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Economy of Brazil

This is just a brief comment about recent economic trends in Brazil.

For several decades, Brazilian development has been (successfully) based on an import substitution strategy.

The main problem in the 1980s was the enormous inflation.

In 1990, after a few years of an informal and slow opening of the economy, the country has made some dramatic changes, strongly reducing the import tariff and emphasizing the need for quality (read ISO 9000 series adoption).

In 1994, the Real plan successfully eliminated inflation, and Brazilian purchasing power has dramatically improved. Almost 25 million people turned into consumers "overnight". Consumer good imports have grown very fast at a first stage. Companies, realizing the business opportunities, increased its investment in Brazil and slowly the import pattern has changed from consumer goods into machinery and other capital goods.

Nowadays, Brazil is facing a new challenge: to move forward into a new development strategy - the "export substitution" phase. This will also enable local government to reduce the inequalities in wealth distribution.

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