study utilizes a descriptive research design to examine how international economic conditions, technology, trade, and financial policies affect Brazil. According to Fernandes et al. (2017), descriptive research is advantageous in situations that require a description of the current status of a phenomenon. To find out more about these phenomena, experts utilized peer-reviewed resources from the internet. Researchers utilized both Google search and Google scholar to find vital resources related to the topic. There were numerous articles related to the subject being researched. To ensure that the study remained viable resources, experts classified the resources under trade, financial policies, technology, and international economic conditions concerning Brazil. The advantage of this method is that it was less cumbersome, as researchers were able to access resources using their computers and mobile phones. Furthermore, they were able to work remotely, thereby making the process easier. However, the limitation was that since individuals were able to work remotely, coordination and discussions proved to be challenging.

Findings and Discussion

In terms of the international economic situation of Brazil, the results demonstrate that as a third-world country, it is mostly affected by population growth. Research shows that since the 1970s, the population growth rate in Brazil has been decreasing (Fernandes et al., 2017). Currently, when compared to developed countries such as the United States, Brazil’s increase in population is higher (Frank et al., 2019). A rapidly increasing population lowers the quality of life of most Brazilians. Frank et al. (2019) state that such elements as illiteracy and lack of access to safe water and health services are clear indications of low quality of life. Statistics further show that Brazil’s infant mortality rate in 2020 was approximately 12.0 deaths per thousand live births (Brazil – Place Explorer – Data Commons, 2021). This is a further indication that Brazil has a poor international economic condition. Furthermore, compared to countries such as the United States, Brazil has a weaker economy because of the fewer jobs it offers its citizens.

There is a deficiency in technological development in Brazil compared to first-world countries. According to Genna (2018), Brazil has an established biofuel industry that produces bioethanol. However, it still utilizes outdated modes of production, which are slow and expensive to manage. Sousa et al. (2018) attribute the reason for the lack of change to insufficient financial resources to acquire modern technology. Additionally, the country is still investing in research and development projects to determine how it can improve its technology. Despite being behind, there are some areas, such as the sugarcane production sector, where the nation has introduced modern technology to boost its export products.

In relation to trade and financial policies, the country engages in both to improve its economy. Brazil trades in different products, such as raw sugar, soybeans, and crude oil, which it exports to other countries to generate income (Viola & Lima, 2017). On the other hand, the nation imports other products, such as machinery, which it lacks. For this reason, Brazil is able to provide for its citizens, thereby making life much easier for them. In terms of financial policies, there are regulations put in place to protect business operations. Genna (2018) states that the country provides incentives to local producers to reduce the cost of the product. This is essential because it ensures that most people buy local products.

The research analyses how different aspects, such as international economic conditions, technology, trade, and financial policies, have impacted Brazil. Economic conditions are those circumstances that determine the economy of a given country. In this case, compared to other countries, especially developing ones, Brazil is still behind. Additionally, there are fewer technological advancements in Brazil, and this has affected its growth. For instance, in the biofuel sector, Brazil is still utilizing outdated technology in the process of production. When it comes to trade, Brazil conducts this process both internally and externally. This means that the country participates in trade with its people and can further conduct business with other countries. However, due to challenges such as population growth, the country is still struggling to improve its economy. Brazil’s financial policies are further meant to protect its assets and that of other traders within the business environment. Nevertheless, it still has minor loopholes that need that allow others to participate in unscrupulous behavior.

Brazil is a third-world country with numerous opportunities for growth and development. The study recommends that in order for it to compete with developed countries at the same level, it needs to adopt new technology. Furthermore, it should consider including more measures that would ensure that its financial policies are not abused by government officials. Additionally, the case study identifies numerous areas that can be studied further in the future. One of these areas is in the trade sectors, and, in this case, researchers can consider how Brazil exchanges goods and services with other countries. The essence of this is that it provides an opportunity to improve this trade, thereby enhancing Brazil’s economy.

Reference List

Ali-Yrkkö, J., Rouvinen, P., Seppälä, T. and Ylä-Anttila, P., 2011. Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone. Journal of Industry, Competition and Trade, 11(3), pp.263-278. 2021. Brazil – Place Explorer – Data Commons

Cunha, A., Haines, A. and Da Silva, P., 2019. Global financial cycle and Brazil’s financial integration. International Review of Applied Economics, 33(6), pp.829-851.

Fernandes, G., Vale, M., Overbeck, G., Bustamante, M., Grelle, C., Bergallo, H., Magnusson, W., Akama, A., Alves, S., Amorim, A., Araújo, J., Barros, C., Bravo, F., Carim, M., Cerqueira, R., Collevatti, R., Colli, G., da Cunha, C., D’Andrea, P., Dianese, J., Diniz, S., Estrela, P., Fernandes, M., Fontana, C., Giacomin, L., Gusmão, L., Juncá, F., Lins-e-Silva, A., Lopes, C., Lorini, M., de Queiroz, L., Malabarba, L., Marimon, B., Junior, B., Marques, M., Martinelli, B., Martins, M., de Medeiros, H., Menin, M., de Morais, P., Muniz, F., Neckel-Oliveira, S., de Oliveira, J., Oliveira, R., Pedroni, F., Penha, J., Podgaiski, L., Rodrigues, D., Scariot, A., Silveira, L., Silveira, M., Tomas, W., Vital, M. and Pillar, V., 2017. Dismantling Brazil’s science threatens global biodiversity heritage. Perspectives in Ecology and Conservation, 15(3), pp.239-243.

Frank, M., Autor, D., Bessen, J., Brynjolfsson, E., Cebrian, M., Deming, D., Feldman, M., Groh, M., Lobo, J., Moro, E., Wang, D., Youn, H. and Rahwan, I., 2019. Toward understanding the impact of artificial intelligence on labor. Proceedings of the National Academy of Sciences, 116(14), pp.6531-6539.

Genna, G., 2018. Rising Powers and Foreign Policy Revisionism: Understanding BRICS Identity and Behavior through Time by Cameron G.Thies and Mark DavidNieman. Ann Arbor, University of Michigan Press, 2017. 216 pp. $70.00. Political Science Quarterly, 133(4), pp.774-775.

Sousa, M., Figueiró, M., Silva, A., Silva, E., Silva, M., Pereira, V. and Barreto, J., 2018. PP162 Bridging Brazil’s Know-Do Gap On Social Engagement In Health Technology Assessment. International Journal of Technology Assessment in Health Care, 34(S1), pp.129-130.

Schoemaker, P.J., 2004. Forecasting and scenario planning: the challenges of uncertainty and complexity. Blackwell handbook of judgment and decision making, pp.274-296.

Viola, E. and Lima, J., 2017. Divergences Between New Patterns of Global Trade and Brazil/Mercosur. Brazilian Political Science Review, 11(3).

Minimum Wage and Efficiency Wage Theory
The Evolved Federal Reserve’s Role in the US Economy