Brazil

F

Energy

Most of Brazil’s energy comes from renewable sources, particularly hydroelectricity, which generated 84 percent of the country’s energy in 2003. Oil and natural gas are the main nonrenewable sources, followed by coal. Renewable resources are domestically produced, but Brazil also imports about 10 percent of its total energy needs, principally oil and coal.

Almost half of the hydroelectric capacity is located on major rivers in the Southeast, close to the highest concentrations of population and industry. Improved transmission technology and the construction of industries, such as metal smelting, that use large amounts of electricity have begun to tap into the considerable hydroelectric resources of the Amazon region. The biggest hydroelectric station is Itaipú, in Paraná, which Brazil shares with Paraguay. Other large stations are Tucuruí in the Amazon region, Paulo Afonso in Bahia, Itumbiara in Minas Gerais, and Ilha Solteira in São Paulo. In the South, burning coal supplies thermal power, and there are oil-fired power stations elsewhere. Brazil has taken some tentative steps in the production of nuclear power; in 2003 nuclear power provided 4 percent of Brazil’s energy.

Wood and charcoal are still widely used in rural areas for cooking. They are also important commercial sources of energy, particularly in iron smelting and lime making. Sugarcane is also significant, both as a source of commercially distilled fuel known as ethanol for motor vehicles and as bagasse, the remains of crushed sugarcane stalks, which is used as fuel in sugar mills. From 2003 to 2006, more than 77 percent of the automobiles sold in Brazil, about 2 million vehicles, were flex-fuel cars, which operate on either ethanol or gasoline.

G

Foreign Trade

Before 1980 there were persistent deficits in Brazil’s balance of trade, with imports costing more than exports. In the 1980s this moved into a surplus as a result of a policy of export promotion, increased self-sufficiency in manufactured goods, and a reduced need for petroleum imports. Trade deficits returned in the 1990s partly due to a global economic stagnation. By the beginning of the 21st century, Brazil had reestablished a trade surplus. Although Brazil traditionally has been an exporter of primary agricultural and mineral products, manufactured goods made up 53 percent of Brazil’s exports in 2004.

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Brazil is a member of the International Monetary Fund (IMF), an international body that seeks to coordinate monetary funds in order to expand trade, and the Inter-American Development Bank, an organization headquartered in Washington, D.C., that promotes economic development in Latin American nations. It was a pioneer in the International Coffee Agreement of 1957, seeking to protect its interests in one of its major export crops. By establishing export quotas, the agreement between coffee-producing and coffee-consuming countries tried to stabilize prices and overcome the problems caused by fluctuations in supply and demand. In 1960 Brazil joined the Latin American Free Trade Area (which became the Latin American Integration Association in 1980), to foster trade within the continent, and since 1995 has been a member of Mercosur, a customs union with Argentina, Paraguay, and Uruguay.

H

Currency and Banking

The country’s economic difficulties in the early 1990s resulted in frequent devaluations of the currency along with frequent name changes to the unit of currency, including cruzeiro, cruzeiro novo, and cruzado. The present currency is the real, which replaced the cruzeiro real in 1994, and has approximate parity with the U.S. dollar (2.40 real equal U.S.$1; 2005 average).

The Banco de Brazil is the largest commercial bank, established in 1808. In 1965 the Central Bank of Brazil became responsible for the supply of currency and the control of circulation. In addition to the federal bank and private banks, there are a number of state banks.

The largest stock exchange is that of São Paulo, followed by the exchange in Rio de Janeiro. There are a number of smaller exchanges.

I

Transportation

Sheer size, mountains, and river rapids have all been obstacles to transportation in Brazil, but the country has an expanding transport network. Roads are a key element, encouraged in the late 1950s by the implementation of a national highway plan and the creation of an automobile industry. A national highway system with Brasília at the center links all the state capitals. There are other major interurban and interregional highways, including the Trans-Amazon Highway, an east-west artery linking isolated regions of Brazil and Peru. Dependence on motor vehicles has created serious traffic congestion in some of the major cities, especially those on sites with limited geographic access, such as Rio de Janeiro. It has also resulted in increased air pollution.

Two-thirds of the tracks on Brazil’s railway system are located in the Southeast and South. Railways have suffered because of their high costs compared to the highways and because they were built as separate lines, rather than as an integrated system. Many of these systems have variations in track gauges (the distance between the two sides of the track); this makes it impossible to run trains designed for one system on the tracks of a system built for a different gauge. In 1962 a federal agency was created to oversee the state-controlled railways. These and the railways of São Paulo are the largest systems. The remaining rail operations are suburban commuter systems connecting in the major cities or specialized railways carrying minerals, timber, or tourists.

Coastal shipping has also declined in the face of highway competition, but there was some modernization in shipping and ports in the late 1970s through the creation of export corridors to the ports of Rio Grande, Paranaguá, and Santos, and through the construction of specialized oil and ore ports. Major ports include Santos, Rio de Janeiro, and Angra dos Reis; the specialized ports of Tubarão, Sepitiba, and São Sebastião in the Southeast; Paranaguá and Rio Grande in the South; and Aratu and São Luis in the Northeast.

Brazil’s large size makes air transport important. Sixty-seven airports, controlled by the state company Infraero, handle most of the air traffic. There are also many small airstrips that serve remote areas in the Amazon region. The airports of São Paulo and Rio de Janeiro are the two largest in South America in terms of traffic handled. Varig is the principal international and domestic airline, with Vasp and Transbrasil as the leading domestic carriers. Several sectors of the transport system—including railways, metro systems, highways, ports, and airports—were opened to private investment in the 1990s as part of the government’s privatization program.

J

Communications

Major newspapers are based in Rio de Janeiro and São Paulo. There are six major television networks, with Globo Organisations, one of the biggest media organizations in Latin America, controlling a major television, radio, publishing, and newspaper business. Brazilian telenovelas (soap operas) have become an important export to other South American countries and to Europe. Telecommunications is a growing sector, with rapid expansion of cellular phones and cable subscriptions.

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