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Emerging Market

Essay by   •  July 28, 2016  •  Research Paper  •  1,538 Words (7 Pages)  •  584 Views

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Introduction

In the world, emerging market is growing and huge what refer to a country that has more potential characteristics of a developed market and the national income per capita is relatively lower than developed markets. Brazil, Russia, India, China(BRIC) are the largest emerging market countries and the other emerging countries are including South Korea, Turkey, Chile, Thailand, Poland, etc. These emerging market countries are generally numerous population and they have a large domestic market that means the demand for goods and services are very big.

Emerging markets has a free market system which is democratic system and the features is they open the door to welcome more foreign investment as well as the good promotion to improve the trade relationship between countries. Also, emerging markets drive growth in the global economy so they are very important.

Although emerging market accounted for a certain size and influence in the global economy, emerging market still have challenges and risks. In this assignment, I selected Brazil to discuss the characteristics, challenges, the environment of economy and the impact of market factors.

Global overview

Brazil is the most influential country in South America which is rising economic power and it is one of the world’s biggest democracies. Brazil has natural resources especially iron ore that is highly prized by major manufacturing nations such as China.

Brazil is the largest country in both South America and Latin America which is the fifth largest country in the world. For the geography, Brazil has a variety of ecological system and extensive natural resources in the large tropical forest, Amazon River basin. This unique natural resources make Brazil become the one of 17 megadiverse counties.

For economy, Brazil is the ninth largest by nominal GDP and seventh largest by GDP (PPP) in the world as 2015. Also, the major economies are growing so fast until 2010 and the economic reforms bring out the new international influence in the world. According to International Monetary Fund(IMF) data, Brazil is active in agricultural, mining and manufacturing which has a labor force of over 107 million but the unemployment is 11.2% in 2016. Moreover, Brazil ranks 23nd worldwide in value of exports such as car, coffee, iron ore, steel and electrical equipment, etc.

[pic 1]

For culture, Brazil has multi-cultural and it had many different nations which are Europe, Asia, Africa, etc. in terms of music and dance, they have good performance, for example samba that is a music and dance fashion from private sector, it is very popular. People will dance and show through their personal performance in the carnival.

As we know that football is very popular in Brazil. Brazil national football team is the only one team which has never missed a session from 1930 to 2014 World Cup and it is the only one team won five times in the World Cup. In 2016, Brazil elected the host city for 2016 Summer Olympics in the Rio de Janeiro.

For diplomacy, USA is the second largest trading partner and largest source of investment with Brazil. In 2014, Brazil’s total trade $62.44 billion US dollars with USA that is nearly one0seventh of Brazil’s total foreign trade. In 2011, the USA President Obama visit to Brazil and announced the “global partnership” with Brazil.

Characteristics

Demographic characteristics

Based on the latest United Nations estimates, the current population of Brazil is around 209,500,000 in July 2016. Brazil population is equivalent around to 2.83% of the total world population. In the age structure of Brazil, as of the estimates on internet Brazil had the following population age distribution:

[pic 2]

Besides that, life expectancy is the important demographic indictor to show the number of birth and death rates. The total life expectancy is 72.6 years who birth for Brazil that is above the average life expectancy. (the global population is about 71 years)

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Society & Culture characteristics

Brazil had rich diversity which is a mixture of races. There have many original Portuguese settlers married native women who make the new race. This new race are descendants of the Portuguese and African slaves. Brazilian family is the foundation of the social structure and it tend to be large. The class ideas are different in Brazil such as wage differentials. Brazil’s women make up around 40% of the workforce but they are work in lower paid jobs like teaching.

Business Etiquette & Protocol characteristics

Brazilians like face to face meetings and it allows them to know how to do better with their business partners. Also, they prefer drawing up detailed legal contracts in the business agreements. They think that business appointments are required and the best time to make them is 2 to 3 weeks in advance.

Challenges

Recession in the country

Brazil doesn’t have the central bank and it is not enough even the International Monetary Fund(IMF). Besides that, China’s demand for commodities such as iron ore and crude oil that is very important for Brazil which is an engine of growth in the country. But this demand became weak in 2009. It made the tax revenues and sales are falling. Also, the budget deficit is exceeding 9% of GDP, Brazil is in recession. Brazil’s GDP contracted by 4.5% in the third quarter of 2015 which is compared to 2014, that is depends on China’s demand.

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