The Second Republic. I
n 1945, the army forced Vargas to resign, and General Eurico Gaspar Dutra was elected to succeed him. But in 1950, Vargas was elected. In 1954, following a serious political crisis, Vargas took his own life. Juscelino Kubitschek de Oliveira then became president.
Kubitschek told the Brazilians that they would “enjoy in five years the progress of 50 years.” He worked hard to live up to his promise. The government built a new capital in Brasília and helped develop hydroelectric plants and some industries. But inflation and falling world coffee prices brought new economic and social problems. In 1960, Jânio Quadros was elected president, but his attempts to improve conditions were blocked. He resigned within a year, and his vice president, João Goulart, took his place.
By 1964, Goulart’s leftist policies had created an economic crisis. Discontent with his government led to a revolution, supported by the United States, that brought the military to power. Until 1985, Brazil’s presidents all came from the armed forces. In 1985, Tancredo de Almeida Neves, a civilian, was elected president. Neves died before his inauguration, and the vice president, José Sarney, became president.
The 1989 elections were the first since 1960 in which Brazilians voted directly for the president. Fernando Collor de Mello won the presidency after a runoff election but was impeached in 1992 on charges of corruption. He resigned and was succeeded by his vice president, Itamar Franco. In 1994, Fernando Henrique Cardoso became president. He was re-elected in 1998, becoming the first president in Brazil’s history to win a second term. As president he favored policies that made Brazil attractive for foreign investment while at the same time addressing some of Brazil’s most pressing social needs.
Cardoso’s primary challenge was to stabilize the country’s failing economy. In order to avert a disaster, the International Monetary Fund (IMF) stepped in and gave $41.5 billion in emergency funds; in 1999 the government reduced the value of its currency. In 2001, Cardoso announced the launch of a $6 billion anti-poverty program that included health and education programs for the poor. But the economy worsened, and the IMF had to grant further loans. In 2002, Luiz Inácio Lula da Silva of the Worker’s Party was elected president. Da Silva, popularly known as Lula, was a former factory worker and labor leader. He won the election by the largest margin in Brazil’s history.
Highly unequal income distribution and crime remain pressing problems.
Brazil has one of the world’s largest economies, with well-developed agricultural, mining, manufacturing, and service sectors. Vast disparities remain, however, in the country’s distribution of land and wealth. Roughly one fifth of the workforce is involved in agriculture. The major commercial crops are coffee (Brazil is the world’s largest producer and exporter), citrus fruit (especially juice oranges, of which Brazil also is the world’s largest producer), soybeans, wheat, rice, corn, sugarcane, cocoa, cotton, tobacco, and bananas. Cattle, pigs, and sheep are the most numerous livestock, and Brazil is a major beef and poultry exporter. Timber is also important, although much is illegally harvested.
Brazil has vast mineral wealth, including iron ore (it is the world’s largest producer), tin, quartz, chrome ore, manganese, industrial diamonds, gem stones, gold, nickel, bauxite, uranium, and platinum. Recently discovered offshore petroleum and natural gas deposits could also make the nation a significant oil and gas producer. There is extensive food processing, and the leading manufacturing industries produce textiles, shoes, chemicals, steel, aircraft, motor vehicles and parts, and machinery. Most of Brazil’s electricity comes from water power, and it possesses extensive untapped hydroelectric potential, particularly in the Amazon basin.
In addition to coffee, Brazil’s exports include transportation equipment, iron ore, soybeans, footwear, motor vehicles, concentrated orange juice, beef, and tropical hardwoods. Machinery, electrical and transportation equipment, chemical products, oil, and electronics are major imports. Most trade is with China, the United States, Argentina, and Germany. Brazil is a member of Mercosur. (officially the Common Market of the South, Latin American trade organization established in 1991 to increase economic cooperation among the countries of E South America.)
Brazil’s economy outweighs that of all other South American countries, and Brazil is expanding its presence in world markets. Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments. In 2008, Brazil became a net external creditor and two ratings agencies awarded investment grade status to its debt. After strong growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in 2008. Brazil experienced two quarters of recession, as global demand for Brazil’s commodity-based exports dwindled and external credit dried up. However, Brazil was one of the first emerging markets to begin a recovery. In 2010, consumer and investor confidence revived and GDP growth reached 7.5%, the highest growth rate in the past 25 years. Rising inflation led the authorities to take measures to cool the economy; these actions and the deteriorating international economic situation slowed growth to 2.7% for 2011 as a whole, though forecasts for 2012 growth are somewhat higher. Despite slower growth in 2011, Brazil overtook the United Kingdom as the world’s seventh largest economy in terms of GDP. Urban unemployment is at the historic low of 4.7% (December 2011), and Brazil’s traditionally high level of income inequality has declined for each of the last 12 years. Brazil’s high interest rates make it an attractive destination for foreign investors. Large capital inflows over the past several years have contributed to the appreciation of the currency, hurting the competitiveness of Brazilian manufacturing and leading the government to intervene in foreign exchanges markets and raise taxes on some foreign capital inflows. President Dilma ROUSSEFF has retained the previous administration’s commitment to inflation targeting by the central bank, a floating exchange rate, and fiscal restraint
Brazil covers nearly half of South America and is the continent’s largest nation. It extends 2,965 mi (4,772 km) north-south, 2,691 mi (4,331 km) east-west, and borders every nation on the continent except Chile and Ecuador. Brazil may be divided into the Brazilian Highlands, or plateau, in the south and the Amazon River Basin in the north. Over a third of Brazil is drained by the Amazon and its more than 200 tributaries. The Amazon is navigable for ocean steamers to Iquitos, Peru, 2,300 mi (3,700 km) upstream. Southern Brazil is drained by the Plata system—the Paraguay, Uruguay, and Paraná rivers.
Brazil is governed under the 1988 constitution as amended. The president, who is elected by popular vote for a four-year term (and may serve two terms), is both head of state and head of government. There is a bicameral legislature consisting of an upper Federal Senate and a lower Chamber of Deputies. The 81 senators are elected for eight years and the 513 deputies are elected for four years. The president may unilaterally intervene in state affairs. Administratively, the country is divided into 26 states and one federal district (Brasília); each state has its own governor and legislature. The main political parties are the Brazilian Democratic Movement party, the Liberal Front party (now known as the Democrats party), the Democratic Labor party, the Brazilian Social Democracy party, and the Workers party.
Brazil has the largest population in South America and is the fifth most populous country in the world. The people are diverse in origin, and Brazil often boasts that the new “race” of Brazilians is a successful amalgam of African, European, and indigenous strains, a claim that is truer in the social than the political or economic realm. Not quite half the population is of European descent, while more than 40% are of mixed African and European ancestry. Portuguese is the official language and nearly universal; English is widely taught as a second language. Most of the estimated 350,000 to 550,000 indigenous peoples (chiefly of Tupí or Guaraní linguistic stock) are found in the rain forests of the Amazon River basin; 12% of Brazil’s land has been set aside as indigenous areas. About 75% of the population is at least nominally Roman Catholic; there is a growing Protestant minority.