Marcelo de Paiva Abreu

Brazil as a Debtor, 1824-1931

Internal rates of return of Brazilian loans floated between 1824 and 1931 fell below those of British and US government consols and bonds only for some of the loans floated after the beginning of the twentieth century. Higher volatility of yearly rates of return was rewarded by higher returns for all Brazilian Federal loans. Their spreads over consols in 1824-1943 are compared to those of Argentina and Chile and of Brazilian state and municipal loans for 1888-1930. In spite of some deterioration over time, Brazilian loans had a better performance than suggested by the literature, especially in the 1920s.

Import Substitution and Growth in Brazil, 1890s-1970s

It is extremely difficult to disentangle for analytical purposes the origins and deepening of import substitution in Brazil from the consolidation and continuous growth of the coffee export economy. In an almost trivial sense, this is because the demand generated by the rapidly growing coffee economy served as an engine of growth. First coffee stimulated products whose domestic production was protected by relatively high transportation costs; then its influence spread more generally, as animal spirits, manpower availability, credit facilities, tariff protection and foreign supply disturbances made possible the substitution of more sophisticated imports.

The Brazilian Economy, 1994–2004: An Interim Assessment

INTRODUCTION The Brazilian economic agenda after the successful introduction of the Plano Real in July 1994 continued to be dominated by efforts to stabilise the economy. The evolution of macroeconomic policies and the constraints they faced under the two administrations of Fernando Henrique Cardoso (1995–2002) is the central concern of this chapter, which is inevitably more speculative than its predecessors because it is based on a more restricted range of published research and lacks a sufficiently long time perspective. At first, the main economic policy objective of the Cardoso administration was to consolidate the results of the Plano Real and to make sure that Brazil’s long experience of high inflation was really over. But soon the need to bring public accounts under control and to make a sizable external adjustment would become the main challenges. A major balance of payments crisis early in 1999, immediately after Cardoso’s re-election, imposed much overdue drastic changes in economic policy. Further disturbances occurred in 2002, the last year of Cardoso’s second term, as financial markets reflected fears that economic policy could be reversed with the likely victory of the opposition presidential candidate, Luiz Inacio Lula da Silva, the trade union leader who had emerged from the bitter fights of organised labour against the military dictatorship in the late 1970s and early 1980s, and one of the principal founders of the Partido dos Trabalhadores (PT) – Workers’ Party – in 1980. He had come second to Collor de Mello in the presidential election of 1989 and second to Cardoso in the elections of 1994 and 1998.

Brazil as an Export Economy, 1880-1930

Conventionally, the year 1930 is taken as a watershed in Brazilian history. It marked the fall of the political regime of the Old Republic and the transition from an export-led economy to a long period of growth led by import substitution. A closer look at the evidence makes this transition far less clear-cut. Coffee’s contribution to the generation of foreign exchange earnings remained crucial until the 1960s when import substitution had reached maturity. On the other hand, domestic industrial production had already become relevant as a share of domestic supply at the turn of the century. While attention here will be concentrated on the export economy in the 1880–1930 period, the links between the export economy and import substitution should be kept in mind. Table 2.1 shows the gradual replacement of agriculture by industry in GDP. While there is no information for the pre-1910 period, it is known that industrial activity was rather limited before the 1870s, and the first important industrial investment boom was in the early 1890s.

Argentina and Brazil during the 1930's: the impact of British and American international economic policies

The accumulation of recent work on the impact of the 1929–33 Depression on specific Latin American economies provides an adequate basis for serious comparative studies trying to detect cross-country reactions in terms of shifts in economic policy and their results as well as to define homogeneous groups of countries in terms of economic performance.1

Britain as a Debtor: Indian Sterling Balances, 1940–53

The British war effort in the Second World War depended on US Lend‐Lease and the accumulation of sterling balances by other countries, including the Empire. By the end of the war outstanding balances were equivalent to 60 per cent of British net receipts under Lend‐Lease. Of the total sterling balances, about a third was accumulated by India. This article seeks to evaluate the costs incurred by India in the reduction of balances after the war. The accumulation of balances and their use to repatriate Indias sterling debt is described. British efforts to convince India to accept a partial cancellation of the balances are analysed, singling out the crucial role of Keynes. The negotiations after independence are detailed, including releases, transfers to Pakistan, settlement of pensions, purchase of military stores, and gold sales. The possible contribution of British divestment to reduce outstanding balances is assessed. The Indian case is compared with those of other holders, such as Portugal, Brazil, Argentina, and Egypt. The links between the accumulation of sterling balances and inflation are considered. In the end there was a significant reduction in the purchasing power of sterling balances, but not for the reasons anticipated by London.

British business in Brazil: maturity and demise (1850-1950)

Este artigo considera as tendencias de longo prazo das relacoes economicas e financeiras britânicas com o Brasil desde 1850. Abrange investimentos e outas manifestacoes da presenca britânica no Brasil, tais como as relacionadas a comercio e intermediacao financeira. O interesse fundamental e no envolvimento britânico com as atividades do setor privado no Brasil, seja atraves de investimento direto, seja na intermediacao financeira em beneficio de firmas privadas que operavam no Brasil. O artigo tambem menciona o papel de Londres como centro financeiro no qual eram lancados emprestimos publicos brasileiros, a relevância do Reino Unido como mercado para as exportacoes brasileiras e como supridor de importacoes para o Brasil, e a intermediacao britânica no comercio brasileiro com terceiros paises. O artigo e dividido em secoes cronologicas: os anos imperiais (1850-1889); estagnacao e boom (1889-1914); primeiros sinais de declinio (1914-1930); os anos de reducao de investimentos (1930-meados da decada de 1950). A secao final apresenta as conclusoes e menciona as tendencias pos-1950.

The Insurance Industry in Brazil: A Long-Term View

This paper surveys the formation and development of insurance business in Brazil. It describes its origins, from the colonial times and imperial era to recent events. Particular attention is given to regulatory changes, showing how they evolved in response to macroeconomic shocks that affected the Brazilian economy during this period.

Obstacles to Brazilian export growth and the present multilateral negotiations

This chapter is concerned with the evaluation of the impact of non-tariff obstacles faced by Brazilian exports in developed markets. Some of the main issues of recent Brazilian commercial policy are examined as well as the economic rationale for the adoption of a specific agenda by Brazil in the Uruguay Round.The traditional coalitions of Brazilian economic diplomacy and alternative coalition possibilities are critically examined from an economic national interest point of view.

Market access for manufactured exports from developing countries: trends and prospects

This chapter discusses the main trade impediments facing developing countries’ exports of manufactures to developed country markets and the prospects for improved market access. It is divided into two sections: the first describes the chief characteristics of the evolving structure of protection, and in the second the issues relating to market access for developing country exports of manufactures in the ongoing MTNs are analysed. It is argued (i) that no broad coalition with substantial participation of developing countries among its leading actors is likely to emerge, (ii) that the abandonment of S & D rights has very limited appeal to the vast majority of developing exporters of manufactures and, thus, is a very unlikely outcome, and (iii) that the prospects for improved market access through reciprocal bargaining basically depend on structural adjustment in the North Atlantic economies. The fact that the latter requires investment and, therefore growth, emphasizes the crucial importance of the Uruguay Round for leading the OECD economies to a higher growth path than that which can be envisaged under present macroeconomic policies in the North.