GLOBALIZATION
Impact of the Economic Crisis 2008 on Brazil and Kerala and a Sustainable Solution for it
Introduction “Worst Crisis Since '30s, With No End Yet in Sight” (Jon Hilsenrath, 2008). 2008 was a year which collapsed many of the world’s greatest economy. It was the year where not only a region, a country a continent but the entire globe was in the same boat, and that was The Economic Crisis. The Economic Crisis not only led to recession, but also led to a highly increased unemployment rate around the world. The financial crisis was referred to being, ‘The crisis of wealth destruction’. By March 2009, US $34.4 trillion of global wealth had been destroyed. Some countries stood strong during this crisis, but some had to go through
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Kerala (A state in Southern India) and Brazil are two good examples of this. These both state/country faced the crisis in their own ways, where Kerala developed the concept of Micro-Financing Banks alongside promoted Women Empowerment, Brazil’s Economy had started to demolish in 2009. But the question here is, what both the places did differently that can be further on used in the future, to prevent another financial crisis. What measures did Brazil take in terms of their banking to survive this global crisis? Is there a sustainable solution to this problem, if yes what? Before going into detail about these questions it is important to know what the Economic Crisis is and why it happened.
The Economic Crisis- The Bigger Picture The Economic Crisis is considered to be the worst crisis in history after the Great Depression (1930). The Financial Crisis resulted in the bailout of
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It is hosting the FIFA World Cup this year (20140 as well as the Summer Olympics in 2016. This requires massive investments in urban and social development sectors as well as development in the transport infrastructure. Though the Brazilian Economy has slowed down since 2011 due to domestic and external factors, the financial and banking system have remained strong and resilience during this slowdown. Government has been active in the past few years, introducing number of initiatives to reduce energy costs, restructure oil royalty payments, strengthen investment in infrastructure through foreign participation etc. Poverty has also decreased from 21% in 2003 to 11% in 2009. A significant decrease in income inequality has also been observed. Environment is one sector, where some great concern has been shown by the Brazilian Government. There has been phenomenal progress in decreasing deforestation in Brazil, but a sustainable solution is still required to ensure environmental protection. (Worldbank.org- Brazil
Brazil is the largest country in South America and in Latin America, fifth largest in the world. It is one of the more diverse countries in the world, with different cultures and ethnicities. Brazil’s type of government is a Federal Republic. Brazil is on its way to growing out of its emerging market status and becoming one of the richest and most developed countries on earth. Brazil’s human, mineral, and agricultural resources are on par with those of the United States and Canada, and it has a few great opportunities to take advantage of in order to continue the growth it’s been experiencing over the past 20 years. Brazil, known for its natural resources, find in energy one of the country’s main ways of resources, being either oil and natural gas or biofuels and solar/wind power.
The financial crisis of 2007–2008 is considered by many economists the worst financial crisis since the Great Depression of the 1930s. This crisis resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. The crisis led to a series of events including: the 2008–2012 global recessions and the European sovereign-debt crisis. The reasons of this financial crisis are argued by economists. The performance of the Federal Reserve becomes a focal point in this argument.
Every few years, countries experience an economic decline which is commonly referred to as a recession. In recent years the U.S. has been faced with overcoming the most devastating global economic hardships since the Great Depression. This period “a period of declining GDP, accompanied by lower real income and higher unemployment” has been referred to as the Great Recession (McConnell, 2012 p.G-30). This paper will cover the issues which led to the recession, discuss the strategies taken by the Government and Federal Reserve to alleviate the crisis, and look at the future outlook of the U.S. economy. By examining the nation’s economic struggles during this time period (2007-2009), it will conclude that the current macroeconomic situation deals with unemployment, which is a direct result of the recession.
Between January 2008 and February 2010, employment fell by 8.8 million, the largest decline in American history. The 2008 Recession, which officially lasted from December 2007 to June 2009, began with the bursting of an 8 trillion dollar housing bubble. Job losses during the recession meant that family incomes dropped, poverty rose, and people all over the country were suffering. Things like this don’t just happen. Policy changes incorporated with the economy are often a major factor. In this case, all roads lead to one major problem: Deregulation. Deregulation originating from the Carter and Regan Administrations, combined with a decrease in consumer spending, and the subprime mortgage bubble all led up to the major recession of 2008.
Due to its high population rate (large labour pool), its vast natural resources and its geographical position in the centre of South America, it bears enormous growth potential in the near future. Aligned with increasing currency stability, international companies have heavily invested in Brazil over the past decade. According to CIA World Factbook, Brazil had the 11th largest PPP in 2004 worldwide and today has a well established middle income economy with wide variations in levels of development. Thus, today Brazil is South America's leading economic power and a regional leader. 2.
Brazil is a vast country in South America that has experienced extreme wealth and income disparities since its independence in 1822. The uneven income distribution, combined with several other factors, is what accounts for millions of civilians living in impoverished conditions. The Northeast is the country’s most afflicted region, with an estimated 58% of the population living in poverty and earing less than $2 a day. The systemic inequality as well as lack of development and modernization has generated chronic poverty that has had detrimental effects on society in northeast and ultimately weakens Brazil.
Cabral, R. (2013). A perspective on the symptoms and causes of the financial crisis. Journal of Banking & Finance, 37, 103-117
In 1822, Brazil became a nation independent from Portugal. By far the largest and most populous country in South America, Brazil has overcome more than half a century of military government to pursue industrial and agricultural growth and development. With an abundance of natural resources and a large labor pool, Brazil became Latin America's leading economic power by the 1970’s.
The financial crisis occurred in 2008, where the world economy experienced the most dangerous crisis ever since the Great Depression of the 1930s. It started in 2007 when the home prices in the U.S. Dropped significantly, spreading very quickly, initially to the financial sector of the U.S. and subsequently to the financial markets in other countries.
In the current economic times the development and growth of any economy has come to a near stop or at least to a drastic slow down. The face of the global economic environment has changed and many new countries are starting to change the way their country and the rest of the world does business. One such nation is Brazil, who has turned around their own economic troubles and is becoming one of the fastest growing economies in the world (World Factbook). Brazil has started developing its economy and using the opportunity to achieve a level of respect in the world.
The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.
... laws, eradicate corruption and try to strictly secure whole Amazon with strict punishments for criminals. To be capable to do this, there must be vast advertisement program, which may interest a lot of people. There are limitations in research such as real condition and a number of indigenous people, because it is estimated that about 50 indigenous tribes are totally isolated from civilization and there are limitations in research in real condition of food and raw materials in supply chain of large companies. This is because any shoe, portion of beef or timber materials that we purchase every day can be illegally exported from Brazil and there must be strict control of global organizations. In addition, there are recommendations of subsequent surveys in improving agriculture and finding more sustainable nutrients which would allow using lands for longer period.
This paper provides an overview of the crisis, outlines the major causes of the crisis, examine alternative solutions to the problem
...n poverty and inequality in Brazil. These programs have also helped reduce child labour and child mal nutrition. As a result, Brazil has overcome extreme poverty and it has helped achieve the first target of the Milenium Development Goals ten years before.
Warwick J. McKibbin, and Andrew Stoeckel. “The Global Financial Crisis: Causes and Consequences.” Lowy Institute for International Policy 2.09 (2009): 1. PDF file.