Back in Brazil
David Thomas is back in Brazil and looking at how the country’s growing economy could be helpful to Australia’s exporters.
It’s great to be back in Rio de Janeiro, despite some unwelcome rain, to witness the continuing transformation of Brazil: now the sixth largest economy in the world. This move from seventh place occurred as recently as March this year when they overtook my original home country, the United Kingdom. Brazil’s economy grew by 2.7 percent last year compared to the UK’s 0.8 percent growth, taking it to a total of US$2.51 trillion, compared to the UK, which now stands at US$2.48 tr.
But hang on, how can this be possible? I so vividly recall the Mexico World Cup in 1970 when the two captains, Bobby Moore and Pele, embraced at the end of England’s defeat by 0-1 to Brazil in the qualifying rounds when Brazil was regarded as a very poor country indeed compared to the UK which, while in decline from its peak in 1929, was still one of the world’s super-powers in political, economic and fiscal terms.
In 1970, the UK’s GDP was $1.24 trillion and the fifth largest economy in the world (after US, West Germany, Japan and France) a fall from second place only 10 years earlier (behind the US). Brazil’s GDP was $0.42 trillion and the tenth largest in the world (after the top five above, plus Italy, China, Canada and India).
Can it really be true that in only 40 years, not even one lifetime, Brazil could have come from being only one-third of the size of Britain to actually overtaking them?!
It makes me wonder how much more can change in just the next 10 years? Brazil is poised to overtake France ($2.8 tr) in the next few years, with only Germany ($3.6 tr) and Japan ($5.8 tr) between them and the top two economies in the world (currently USA and China). India (now in eleventh place at $1.67 tr) will almost certainly outflank them (despite their growth slowing to 7.5 percent this year) and Russia (now in ninth place at $1.85 tr) will also climb into the top league.
Can you find a way to ride this wave, before others do?