For the most current version of this Note, see Background Notes A-Z.

The Brazilian flag is green with a large, yellow diamond in the center bearing a blue celestial globe with a white equatorial band reading Ordem E Progresso, and 27 white, 5-pointed stars.

PROFILE

OFFICIAL NAME:
Federative Republic of Brazil

Geography
Area: 8,511,965 sq. km. (3,290,000 sq. mi.); slightly smaller than the U.S.
Cities: Capital--Brasilia (pop. 2.5 million). Other cities--Sao Paulo (10.9 million), Rio de Janeiro (6.1 million), Belo Horizonte (2.4 million), Salvador (2.9 million), Fortaleza (2.4 million), Recife (1.5 million), Porto Alegre (1.4 million), Curitiba (1.8 million).
Terrain: Dense forests in northern regions including Amazon Basin; semiarid along northeast coast; mountains, hills, and rolling plains in the southwest, including Mato Grosso; midwestern savannahs; the world's largest wetland area; and coastal lowland.
Climate: Mostly tropical or semitropical with temperate zone in the south.

People
Nationality: Brazilian.
Population (2007 est.): 192 million.
Annual growth rate: 1.33%.
Ethnic groups: Portuguese, Italian, German, Spanish, Japanese, Arab, African, and indigenous people.
Religion: Roman Catholic (74%).
Language: Portuguese.
Education: Literacy--86% of adult population.
Health: Infant mortality rate--26.7/1,000. Life expectancy--72.5 yrs.
Work force: 99.5 million.

Government
Type: Federative republic.
Independence: September 7, 1822.
Constitution: Promulgated October 5, 1988.
Branches: Executive--president (chief of state and head of government popularly elected to no more than two 4-year terms). Legislative--Senate (81 members popularly elected to 8-year terms), Chamber of Deputies (513 members popularly elected to 4-year terms). Judicial--Supreme Federal Tribunal (11 lifetime positions appointed by the president).
Political parties: Workers' Party (PT), Brazilian Democratic Movement Party (PMDB), Brazilian Social Democratic Party (PSDB), Democrats (DEM), Democratic Workers Party (PDT), Brazilian Labor Party (PTB), Party of the Republic (PR), Brazilian Socialist Party (PSB), Communist Party of Brazil (PC do B), Progressive Party (PP). Popular Socialist Party (PPS), Green Party (PV), Socialism and Freedom Party (PSOL), the National Mobilization Party (PMN), National Workers Party (PTN), Humanistic Solidarity Party (PHS), the Brazilian Republican Party (PRB), Christian Social Party (PSC), Christian Labor Party (PTC), and the Labor Party of Brazil (PT do B).

Economy (2007)
GDP: $1.269 trillion (official exchange rate).
GDP: $1.838 trillion (purchasing power parity).
Annual real growth: 4.5%.
Per capita GDP: $9,700 (purchasing power parity).
Natural resources: Iron ore, manganese, bauxite, nickel, uranium, gemstones, oil, wood, and aluminum. Brazil has 14% of the world's renewable fresh water.
Agriculture (5.1% of GDP): Products--coffee, soybeans, sugarcane, cocoa, rice, livestock, corn, oranges, cotton, wheat, and tobacco.
Industry (30.8% of GDP): Types--steel, commercial aircraft, chemicals, petrochemicals, footwear, machinery, motors, vehicles, auto parts, consumer durables, cement, and lumber.
Services (64% of GDP): Types--mail, telecommunications, banking, energy, commerce, and computing.
Trade: Trade balance (2007)--$43.6 billion surplus. Exports--$159.2 billion. Major markets--United States 15.8%, Argentina 9.0%, and China 6.7%. Imports--$115.6 billion. Major suppliers-- United States 15.7%, China 10.5%, and Argentina 8.6%.

PEOPLE AND HISTORY
With its estimated 192 million inhabitants, Brazil has the largest population in Latin America and ranks fifth in the world. The majority of people live in the south-central area, which includes the industrial cities of Sao Paulo, Rio de Janeiro, and Belo Horizonte. Urban growth has been rapid; by 2005, 81% of the total population was living in urban areas. This growth has aided economic development but also has created serious social, security, environmental, and political problems for major cities.

Six major groups make up the Brazilian population: the Portuguese, who colonized Brazil in the 16th century; Africans brought to Brazil as slaves; various other European, Middle Eastern, and Asian immigrant groups who have settled in Brazil since the mid-19th century; and indigenous peoples of Tupi and Guarani language stock. Intermarriage between the Portuguese and indigenous people or slaves was common. Although the major European ethnic stock of Brazil was originally Portuguese, subsequent waves of immigration have contributed to a diverse ethnic and cultural heritage.

From 1875 until 1960, about 5 million Europeans immigrated to Brazil, settling mainly in the four southern states of Sao Paulo, Parana, Santa Catarina, and Rio Grande do Sul. Immigrants have come mainly from Italy, Germany, Spain, Japan, Poland, and the Middle East. The largest Japanese community outside Japan is in Sao Paulo. Despite class distinctions, national identity is strong, and racial friction is a relatively new phenomenon. Indigenous full-blooded Indians, located mainly in the northern and western border regions and in the upper Amazon Basin, constitute less than 1% of the population. Their numbers are declining as contact with the outside world and commercial expansion into the interior increase. Brazilian Government programs to establish reservations and to provide other forms of assistance have existed for years but are controversial and often ineffective.

Brazil is the only Portuguese-speaking nation in the Americas. About three-quarters of all Brazilians belong to the Roman Catholic Church; most others are Protestant, members of a growing evangelical movement, or follow practices derived from African religions.

Pedro Alvares Cabral claimed Brazil for Portugal in 1500. The colony was ruled from Lisbon until 1808, when Dom Joao VI and the rest of the Portuguese royal family fled from Napoleon's army, and established its seat of government in Rio de Janeiro. Dom Joao VI returned to Portugal in 1821. His son declared Brazil's independence on September 7, 1822, and became emperor with the title of Dom Pedro I. His son, Dom Pedro II, ruled from 1831 to 1889, when a federal republic was established in a coup led by Deodoro da Fonseca, Marshal of the Army. Slavery had been abolished a year earlier by the Regent Princess Isabel while Dom Pedro II was in Europe.

From 1889 to 1930, the government was a constitutional republic, with the presidency alternating between the dominant states of Sao Paulo and Minas Gerais. This period ended with a military coup that placed Getulio Vargas, a civilian, in the presidency; Vargas remained as dictator until 1945. Between 1945 and 1961, Jose Linhares, Gaspar Dutra, Vargas himself, Caf� Filho, Carlos Luz, Nereu Ramos, Juscelino Kubitschek, and Janio Quadros were elected presidents. When Quadros resigned in 1961, Vice President Joao Goulart succeeded him.

Goulart's years in office were marked by high inflation, economic stagnation, and the increasing influence of radical political elements. The armed forces, alarmed by these developments, staged a coup on March 31, 1964. The coup leaders chose as president Humberto Castello Branco, followed by Arthur da Costa e Silva (1967-69), Emilio Garrastazu Medici (1969-74), and Ernesto Geisel (1974-79), all of whom were senior army officers. Geisel began a democratic opening that was continued by his successor, Gen. Joao Baptista de Oliveira Figueiredo (1979-85). Figueiredo not only permitted the return of politicians exiled or banned from political activity during the 1960s and 1970s, but also allowed them to run for state and federal offices in 1982.

At the same time, an electoral college consisting of all members of congress and six delegates chosen from each state continued to choose the president. In January 1985, the electoral college voted Tancredo Neves from the opposition Brazilian Democratic Movement Party (PMDB) into office as President. However, Neves became ill in March and died a month later. His Vice President, former Senator Jose Sarney, became President upon Neves' death. Brazil completed its transition to a popularly elected government in 1989, when Fernando Collor de Mello won 53% of the vote in the first direct presidential election in 29 years. In 1992, a major corruption scandal led to his impeachment and ultimate resignation. Vice President Itamar Franco took his place and governed for the remainder of Collor's term culminating in the October 3, 1994 presidential elections, when Fernando Henrique Cardoso was elected President with 54% of the vote. Cardoso took office January 1, 1995, and pursued a program of ambitious economic reform. He was re-elected in October 1998 for a second four-year term. Luiz Inacio da Silva, commonly known as Lula, was elected president in 2002, after his fourth campaign for the office. He was re-elected in 2006 for a second four-year term.

President Lula, a former union leader, is Brazil's first working-class president. Since taking office he has taken a prudent fiscal path, warning that social reforms would take years and that Brazil had no alternative but to maintain tight fiscal austerity policies.

GOVERNMENT AND POLITICAL CONDITIONS
Brazil is a federal republic with 26 states and a federal district. The 1988 constitution grants broad powers to the federal government, made up of executive, legislative, and judicial branches. The president holds office for four years, with the right to re-election for an additional four-year term, and appoints his own cabinet. There are 81 senators, three for each state and the Federal District, and 513 deputies. Senate terms are eight years, staggered so that two-thirds of the upper house is up for election at one time and one-third four years later. Chamber terms are four years, with elections based on a complex system of proportional representation by states. Each state is eligible for a minimum of eight seats; the largest state delegation (Sao Paulo's) is capped at 70 seats. This system is weighted in favor of geographically large but sparsely populated states.

Twenty political parties are represented in Congress. Since it is common for politicians to switch parties, the proportion of congressional seats held by particular parties changes regularly. The major political parties are:

  • Workers' Party (PT-center-left)
  • Democrats (DEM-center-right)
  • Brazilian Democratic Movement Party (PMDB-center)
  • Brazilian Social Democratic Party (PSDB-center-left)
  • Progressive Party (PP-right)
  • Brazilian Labor Party (PTB-center-right)
  • Party of the Republic (PR-center-right)
  • Brazilian Socialist Party (PSB-left)
  • Popular Socialist Party (PPS-left)
  • Democratic Labor Party (PDT-left)
  • Communist Party of Brazil (PCdoB-left)

President Lula was re-elected October 29, 2006 in a second round victory with over 60% of the vote, over Geraldo Alckmin of the PSDB. Lula's PT party failed to win a majority in either the lower or upper houses in concurrent legislative elections and was obliged to form a coalition with the centrist PMDB party--which won the most seats in the lower house and ended up with the largest number in the Senate--and a collection of minor parties. However, party loyalty is weak in Brazil, and it is common for politicians to switch parties, changing the balance of power in Congress. The PT won five of twenty-seven governorships, but the opposition PSDB remains in control of the critical states of Sao Paulo and Minas Gerais. The PMDB, as in the legislative elections, won the most governorships of any one party, controlling seven states. Because of the mandatory revenue allocation to states and municipalities provided for in the 1988 constitution, Brazilian governors and mayors have exercised considerable power since 1989.

Lula's electoral victory came despite a series of corruption scandals that resulted in the resignation of senior PT officials and the electoral defeat of several congressmen from parties allied to the PT. A number of congressional investigations are ongoing, though Lula has never been linked personally to any of the scandals.

Chief of State and Cabinet Members
President--Luiz Inacio Lula da Silva
Vice President--Jose Alencar Gomes da Silva
Minister-Chief Casa Civil (Chief of Staff)--Dilma Rousseff
Minister of Defense--Nelson Jobim
Minister of Development, Industry, and Trade--Miguel Jorge Filho
Minister of Finance--Guido Mantega
Minister of Foreign Affairs--Celso Amorim
Minister of the Environment--Carlos Minc
Minister of Agriculture, Livestock and Food Supply--Reinhold Stephanes

Ambassador to the United States--Antonio Patriota
Ambassador to the United Nations--Maria Luiza Viotti
Ambassador to the OAS--Osmar Vladimir Chohfi

Brazil maintains an embassy in the United States at 3006 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-238-2700). Brazil has consulates general in New York, Chicago, and Los Angeles, and consulates in Miami, Houston, Boston, Atlanta, and San Francisco.

ECONOMY
President Lula and his economic team have implemented prudent fiscal and monetary policies and have pursued necessary microeconomic reforms. Brazil's economy, aided by a benign international environment, grew approximately 2.8% in 2006 and 4.5% in 2007. Brazil is now a net creditor nation, and sustained growth, coupled with booming exports, healthy external accounts, moderate inflation, decreasing unemployment, and reductions in the debt-to-GDP ratio led two major rating agencies to give Brazil an investment-grade sovereign debt rating in early 2008.

However, significant vulnerabilities remain. Despite registering year-on-year declines from 2004 to 2007, Brazil's local currency government debt remains high. Total tax burden is high, and income and land distribution remains skewed.

Sustaining high growth rates in the longer term depends on the impact of President Lula's structural reform program and efforts to build a more welcoming climate for investment, both domestic and foreign. In its first year, the Lula administration passed key tax and pension reforms to improve the government fiscal accounts. Judicial reform and an overhaul of the bankruptcy law were passed in late 2004, along with tax measures to create incentives for long-term savings and investments.

Legislation promoting public private partnerships, a key effort to attract private investment to infrastructure, also passed in 2004. Labor reform and proposals to increase autonomy for the Central Bank are pending. Despite this well-considered reform agenda, much remains to be done to improve the regulatory climate for investments, particularly in the energy sector; to simplify tax systems at the state and federal levels; and to further reform the pension system.

Trade Policy
President Lula has made economic growth and poverty alleviation top priorities. Export promotion is a main component in plans to generate growth and reduce what is seen as a vulnerability to international financial market gyrations. To increase exports, the government is seeking access to foreign markets through trade negotiations and increased export promotion as well as government financing for exports.

To increase its international profile (both economically and politically), the Lula administration is seeking expanded trade ties with developing countries, as well as a strengthening of the Mercosul (Mercosur in Spanish) customs union with Uruguay, Paraguay, and Argentina. In 2004, Mercosul concluded free trade agreements with Colombia, Ecuador, Venezuela, and Peru, adding to its existing agreements with Chile and Bolivia to establish a commercial base for the newly-launched South American Community of Nations. Mercosul is pursuing free trade negotiations with Mexico and Canada and has resumed trade negotiations with the EU. The trade bloc also plans to launch trilateral free trade negotiations with India and South Africa, building on partial trade liberalization agreements concluded with these countries in 2004. In July 2006, Venezuela officially joined the Mercosul trade bloc; its full membership is pending. China has increased its importance as an export market for Brazilian soy, iron ore, and steel, becoming Brazil's fourth-largest trading partner and a potential source of investment.

Agriculture
Agriculture is a major sector of the Brazilian economy, and is key for economic growth and foreign exchange. Agriculture accounts for about 5% of GDP (25% when including agribusiness) and 36% of Brazilian exports. Brazil enjoyed a positive agricultural trade balance of $40 billion in 2007. Brazil is the world's largest producer of sugar cane, coffee, tropical fruits, frozen concentrated orange juice (FCOJ), and has the world's largest commercial cattle herd (50% larger than the U.S.) at 170 million head. Brazil is also an important producer of soybeans (second to the United States), corn, cotton, cocoa, tobacco, and forest products. The remainder of agricultural output is in the livestock sector, mainly the production of beef and poultry (second to the United States), pork, milk, and seafood.

Environment
About half of Brazil is covered in forests, and Brazil has the majority of the world's largest rain forest, the Amazon. In the last 30 years, migrations into the Amazon and the conversion of forest land, primarily for agricultural use, has reduced the Brazilian Amazon by almost 20%. In 2006, the government created the Brazilian Forest Service with the aim to manage in a sustainable manner the Amazon forest resources. Due to concerns over possible unauthorized taking and commercialization of genetic resources or traditional knowledge of indigenous communities (often referred to as "biopiracy"), Brazil has imposed substantial restrictions on foreign researchers collecting or studying biological materials.

Other Aspects
Brazil has one of the most advanced industrial sectors in Latin America. Accounting for one-third of GDP, Brazil's diverse industries range from automobiles and parts, other machinery and equipment, steel, textiles, shoes, cement, lumber, iron ore, tin, and petrochemicals, to computers, aircraft, and consumer durables. Most major automobile producers have established production facilities in Brazil.

Brazil has a diverse and sophisticated services industry as well. Mail and telecommunications are the largest, followed by banking, energy, commerce, and computing. During the 1990s, Brazil's financial services industry underwent a major overhaul and is relatively sound. The financial sector provides local firms a wide range of financial products. The largest financial firms are Brazilian (and the two largest banks are government-owned), but U.S. and other foreign firms have an important share of the market.

Privatization triggered a flood of investors after 1996. The yearly investment average in the telecom sector the 4 years prior to the start of privatization was R$5.8 billion, and the annual average for the four years following privatization was R$16.3 billion, nearly tripling. Investment in the electrical power sector increased from R$5.3 billion annually in the pre-privatization era to R$7.2 billion. U.S. companies provided a great deal of this influx of cash. After 2000, many of these investors suffered huge losses in the face of adverse regulatory decisions and especially the sharp depreciation of the real. The energy sector was especially hard hit.

The Government of Brazil has undertaken an ambitious program to reduce dependence on imported oil. In the mid-1980s, imports accounted for more than 70% of Brazil's oil and derivatives needs; the net figure is nearing zero. Brazil announced in early 2008 the discovery of the Tupi and Carioca oil fields off the coast of Rio de Janeiro. The oil reserves in these fields could be upwards of 40 billion barrels. Output from the existing Campos Basin and the discovery of the new fields could make Brazil a significant oil exporter by 2015. Brazil is one of the world's leading producers of hydroelectric power. Of its total installed electricity-generation capacity of 90,000 megawatts, hydropower accounts for 66,000 megawatts (74%).

Proven mineral resources are extensive. Large iron and manganese reserves are important sources of industrial raw materials and export earnings. Deposits of nickel, tin, chromite, bauxite, beryllium, copper, lead, tungsten, zinc, gold, and other minerals are exploited. High-quality, coking-grade coal required in the steel industry is in short supply.

FOREIGN RELATIONS
Brazil has traditionally been a leader in the inter-American community and played an important role in collective security efforts, as well as in economic cooperation in the Western Hemisphere. Brazil supported the Allies in both World Wars. During World War II, its expeditionary force in Italy played a key role in the Allied victory at Monte Castello. It is a member of the Organization of American States (OAS) and a party to the Inter-American Treaty of Reciprocal Assistance (Rio Treaty). Recently, Brazil has given high priority to expanding relations with its South American neighbors and is a founding member of the Latin American Integration Association (ALADI), the Union of South American Nations (UNASUL) created in June 2004, and Mercosul, a customs union between Argentina, Uruguay, Paraguay, and Brazil, with Chile, Bolivia, Peru, Colombia, and Ecuador as associate members; Venezuela's full membership is pending.

Brazil is a charter member of the United Nations and participates in its specialized agencies. It has contributed troops to UN peacekeeping efforts in the Middle East, the former Belgian Congo, Cyprus, Mozambique, Angola, East Timor, and most recently Haiti. Brazil is currently leading the UN peacekeeping force in Haiti. Brazil served as a non-permanent member of the UN Security Council from 2004-2005. Prior to this, it had been a member of the UN Security Council eight times. Brazil is lobbying for a permanent position on the Council.

As Brazil's domestic economy has grown and diversified, the country has become increasingly involved in international economic and trade policy discussions. For example, Brazil has been a leader of the G-20 group of nations in the WTO Doha Round talks. The U.S., Western Europe, and Japan are primary markets for Brazilian exports and sources of foreign lending and investment. China is a growing market for Brazilian exports. Brazil also has bolstered its commitment to nonproliferation through ratification of the nuclear Non-Proliferation Treaty (NPT), signing a full-scale nuclear safeguard agreement with the International Atomic Energy Agency (IAEA), acceding to the Treaty of Tlatelolco, and joining the Missile Technology Control Regime (MTCR) and the Nuclear Suppliers Group.

U.S.-BRAZILIAN RELATIONS
The United States was the first country to recognize Brazil's independence in 1822. The two countries have traditionally enjoyed friendly, active relations encompassing a broad political and economic agenda. Deepening U.S.-Brazil engagement and cooperation are reflected in the continuing high-level contacts between the two governments, including reciprocal visits by Presidents Bush and Lula in March 2007.

Ongoing topics of discussion and cooperation include trade and finance; hemispheric economic integration; biofuels; regional security; nonproliferation and arms control; human rights and trafficking in persons; international crime, including financial support to terrorist groups; counter-narcotics; and environmental issues. Existing bilateral agreements include an Education Partnership Agreement, which enhances and expands cooperative initiatives in such areas as standards-based education reform, use of technology, and professional development of teachers; a Mutual Legal Assistance treaty--ratified in 2001; and agreements on cooperation in energy, the environment, science and technology, and transportation. In March 2007, the United States and Brazil signed three separate memoranda of understanding to increase cooperation on biofuels (MOU text; fact sheet), education (MOU; media note) and legislative capacity building in Guinea-Bissau (media note).

Secretary of State Condoleezza Rice visited Brazil in March 2008 and signed a historic Joint Action Plan for Racial Equality. The plan calls for Brazil and the United States to work jointly in combating racial discrimination and sharing best practices in tackling discrimination in the areas of education, law enforcement, labor, health, and many other areas.

U.S. Embassy and Consulate Functions
The U.S. embassy and consulates in Brazil provide a wide range of services to U.S. citizens and business. Political, economic, and science officers deal directly with the Brazilian Government in advancing U.S. interests but also are available to brief U.S. citizens on general conditions in the country. Attach�s from the U.S. Commercial Service and Foreign Agriculture Service work closely with hundreds of U.S. companies that maintain offices in Brazil. These officers provide information on Brazilian trade and industry regulations and administer several programs to aid U.S. companies starting or maintaining business ventures in Brazil. The number of trade events and U.S. companies traveling to Brazil to participate in U.S. Commercial Service and Foreign Agriculture Service programs has tripled over the last three years.

The consular section of the embassy provides vital services to the estimated 60,000 U.S. citizens residing in Brazil. Among other services, the consular section assists Americans who wish to participate in U.S. elections while abroad and provides U.S. tax information. Besides the U.S. residents living in Brazil, some 150,000 U.S. citizens visit annually. The consular section offers passport and emergency services to U.S. tourists as needed during their stay in Brazil.

Principal U.S. Embassy Officials
Ambassador--Clifford M. Sobel
Deputy Chief of Mission--Philip Chicola
Defense Attach�--Colonel Cris Coello, U.S. Army
Consul General--Simon Henshaw
Economic Counselor--Tara Erath
Agricultural Counselor--Alan Hrapsky
Commercial Officer--Rebecca Armand
Political Counselor--Stephen Liston
Science Counselor--Richard Driscoll
Public Affairs Counselor--Richard Stites
Consul General in Sao Paulo--Thomas J. White
Consul General in Rio de Janeiro--Elizabeth Lee Martinez
Consul in Recife--Diana Page

The U.S. Embassy in Brasilia is located at SES Avenida das Nacoes, quadra 801, lote 3, Brasilia, DF, CEP: 70.403-900 (tel. 55-61-3312-7000), (fax 55-61-3225-9136). Internet: http://brasilia.usembassy.gov/.

U.S. consulates general are in Rio de Janeiro and Sao Paulo, and a consulate is in Recife. Consular agents are located in Manaus, Belem, Salvador, Fortaleza, and Porto Alegre. Branch offices of the U.S. Foreign Commercial Services are located in Brasilia, Sao Paulo, Rio de Janeiro, and Belo Horizonte.

Other Business Contacts
U.S. Department of Commerce
Office of Latin America and the Caribbean
International Trade Administration
14th and Constitution Avenue, NW
Washington, DC 20230
Tel: 202-482-0428
1-800-USA-TRADE
Fax: 202-482-4157
Automated fax service for trade-related info: 202-482-4464

American Chamber of Commerce of Sao Paulo
Rua da Paz, No. 1431
04713-001 - Chacara Santo Antonio
Sao Paulo - SP, Brazil
Tel: 55-11-51-803-804
Fax: 55-11-51-803-777
E-mail: amhost@amcham.com.br

American Chamber of Commerce of Rio de Janeiro
Praca Pio X-15, 5th Floor
Caixa Postal 916
20040 Rio de Janeiro--RJ-Brazil
Tel: 55-21-2203-2477
Fax: 55-21-2263-4477
E-mail: amchambr@unisys.com.br

[This is a mobile copy of Brazil (06/08)]