BIG BUSINESS AND THE

POLITICS ECONOMIC
REFORM IN BRAZIL
Muh. Khalfan Amario Rayhan Mardan (014202000145)
I Made Pinto Arya Bagiada (014202000148)
Rafi Faizan Tanjung (014202000044)
Niken Putri Syahra (017202000047)
Tabitha Vivi Wijayanti (014202000008)
table of content

Introduction
Case Study and Discussion
Pro and Cons
Conclusion
 INTRODUCTION
In the 1990s Brazil launched a comprehensive economic
liberalization program. It lifted its trade barriers, adopted new
market-oriented regulations, opened up its capital market and

abandoned earlier efforts to internalize production and to build

vertically integrated systems across several sectors of the economy.
In spite of the visible gap that separated the top global giants from
the large local enterprises, Brazilian companies seemed to be willing
to join in an economic liberalization process that was bound to
expose them to unprecedented levels of competition, bring about a
high degree of uncertainty and, in many cases, ultimately put their
own businesses at risk.
 Case study
BRAZIL ECONOMY DEVELOPMENT

The performance of the Brazilian economy during the

administration of President Michel Temer can be said to have
succeeded in rising from the economic recession for 2 consecutive
years (2015-2016). Temer's programs to improve the Brazilian
economy such as increasing the state budget to 20 years with
revisions every 10 years (PEC 55/2016), the Employment Law
(Reforma Trabalhista), Taxation Law (Reforma Tributária), Law
System Elections (Reforma Eleitoral), Law on Social Security
(Reforma da Previdncia Social), and Privatization have had a positive
impact on market participants so that the Brazilian economy is
improving step by step.


Brazil's Export - Import Performance in 2017

Brazil's trade balance in 2017 recorded a total value of

US$ 386,488,630,026 with a positive balance of US$
66,989,724,128 consisting of exports of US$
217,739,177,077 and imports of US$ 150,749,452,949.
Surplus of US$ 66,989,724,128 (2017) as mentioned
above, up 40.5% compared to 2016 of US$
47,683,397,949 billion in 2016.
 Case study
Brazilian President Dilma Rousseff, proposed a referendum on political
reforms to garner support for the two-week wave of protests across the
country. Offered an $25 billion for public services and an inadequate mass
transit system. Rousseff's proposal comes after a two-week wave of protests
that has confused her left-leaning government, 1.2 million people took to the
streets with demands for better quality of life.
Rousseff proposed a referendum on a special committee in parliament to
prepare for political reform. "My government is hearing democratic voices on
the streets demanding change". The president has not explained further how
the political reform plan he has.
https://sumbar.antaranews.com/amp/berita/45961/pemimpin-brazil-usulkan-referendum-reformasi-politik
PRO
The 1990s are considered 'the decade of reforms' in Brazil. This decade has been a
turning point in the economic history of the country as the economic reforms
happened. Coming up next are the positive impacts of reforms on some sectors that
surely influence the Brazilian economy as whole :

Trade reform, help to increase the import component of domestic

production, fostered labour productivity, and increased consumer surplus.

Privatization, led to foreign direct investment to surpass portfolio capital

inflows. This massive inflow of foreign capital helped finance most of the
recurrent and increasing account deficit. The favourable new conditions
granted to foreign investors combined with the favourable international
environment led to early expectations of massive participation of
foreigners in the process of privatization of stateowned enterprises.
 Cons
Based on IMF data, the problems that hampered economic recovery
in Brazil created an unhealthy political order if Dilma Rouseff's
system of government was maintained, therefore our group assumes
the recovery that occurred wasn't purely based solely on the

in 1990 but rather the influence
stability of reforms in Brazil
leaders' policies to make it easier for investors to recover capital
markets. Our group's support for President Michel Temer's policy to
restore the current political and economic situation could change
the stagnant view of the 1990 policies or what is commonly called
the decade of reforms' in Brazil.
 Conclusion
Neoclassical political economy was born based on the occurrence of market
failures due to market failures, according to the neoclassical view, the state
has a role to overcome through a process of justice and law because the
state's actions are not just efficiency of the state in the neoclassical view, it will
act to produce goods that cannot be produced easily another way. On the
other hand, the state can act to generate profits for certain groups at the
expense of other groups. In the view of neoclassical economics it is not
completely oriented to the free market as classical economics is without any
government intervention at all. The role of government must remain,
especially when there is a market failure. Because according to this approach,
it is very unlikely if trade runs freely and ignores the role of the government.
Thank You


QUESTION FROM THE OTHER GROUP

1. What is the solution that can solve the protest of the Brazilian?
2. Explain the reason why brazilian want to join the economic
liberalization program that launched by their country even the
program is very harmful for their business?
3. What is the correlation between the theory of neoclassical
political economy and the related case?