Brazil as an emerging market Assignment Example | Topics and Well Written Essays - 1000 words

Brazil as an emerging market - Assignment Example Emerging markets have their own challenges and opportunities that make them both cautious and viable as the future of the world’s economic powerhouse (Frenkel, 2009). Generally, there are general characteristics that can be associated with as many emerging markets as possible. However, not all emerging markets of the world can be described in exactly the same manner. In most cases, there are leading factors to the determination of the specific characteristics that a given emerging market would possess. Commonest among these factors are the market’s history and its evolutional processes (He, 2009). The nature of changes experienced as part of the history and evolution of the emerging market’s formation goes a long way to determine the rate of growth and development that may be generally associated with the market. In this paper, Brazil is used as a case study for emerging markets to critically assess the market in terms of its history and evolution. Consequently, some of the rapid and pragmatic changes that have been experienced as part of this history shall be outlined, making a case for each change as either being positive or negative for the market’s future fortunes. The approach of the writer is pivoted on a perception that the various emerging markets recognized by global development agencies such as the World Bank and International Monetary Fund are in constant competition with each other and so it is important that each of these markets develop its history to be a competitive advantage for winning competitive global market battles. Brief analysis of Brazil’s market history and evolution Brazil as an emerging market possesses a history that is rooted in the preference for robust domestic activity as against export demands. This is because for several years running, the market has recorded slow growth in exports as against the contributions that local market activities make to the country’s gross domestic product (H e, 2009). There is also a history rapid growth in the private sector as against the public sector. This is because most of the government’s economic principles are based on microeconomic principles, making business and investment more lucrative for local private entrepreneurs as against foreign investors who would prefer economies structured on macroeconomic competences (Todea, 2011). What is more, there is a long standing history in the dependence on specific sectors of the economy as against others. Examples of these sectors that receive dominant attention are agricultural sector, which is responsible for 39.4% of Brazil’s GDP and the mining sector, which makes 18.6% of GDP (Galai, 2007). Finally, there is generally unstable to high bank interest rate; a phenomenon that makes foreign investment less lucrative. Brazil GDP Growth Rate, 2008 to 2012 Source: Trading Economics (2013) Significant characteristics of the market, its evolution, and changes Young and Growing L abor Population Right from the history of the country when the first population census was held after colonization in 1872, Brazil has kept a very high population growth rate of 2.4% per annum (Crowder and Phengpis, 2005). This puts the current population of the country at 190 million people. Characteristically, a very high number of these people, made up of 79.8% of the population live in Southeastern region alone (Frenkel, 2009). This trend of single region dominated population has not changed with changing evolution of this emerging market. However, one phenomenon that has changed with time is the fact that there is currently a very young population margin, meaning greater percentage of the population is youth. What is positive about the young and growing labor population of the emerging market is that the large size of the population has been seen by government as an asset rather than a liability, expanding the human capital of these people to take up the labor force. It is howe ver negative if the trend of