Equipped with an enormous potential of human and natural resources, Brazil is by far the most important country in South America, but it is also the one in which South American economic history is most fully expressed with its marked dependencies on both Europe and from the United States and with its periods of rapid enrichment alternating with as many phases of recession due to the changed interests of international capital. Since the beginning of the colonial era, Brazil was in fact marked by a series of economic cycles, which began with the exploitation of precious woods, continued with the long period of sugar cane cultivation, with breeding in the areas of the sertão., with the mining fortunes of Minas Gerais; there was the intense exploitation of rubber from the Amazon jungle and the real epic of coffee, which began in the mid-nineteenth century – and which determined a significant shift towards the south of Brazilian economic interests. Once the era of cycles was finally over, the country strengthened its economy, on the one hand by diversifying and consolidating agricultural production, on the other by starting a powerful process of industrialization (more than half of exports consist of all kinds of products), according to ehistorylib, Brazil continues to present an economic structure fundamentally subordinated to foreign capital; this gives the measure of the fragility of the Brazilian production system, taking into account that, given the narrowness of the internal market, it works essentially for the abroad. Indeed, the powerful push towards industrialization, which began in the second half of the 1960s and which could have allowed the country to acquire authentic autonomy on the world economic scene, was induced by foreign investments (first of all from the United States, therefore from Germany, Canada, Japan, etc.), which here have found, in addition of course to the huge raw materials, abundant and low-cost labor and very broad government support: half of the Brazilian industry belongs to foreign companies and in the most developed sectors, such as automotive, pharmaceuticals, cement, etc., foreign participation is even 80 and 90%. These considerations can account for the marked vulnerability of the Brazilian economy to fluctuations: at one time those of the prices of the raw materials of which it is a producer (as happened with rubber and coffee), those of the conditions of application of international capital, which is difficult to attract and even more difficult to keep. The serious financial crisis that hit Brazil in the first weeks of 1999 (after the country had been seriously affected by the previous Asian and Russian crisis) originated from this type of scenario, according to a speculative model (to which also motivations do not seem extraneous) policies) that is now consolidating and that has seen, year after year, hit Mexico, Thailand, Indonesia and then Brazil, in a continuous process, which is periodically emphasized by local crises. The technical causes of these jolts are very complex, even if it is relatively easy to reduce them to just one: the search for the greatest possible profits by those who control international capital. As for the effects, these are phenomena that develop over a rather long period for which it is not yet possible to outline the picture: it seems obvious that, at least in the short term, these effects will be very serious, especially in a substantially weak economy such as that Brazilian; but, together and even more considerably, it has seen the gap between incomes widen, the amount of population below the poverty line increase, socio-economic differences between regions become radicalized (with the southern coastal states continuing to progress at an ever-increasing rate, while those of the interior and of the Northeast stagnate or regress), concentrate the population more and more in urban areas that are very difficult to manage, improve the inflation rate, stabilize unemployment at the price of a substantial reduction in the purchasing power of wages. All this happens despite the prospects, opened by the entry into operation of MERCOSUR (1991), seemed to guarantee immediate consolidation and expansion of the positive results achieved by the South American economies and by the Brazilian one in particular: results and prospects that the new crisis has jeopardized.

On the other hand, paradoxically, precisely the birth of MERCOSUR (with the progressive elimination of customs protection) and the economic-financial dynamism (with the boom of the stock exchanges in São Paulo and Rio de Janeiro, between 1996 and 1997, and with the increase in foreign capital invested) have put Brazil in a weaker condition than in the past, faced with a financial crisis of external origin, especially since the adoption of the new currency (the real, since 1994) and the need to keep interest rates on government bonds high, to attract capital, together they have increased the pressure on public debt and the dependence on international investor confidence. The numerous and important privatizations, in the industrial and credit sectors, have lightened the situation only for a short time, while the rationalization interventions of the industry, aimed at increasing its competitiveness, in the immediate future, have above all had a negative social effect, expelling hundreds of thousands of workers (industry produces over a third of the national GDP employing about a fifth of the active population). The structural conditions of agriculture (about 8% of GDP, including the agro-industrial sectors, and about a fifth of the employed) do not really show any improvement, and therefore do not allow for a rebalancing or population growth, at least by slowing down urbanization, nor access to adequate means of subsistence: about half of the farms (practically all those directly managed) share 5% of arable land, while not even 1% of farm owners own at least 1000 ha, for a complex equal to just over a third of the arable land. Finally, the tertiary sector, classically divided, on the one hand, into a series of “modern” and typically urban activities, with very high added value, linked to the world economy and, on the other, into tiny intermediation activities, mainly informal, it represents as always a relief valve, especially for the newly established urban population (more than 56% of GDP, occupying more than half of the Work). In 2000, the austerity policy agreed with the IMF and the funds deriving from the huge loan which the country benefited from in 2002, have favored the recovery of the economy, despite the fact that some structural gaps remain to be filled with appropriate reforms at the micro and macro economic level, starting from the completion of the infrastructures to arrive at the stabilization of the currency, the reduction of inflation and the containment of unemployment. In the 2000-2003 period, however, the government managed to recompose some regional synergies, encouraging a growth model that brought together local administrations, private companies and the credit system in an effective cooperative model. The country’s economy experienced remarkable growth rates with a momentary stagnation in the 2008-9 two-year period. After a revival in 2010, the persistence of the world crisis and the reduction in demand caused a new cooling. Since 2013, public debt has been on the rise and has made public spending cuts and austerity measures necessary. In the 2015-16 two-year period, Brazil faced a severe recession due to falling oil prices, low productivity and a lack of investment. In the following two years, economic growth returned to positive, strengthening in 2018-19; unemployment, which almost doubled between 2013 and 2017, has started to decline. In 2018, the GDP of Brazil reached the figure of 1,868,184 mln US $, with a GDP per capita of US $ 8,968. The debt, which stands at approximately US $ 542,980 million (in 2017). The COVID-19 pandemic in 2020 brought the country back into recession. The rise in unemployment has aggravated the already precarious living conditions of large sections of the population.