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Brazil and Privatization

Due February 22, 2005

Brief History

The earliest inhabitants of Brazil were the Indians. However, the country's recorded history begins with the arrival of the Portuguese in 1500. The Portuguese sailor Pedro Alvares Cabral visited the continent we call South America, eight years after Columbus arrived in America. Portuguese settlers followed, calling the new colony Brazil, after the brazilwood tree that they extracted red dye from. The Portuguese did not bring prosperity and progress to the Indians. Instead, they unintentionally infected and killed thousands of Indians with diseases such as measles and smallpox.

The growing number of settlers spurred the exploration of Brazil. Frontiersmen called bandeirantes established Brazil's claim to lands in the west. Their main purpose was to search for slaves and gold. They found gold in Minas Gerais in 1693, setting off a gold rush that drew thousands of settlers to Brazil's center.

During the 1500s and 1600s, five million African slaves were brought to Brazil to work on the sugarcane plantations. The slaves did not submit willingly to their fate. Many escaped and formed independent colonies called quilombos. After Brazil gained independence, a movement to end slavery slowly grew. Slavery was abolished in 1888. Brazil was the last country in the Western Hemisphere to abolish slavery.

Brazil was declared independent of Portugal in 1822 and became republic in 1889. Since then the country has been run by democratic governments and by military governments. Brazil today is a democratic republic with a president.

In the 1950's, extensive amounts of money were spent on building hydroelectric plants, highways and other economic projects. This set the stage for future growth, but also brought economic problems by putting the nation into debt. In the 1970s industry grew and provided thousand of jobs under military rule. The economy stopped growing in the 1980s and Brazil was unable to pay back its loans again. Frustrated by the debt and growing public discontent, the military handed power back to the civilian government in 1985.


Brazil has a huge range of music and dance styles. Brazil's music, dances and instruments are developed from the blending of European, African, and indigenous Indian roots. The most famous dance is the samba, which is their national beat. Another special kind of dancing is called capoeira, a mixture of martial arts, dance and fighting.

Brazil is also famous for its sculptures. Their most famous sculptor is also one of the world's most remarkable artists, Antonio Francisco Lisboa. He became known as Aleijadinho, the little cripple, when a disease paralyzed his hands. He tied a hammer and a chisel to his wrists and continued to work.

Brazilians also love sports. There is 8,000 sports clubs all over the country. They enjoy water sports, basketball, volleyball, tennis, and boxing. But none of these sports rivals their all time favorite, soccer. Brazilian's call it futebol. Scoring a goal in the world's soccer championship is the dream of every Brazilian boy.


Brazil's national language is Portuguese. Like the United States' English differs from England, Brazil also developed a character of its own. The difference is mostly from the influence of Brazil's Indians. Other influences are attributed to the African heritage and German, Italian and Spanish immigrants. Their alphabet has three fewer letters than English, missing "k", "w", and "y."

Political Makeup

During Brazil's 20 years of military rule, the army had almost complete control and congress had little power. Since 1985 the government has been in the hands of civilians. Brazil is a federal republic under the leadership of a president whose powers are similar to those of the president of the United States. A vice-president and the cabinet consisting of state ministers support the president. The government is divided into the executive, legislative and judicial branches. The president and the cabinets make up the executive branches. The president serves a five-year term and cannot be re-elected.


Brazil is the largest country in Latin America in both population and landmass, bordering every country in South America except Chile and Ecuador. Covering approximately 3.3 million square miles, Brazil is the fifth largest country in the world, only slightly smaller than the size of the continental United States.

Covering half of the country, the North contains the dense and tropical lowland basin of the Amazon, the world's largest rain forest and largest river in volume of water. In the Northeast, the most economically disadvantaged and heavily settled region of the country, agriculture is the main economic activity. The South Central region, the country's wealthiest area, contains half of Brazil's total population as well as the urbanized and industrial centers of Sгo Paulo and Rio de Janeiro, the third and ninth largest cities in the world.

Population Mix and Currency

The population estimate in 1999 was 171,853. Their ethnic groups include: white (includes Portuguese, German, Italian, Spanish, Polish) 55%, mixed white and black 38%, black 6%, other (includes Japanese, Arab, Amerindian).

The currency is the Brazilian Real. (1.795 Reals = 1 US Dollar)

Privatization in Brazil

What is privatization?

Simply put privatization is the transfer of assets or service delivery from the government to the private sector. Privatization runs a very broad range, sometimes leaving very little government involvement, and other times creating partnerships between government and private service providers where government is still the dominant player. It also includes a wide range of public-private partnerships, such as voucher systems. Even the creation of federal corporations, quasi government organizations and government-sponsored enterprises is often filed under the general category of privatization. In such organizations, though, it is often difficult to tell where government ends and the private sector begins.1

Privatization in Brazil

During 1994, Brazil's national government began considering privatization



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